Only a fifth of Hong Kong’s SMEs are insured against income loss

Almost eight of 10 SMEs prefer tailored insurance packages which cover various business risks.

The majority of Hong Kong’s small and medium enterprises (SME) are underinsured with 79% of them encountering business issues in the past year.

Major problems include cyberattacks being the most prevalent. Despite concerns, only a fraction (22%) of respondents had insurance policies addressing loss of income due to business interruption.

Key findings indicate that whilst SMEs are generally positive, they remain aware of the challenges ahead. Top concerns for 2024 include increased costs and reduced profitability (40% of respondents), staff acquisition and retention (39%), cash flow and access to financing (34%), shortage of orders (33%), and customer acquisition and retention (32%).

Regarding customer preferences, 76% of respondents favour tailored insurance packages covering various business risks. They also seek an omnichannel sales experience, combining online convenience with expert advice from intermediaries.

Despite ongoing risks, optimism regarding the Hong Kong economy and company sales has increased significantly. 

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Seventy percent of respondents believe the next 12 months will bring better economic conditions, up from 47% in the previous survey. Similarly, 70% anticipate increased sales, compared to 47% in the prior year.

“Hong Kong-based SMEs are concerned about today’s operating environment, especially with regard to managing rising costs and falling profitability. The recently announced Hong Kong Budget 2024-25 echoes these findings with the announcement of measures that will help SMEs tackle their capital-flow problems, tap into new markets, and accelerate upgrading and transformation,” Lei Yu, QBE CEO for North Asia, said in a press release.

“This year’s surge in optimism among Hong Kong SMEs bodes well for the Hong Kong economy and QBE is poised to help our SME customers navigate the risk landscape with bespoke solutions that can best address their concerns across business interruptions, supply chain management, employee talent retention, and liabilities.” Yu said

QBE Insurance's annual survey of Hong Kong small and medium-sized enterprises (SMEs) reflects optimism for the upcoming year despite looming business risks. The survey was conducted between December 2023 and January 2024 and gathered insights from 616 SME decision-makers.