PB Week: Small businesses face the crunch

A survey carried out by Continental on behalf of RSA today highlighted the problems faced by small businesses in the current economic environment reflecting the concerns raised by many PB readers in our recent sentiment survey.

According to the RSA report 11% of small businesses can no longer afford to operate due to the credit crunch and the global financial upheaval and a worrying 7% of SME employers would risk reducing insurance cover to save money. The worst hit businesses were in the north where 16% of those surveyed saying they can no longer afford to operate compared to only 1% in the south-west.

Mark Skinner, small business director at RSA, outlined the problem: “Increasing costs, a decline in consumer confidence and a lack of credit all add to the difficulties SMEs are facing. It is only natural they should look to reduce costs where possible. But they should not cut corners by doing without insurance. It is at times like these that businesses are most at risk though, with increased instances of recessionary related events such as theft and criminal damage.”

Skinner believes that brokers can help their customers to survive the current economic upheaval: “Small Business owners can talk to their insurance brokers for advice on cover options and risk improvements that can help save them money. They can also look at monthly premium payment options to help spread the cost of insurance.”

However, do not despair as there is hope. Interest rates and expected to drop dramatically in the next few months which should aid the situation significantly.

Brussels

On Friday PB attended an annual meeting of the Worldwide Broker Network and hosted a roundtable, sponsored by ACE, with some of its most prominent members.

David Hokason, president and CEO of the Worldwide Broker Network highlighted the opportunities global economic problems offer the network and where networks have the advantage over consolidators when dealing with international clients: “Global recession is encouraging clients to make cost savings by implementing global insurance programmes. In our network teams are complementing each other by working together rather than in competition with each other.”

Patrick Drinan, national distribution development director from Ace, agreed that competition between profit centres has become a problem for some larger international brokers: “We see a lot of competition between internal profit centres, infighting can be a real stumbling block.”

Read the full round-table discussion in the December issue of PB

Digital edition

PB is now available as a digital edition. To receive the latest copy of PB in the form of a pdf document for free please register your details at www.professionalbroking.co.uk/digitaledition

Comment

If you would like to comment on this blog, please post your comment below or alternatively e-mail pbeditorial@incisivemedia.com