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SME insurance firms low on confidence amid virus fallout fears

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More than half of insurance and financial firms polled in a national SME outlook survey say the coronavirus outbreak has affected their businesses, and 42% are worried about the next 12 months.

About 66.7% have seen a reduction in sales, according to data provided to insuranceNEWS.com.au by marketing services company Sensis.

“The insurance industry is probably more concerned than a lot of other industries,” Sensis Head of Corporate Communications Will Clarke told insuranceNEWS.com.au.

“If you compare it with retail or cafes and hospitality, you would expect them to be less impacted. But it’s not. They have been impacted just as badly. They could be finding it harder to sell insurance now to their clients.

“What we have found is many small businesses have just stopped spending. They are trying to cut costs as much as possible. They are stopping advertising or trying to downgrade their insurance.”

Sensis polled 1015 SMEs in March from a range of sectors including 71 insurance brokers and financial firms for the quarterly Sensis Business Index. Manufacturing, retail, construction, transport and wholesale were some of the other industries that made up the survey responses.

The index revealed that overall confidence has collapsed at its fastest pace since the survey started 25 years ago, dropping from a positive 40 at the start of March 10 to negative 13 two weeks later.

“Australia’s small businesses were feeling the squeeze before the impact of the coronavirus hit,” Sensis CEO John Allan. “The extraordinary speed of the change in confidence is not something we’ve ever witnessed before.

“It was as if a high-speed train had hit the majority of SME businesses in Australia, with 47% surveyed now worried about the future.”