May 23, 2014 - Rachel Miller
The Zurich SME Risk Index has risen for the first time in 12 months, indicating that businesses are seeing more risk than at any time since the first quarter of 2013.
The index measures the perceived level of business risk faced by British SMEs. Zurich Insurance found that the level has risen from 41.68 in the fourth quarter of 2013 to 43.19 in Q1 2014.
Increasing concerns about cyber threats are a major factor, according to Zurich. 45% of SME decision-makers are concerned about technological vulnerabilities in their business, a 12% increase since January 2013. More than one in three (37%) SME respondents now cites the threat of cyber-attack as one of the three biggest technology risks to their business, the highest level of concern shown for this threat since the Risk Index was created.
The survey also reveals that data loss and privacy breaches are the number one technology concern facing SMEs, with 36% of respondents naming this as their biggest worry.
Workplace regulation and workforce challenges are also a key concern. The survey has found that 50% of SMEs are worried about business regulation and compliance, and 44% of SMEs are concerned about the availability of expertise and workforce capacity – compared to 33% over a year ago. Key person dependency remains the biggest workforce risk, as identified by 40% of SMEs, a 13% increase on last quarter.
However, new innovations are increasingly seen as an opportunity. 24% of SMEs view ecommerce and online marketing as one of the three biggest opportunities for their business at present.
Richard Coleman, director of SME at Zurich Insurance, said: "In the wake of a number of high profile security threats, worries about tech vulnerabilities are increasingly an issue for business owners. Ultimately this increase in risk is being driven by positive developments in the UK economy, with growth delivering greater demand for workforce talent and the chance to take advantage of tech developments. This is a great example of an area where business owners should be making sure their risk management follows these exciting new innovation possibilities, to ensure they reap the full potential of the opportunities."