Home / Daily / ‘Falling fast’: virus hits SME insurance demand
26 March 2020
SME insurance specialist BizCover has released statistics to show the dramatic impact the COVID-19 outbreak and associated containment measures have already had on demand for small business insurance.
BizCover, which is partly owned by AUB Group following an acquisition announced last month, says SME activity levels are falling and many businesses are being forced to close.
It reports an overall decline in insurance enquiries and “significant uptick” in policy cancellations.
CEO Michael Gottlieb says the trends began in the first week of March, with a 32% decline in the company’s Enquiries Index since then.
“Fewer businesses have been seeking insurance since the shift in March, with enquiries for occupations such as hairdressers, massage therapists and clothing retailers down between 34% and 46% over the past two weeks alone,” he said today.
“By March 24, policy cancellations by SME operators dramatically increased by 51% above the average cancellation levels seen in February. This is a level we have not witnessed in our business before.
“Downturn on renewals has been much slower with only a 9% decline in the renewal rate since mid-March.”
BizCover’s data shows business closure and COVID-19 issues as the most frequently cited reasons for cover cancellation.
Mr Gottlieb says the firm has explored a range of options with insurers to help customers maintain cover, including extended payment periods and deferred payment options.
He says most insurance carriers have given “good support”.
“Unfortunately, a large number of businesses simply can’t afford insurance due to the loss of cashflow, and we expect this trend to spike in the short term while the nation goes into lockdown,” he said.
However, BizCover also reports escalating activity from some work classifications, with plumbers and personal fitness trainers increasing the number of enquiries from 14% to 16% over the past two weeks.
“Many businesses are still trying to adapt to the current work from home trend,” Mr Gottlieb said.
“Operators who were already running their businesses from home prior to COVID-19 would have had a distinct advantage in operating efficiently in this new environment.”