AA Ireland recently surveyed over 200 businesses across the nation to gain some insight into the major challenges and trends currently facing Irish small and medium sized businesses in the current economic climate.
Businesses up and down the country face major challenges as the price of premiums is adding to the problems of a difficult trading environment. Unsurprisingly the economic downturn was given as the greatest challenge of 2010. Half of the businesses surveyed would consider reducing their insurance cover to save on cost. The cost of business the most important issue, according to 73% of respondents.
On a more positive note, 53% were optimistic for their business in 2010, this figure rose to 66% for 2011 and a healthy 75% for the long term future.
“Talking to the AA and taking advice will help businesses to make informed decisions about transferring risk and cutting back on cover. Reducing costs is on every current management meeting agenda, however pay for what you need without putting the future of the business at risk” says Michael O’Reilly, AA business Insurance. Of course it will always be good advice to make sure that you are adequately insured, but a key point is only to pay for what your business actually needs. An insurance policy can be tailored around what the business actually needs, so instead of ‘one size fits all’ you can get the cover that fits best.
Claims
There is currently an increase in claims frequency. It is an unfortunate pattern that you often see when there is a recession or when economic times get tighter. 34% of businesses surveyed have made an insurance claim on their business. 11% of claims were made within the last year alone. You can protect your business against these claims by taking steps to reduce risk. The largest risk that a business faces is from liability to others, and the potential costs and damages a company could face if a claim was made against it. Business Insurance will not only be able to assess the complete range of risks that your business is exposed to, and provide the correct levels of cover, they will more often than not have a unique local knowledge of the risks involved and will be able to negotiate premiums that reflect the nature of the risks. AA business insurance handles all the settlement negotiations with the insuring company and allow you to continue what you do best – running your business
While almost all companies were aware of the legal requirements of a Health and Safety statement (95%), only 75% had one in place with only 57% of business updating this annually. Michael O Reilly, Manager of AA Business Insurance reinstates the importance of an up to date health and safety statement. ‘The mistake is to believe that these things happen in highly unusual or exceptional circumstances that never occur in your workplace. This is not the case. Implementing health and safety measures doesn’t have to be expensive, time consuming or complicated. In fact, safer and more efficient working practices can often save money but, more importantly, they can help to save lives’.
Consumer Profiles
Business were questioned on their preferences in purchasing business insurance. 63% preferred to conduct business through a broker, while 33% preferred to deal direct with an insurer. Overall the preferred method was via phone (39%) closely followed by email (37%) and only 11% prefer through post. 12% prefer a visit from their broker/ insurer. It appears business clients like to remain loyal to their insurers with 57% with their current insurance broker for over 5 years. Price was the key determinant in switching insurers at 62%. Other factors included better cover, problems with a previous claim and financial stability.
60% of businesses signified the importance of being able to pay by direct debit over a period.
AA business Insurance recognizes this importance and arranges payment by installment, a flexible feature that can often suit anyone with a seasonal or variable income. Your policy is also arranged on a statement of fact basis so there is no need for time consuming proposal forms.