Most SME owners and managers have not changed or cancelled their business insurance to cut expenses, even though their revenues have taken a hit from the virus-induced economic slump.

A new Vero survey released today says about two-thirds of the 500 businesses polled in the 2020 SME Insurance Index Pulse Check say their revenues have declined, some by more than 50%.

But 85% have kept the cover they had before the economy began to stall in March.

Just 15% say they have been forced to make changes to their insurance arrangements because of the pandemic. Switching to a new insurer is the most popular option, with 6% saying they have moved.

Cancelling some insurance or pushing for a better deal are equal second on 5% each.

About 4% have moved to direct insurance, with the same proportion revealing they have cut the sums insured or turnover in their insurance programs. Only 2% of SMEs have resorted to cancelling their insurance.

The survey was conducted through an online questionnaire between April 30 and May 5, more than a month after tough lockdown measures were introduced in March, grinding the economy to a virtual halt.

While nearly half of the SME owners and managers interviewed say they have little confidence that the economy will turn around soon, about 77% say they have no plans to change their insurance programs or brokers.

Only 7% say they may cancel their insurance in the near future, 5% have not ruled out a change in insurer and 5% say they will consider a new broker and/or insurer.

Asked if they have contacted their brokers for advice, 68% say they made the first move to do and 32% said their brokers took the initiative to reach out.

About 84% of the SMEs whose brokers were proactive say they were satisfied with the service, compared with just 58% who had to make contact first.

Vero EGM Intermediaries Andrew Mair says the survey findings illustrate the crucial role brokers play during times of economic distress.

“Many SMEs are facing challenging times and understand that reducing insurance cover can be a big risk,” he told insuranceNEWS.com.au today. “Brokers should work closely with their clients to understand their individual situation and support them through the next stages.

“Staying in regular contact with clients will help brokers understand the immediate and long-term changes occurring to their client’s businesses, the impact on their insurance program, and any updates required on their risk and exposure factors.”