Acceptance is the initial step, they say… so in the case of risks, a firm – regardless of size – can never begin to prepare itself if it doesn’t first acknowledge the threat.
Based on responses from 500 business leaders representing small- and medium-sized enterprises (SMEs), Allianz Insurance has discovered the biggest perils and challenges confronting these organisations. Independent research commissioned by the insurer points to data loss/misuse/theft as the top risk, while challenges are headlined by recruitment woes.
“Most SMEs are exposed to some level of data risk, so it is encouraging to see this is recognised as the number one threat so that mitigation steps can be taken,” read the Supporting SMEs to Prosper report. “For many SMEs, especially those without a dedicated IT function, complying with legislation can seem impossible.
“Take the new General Data Protection Regulation (GDPR) as an example. When asked earlier in 2018 before the new regulations came into force, 49% of SMEs said they were not fully aware of the implications of GDPR.”
Allianz Insurance said that while regulations, as well as the prospect of being slapped with heavy fines, can seem particularly daunting, there are simple steps aimed at data protection. “One of the most important ways an insurer or broker can help is the provision of expert risk advice,” noted the report.
The good news is, half of the polled decision makers are open to the idea of being brought up to speed by experts.
“SMEs clearly recognise the significant threat data and security breaches pose to their businesses, as well as more traditional risks such as theft or business interruption,” commented David Martin (pictured), director of SME and corporate partnerships at Allianz Insurance. “The findings demonstrate that many small business leaders would welcome further information on how their business may be affected by these risks.
“Brokers and insurers can add further value to the relationship with their customers by raising these issues and providing advice on how to mitigate against them.ʺ
The other top threats, next to data, are the impact of Brexit; theft or malicious damage to business equipment or property; more advanced technology adopted by their competitors; and a significant interruption to their business. As for the challenges, recruiting the right calibre of people is followed by competition from other providers; innovation; time management; and IT capability.
“SMEs are currently operating in a very uncertain environment,” said Martin. “As an industry, we hold a huge amount of expertise, not only on risk management but also on wider business issues. Our research demonstrates that there is a real opportunity to provide SME customers with expert guidance on issues such as recruitment, marketing, and innovation.”
Source: Insurance Business