Singapore SMEs Face Growing Risks, Remain Underinsured
Singapore – A recent survey of Singaporean SMEs indicates a significant disconnect: while business leaders express growing concerns about a range of risks, a substantial number lack adequate insurance coverage to mitigate potential financial losses. The survey, conducted by QBE Singapore between December 2024 and January 2025, gathered insights from 600 decision-makers, examining their perspectives on workplace safety, talent retention, and insurance-related issues.
According to the survey’s findings, a notable 74% of SME leaders expressed high or moderate levels of concern regarding loss of income resulting from business interruption. However, only 23% of these businesses had an insurance policy in place to address this specific risk. The data reveals a similar trend across other key areas. For instance, 72% of respondents voiced concern about damage to or loss of inventory, yet only 29% were covered by relevant insurance. Furthermore, 72% expressed worries about fraud and fraudulent payments, while a mere 17% held associated insurance policies.
QBE Singapore’s Head of Underwriting, Retail, and SME, Shun Quan Goh, commented on the findings. “Singapore’s SME leaders are understandably concerned about a wide range of risks, yet the proportion of businesses that hold an insurance policy to meet these is low and somewhat surprising — especially given the financial consequences should these risks materialise.”
The survey highlighted that price remains the primary factor influencing insurance purchasing decisions for SMEs, with almost three-quarters (70%) citing it as the main consideration. The second most important factor, at 68%, was the ability of the insurance to help the business operate and serve customers more effectively. This price-sensitive approach aligns with a more cautious business outlook among respondents compared to the previous year.
Mr. Goh added, “Given today’s uncertain economic conditions, it is no surprise that price is now the top concern of policyholders. This underscores the caution many SMEs have when it comes to expenditure and managing their company finances, even at the risk of being underinsured.”
Beyond financial considerations, the survey identified a growing emphasis on mental health within Singaporean SMEs. A substantial 93% of respondents deemed mental health as either very or somewhat important, marking an increase from 89% the previous year. Moreover, SMEs are increasingly implementing measures to enhance both mental and physical well-being, with 59% offering flexible working hours to improve work-life balance, up from 44% in 2024. Additionally, 45% now provide work-from-home arrangements, a rise from 35% in the previous year.
Addressing talent and manpower challenges, almost half (49%) of the respondents viewed them as significant business hurdles, up from 37% in 2024. As a result, many SMEs are exploring new strategies to attract and retain employees. Flexible working emerged as the leading strategy for attracting and keeping the best staff, with 51% of respondents citing it as their top method, compared to 32% the previous year. For the initial time, this year’s study analyzed the attitudes and approaches of older workforces.
In Singapore, the employment rate for workers aged 65 and older has continually increased over the past decade and is anticipated to continue rising. Government data indicated that 9.2% of Singaporean workers belonged to this age group in 2023, and projections suggest it could reach 10.6% by 2030. According to the survey, Singaporean SMEs are noteworthy employers of this demographic, with 41% reporting that 10% or more of their workforce comprises this age group. A significant 44% of respondents view this age bracket as experienced and skilled, with 39% considering them more loyal and 31% describing them as stable.
QBE Singapore CEO and CEO of Wholesale Markets Asia, Ronak Shah, emphasized the importance of this demographic. “With over 70% of this age group in employment in Singapore, workers aged 65 or over are an increasingly important part of Singapore’s labour force. With so many companies focused on hiring the best staff, whatever their age group, this is highly encouraging.”
