Engineering news
Brexit is not perceived as a risk by 74% of businesses in the manufacturing sector, according to a new report.
Multinational insurance company RSA’s report, Future Impacts, assesses the effects of economic events such as Brexit on business growth, as well as the other risks that businesses face and how they are managing them.
The report found that 29% of manufacturers believe that leaving the EU will have no impact at all on their business, and 45% said it will have a positive impact on their business.
The research found that an average of 70% amongst SMEs across the UK did not perceive any risk from Brexit. However, SMEs did identify a range of more significant threats which many companies are not sufficiently protected against.
For example, 20% of SMEs in the manufacturing sector said they would go out of business if faced with an unexpected bill of £50,000, compared to a national average of 28%. Yet 59% of SMEs in the manufacturing sector are not insured against any of their top three risks, which is slightly higher than the national average of 58%.
The top three risks UK SMEs identified were economic uncertainty (35%), increasing market competition (35%) and cash flow (31%).
Additionally, almost nine in 10 (88%) insurance brokers see underinsurance as a problem for their SME clients.
RSA’s Future Impacts report also investigates the emerging risks for UK businesses, with 73% of SMEs stating that new risks have emerged since they first started their company. However, little is being done; for example, 82% have not altered or increased their insurance coverage as a result of technological change.
The threat of cyber-attacks, for example, is one of the most prominent emerging risks for businesses. However, while government figures show that two-thirds of large businesses and three-quarters of SMEs had experienced some form of cyber-attack, RSA’s research shows that only 9% of businesses have cyber cover in place, and only 26% said that they are concerned about the threat posed by a cyber-attack.
Businesses’ lack of protection against cyber threats is echoed by government data, which found that approximately one third of firms had formal written cyber security policies and only 10% had an incident management plan in place.
Russell White, schemes and deals director at RSA, said: “Our research shows that SMEs in the manufacturing sector are behind the national average when it comes to insuring against their top three risks. Though, positively, it is this sector which has the biggest plans to increase their insurance cover over the next 12 months, with nearly a fifth (19%) saying that this is the case.”
White added: “The onus is not only on SMEs themselves to better manage their risks, but also on brokers and insurance providers to proactively raise awareness of the protection gap and help SMEs to better understand the risks they face, and what they can do to protect themselves against them.”