More New Zealand businesses are identifying price as the most important concern when it comes to making insurance decisions as the economic downturn affects trading conditions, potentially leading to changes that may increase their risk exposure, a Vero survey says. 

“Given the prevalent concerns surrounding the economy, it is unsurprising that more SMEs are prioritising price as the most important consideration when making insurance decisions,” the latest Vero New Zealand SME Insurance Index shows. 

“This trend holds true across broker clients, direct buyers, and businesses of varying sizes.” 

Some 55% of SMEs viewed price as the was most important factor concern when making insurance decisions, up from 46% last year. 

Vero says price sensitive buyers have a higher tendency to make insurance changes that potentially increase their risk and are more likely to reduce the amount of cover, or number of things covered, change insurer or increase the excess. 

“Even if SMEs need to make reductions to their insurance coverage, brokers should help clients ensure that these decisions are well-informed and conscious, taking into account the potential impact on their risk exposure,” the report says. 

“By providing comprehensive information and guidance, brokers can help clients make informed choices that strike a balance between cost considerations and prudent risk management.”  

Economic downturn was nominated by 38% of SMEs as their top concern, with the survey also identifying pressures from rising costs. 

This year, 64% of SMEs says they face moderate to major impacts from inflation, 57% are affected by increasing premiums and 55% are impacted by rising supply costs. 

The survey finds that SMEs whose broker was involved in their last renewal are more likely to report higher satisfaction levels. Additionally, 86% of respondents would like their brokers to stay updated on changes within their business that could affect their insurance. 

“In these uncertain times, the value of and importance of broker advice to SME customers has never been higher,” Vero New Zealand Acting Chief Customer Officer Paul Gallop said. 

The level of concern in New Zealand regarding natural disasters is also on the rise, with one in five businesses expressing increased apprehension compared to two years ago, and a third of businesses perceive themselves to be at moderate to high risk of being affected by natural disasters.   

The SME Index report is based on research involving 765 business owners and decision makers, with the survey conducted during April and May this year.