Small businesses were more likely than large ones to experience revenue drops in the past year, while about 60% have also reported premium increases, according to Vero’s annual SME Insurance Index.

“We are seeing the emergence of a two-speed economy,” the report says. “A substantial proportion of smaller SMEs remain in survival mode, grappling with rising costs and limited resources, while larger businesses are reporting more stability and taking a proactive approach to risk management.”

Rising premiums caused 13% of respondents to reduce investment in risk management measures, while 11% avoided increasing sums insured; 8% reduced overall coverage or didn’t renew one or more policies, and 7% shifted some covers to the direct market.

When premiums fall, 39% invest in risk reduction measures such as upgrading equipment, cybersecurity and staff training.

Other findings include that three-quarters of small businesses have never completed a risk analysis, and many are overlooking business continuity planning.

Vero head of distribution Anthony Pagano says businesses need stronger risk management frameworks and operating plans for events such as cyber incidents, natural disasters and supply chain disruptions.

“SMEs are navigating a landscape shaped not only by economic uncertainty, but an expanding range of risks, with over half of our survey respondents concerned with human factors like mental health and staff retention,” he said. “To guide them through uncertain times, we found over half of businesses received risk advice from their insurance broker, with the majority of businesses actioning this advice.”

The report shows rates of broker use remain similar to last year, and satisfaction levels are stable at 69% – well below the record high of 87% in 2024. 

About 80% of respondents use a broker for at least some of their insurance, with 11% heavy users, 24% moderate and 45% light users. One in five do not use a broker.

The Vero SME Index, now in its 15th year, surveys more than 1500 companies including micro, small, medium, large and very large businesses.