The Underinsurance Dilemma: A Wake-Up Call for SMEs in Singapore and Hong Kong
March 19, 2025, 5:36 pm
In the bustling business landscapes of Singapore and Hong Kong, small and medium-sized enterprises (SMEs) are the lifeblood of the economy. They employ millions, drive innovation, and contribute significantly to GDP. Yet, a recent survey by QBE Insurance reveals a troubling trend: many SMEs are underinsured, despite their growing concerns about various business risks. This disconnect could spell disaster for businesses already navigating turbulent waters.
The survey, conducted between late 2024 and early 2025, gathered insights from 600 decision-makers in both regions. The findings are stark. In Singapore, 74% of SME leaders expressed concern about income loss due to business interruptions. However, only 23% have insurance policies to cover this risk. Similarly, 72% worry about inventory loss, yet only 29% are insured against it. In Hong Kong, the situation mirrors this alarming trend. While 65% of businesses are anxious about income loss from interruptions, just 24% have protective measures in place.
This gap between concern and action is a ticking time bomb. Business interruptions can arise from various sources: natural disasters, cyberattacks, or even unexpected economic downturns. Without adequate insurance, SMEs risk losing everything. The financial fallout from a single incident can be catastrophic, yet many business owners remain hesitant to invest in comprehensive coverage.
Price sensitivity is a significant factor. In both regions, cost is the primary concern when purchasing insurance. In Singapore, 70% of respondents prioritize price, while in Hong Kong, 67% echo this sentiment. This focus on cost over coverage can lead to a false sense of security. Business owners may think they are saving money, but in reality, they are setting themselves up for potential failure.
The survey also highlights a concerning trend in workplace safety and health (WSH) practices. While attention to WSH remains high, there has been a slight decline in the number of SMEs communicating coverage and benefits to employees. In Singapore, 81% of businesses reported communicating these details in 2024, but this dropped to 78% in 2025. In Hong Kong, awareness of employee compensation insurance has improved, yet the number of businesses with return-to-work policies has decreased.
Mental health is gaining traction as a priority. In Singapore, 93% of respondents consider mental health important, up from 89% the previous year. This shift reflects a growing recognition of the need for a supportive work environment. SMEs are increasingly offering flexible working hours and remote work options to enhance employee well-being. In Hong Kong, 95% of respondents share this sentiment, with many implementing measures to improve mental and physical health.
Talent retention is another pressing issue. Nearly half of Singaporean SMEs view talent acquisition and retention as a key challenge, a significant increase from previous years. Flexible working arrangements have emerged as a top strategy for retaining skilled employees. In Singapore, 51% of SMEs now prioritize flexible work schedules, compared to just 32% last year. In Hong Kong, 43% of SMEs are increasing pay and bonuses to attract talent, up from 29% in 2024.
Interestingly, both regions are seeing a rise in the employment of older workers. In Singapore, 41% of SMEs employ workers aged 65 or older, while in Hong Kong, this figure stands at 49%. This demographic is often viewed as experienced and loyal, yet they may require additional support from employers. As the workforce ages, businesses must adapt their policies to accommodate the unique needs of older employees.
The survey's findings serve as a wake-up call for SMEs in both Singapore and Hong Kong. The underinsurance dilemma is not just a financial oversight; it is a strategic misstep. Business owners must recognize that investing in comprehensive insurance is not merely an expense but a crucial safeguard against unforeseen risks.
The cost of inaction can far outweigh the initial investment in coverage. As the business landscape continues to evolve, SMEs must prioritize risk management and protection. Insurers like QBE can play a vital role in guiding businesses through these challenges, offering tailored solutions that address specific needs.
In conclusion, the QBE survey paints a clear picture: SMEs in Singapore and Hong Kong are at a crossroads. They face numerous risks but are ill-prepared to handle them. The time for action is now. Business owners must rise to the occasion, embracing the importance of insurance and workplace safety. Only then can they navigate the stormy seas of uncertainty and secure a brighter future for their enterprises. The stakes are high, and the choice is clear: invest in protection or risk it all.
The survey, conducted between late 2024 and early 2025, gathered insights from 600 decision-makers in both regions. The findings are stark. In Singapore, 74% of SME leaders expressed concern about income loss due to business interruptions. However, only 23% have insurance policies to cover this risk. Similarly, 72% worry about inventory loss, yet only 29% are insured against it. In Hong Kong, the situation mirrors this alarming trend. While 65% of businesses are anxious about income loss from interruptions, just 24% have protective measures in place.
This gap between concern and action is a ticking time bomb. Business interruptions can arise from various sources: natural disasters, cyberattacks, or even unexpected economic downturns. Without adequate insurance, SMEs risk losing everything. The financial fallout from a single incident can be catastrophic, yet many business owners remain hesitant to invest in comprehensive coverage.
Price sensitivity is a significant factor. In both regions, cost is the primary concern when purchasing insurance. In Singapore, 70% of respondents prioritize price, while in Hong Kong, 67% echo this sentiment. This focus on cost over coverage can lead to a false sense of security. Business owners may think they are saving money, but in reality, they are setting themselves up for potential failure.
The survey also highlights a concerning trend in workplace safety and health (WSH) practices. While attention to WSH remains high, there has been a slight decline in the number of SMEs communicating coverage and benefits to employees. In Singapore, 81% of businesses reported communicating these details in 2024, but this dropped to 78% in 2025. In Hong Kong, awareness of employee compensation insurance has improved, yet the number of businesses with return-to-work policies has decreased.
Mental health is gaining traction as a priority. In Singapore, 93% of respondents consider mental health important, up from 89% the previous year. This shift reflects a growing recognition of the need for a supportive work environment. SMEs are increasingly offering flexible working hours and remote work options to enhance employee well-being. In Hong Kong, 95% of respondents share this sentiment, with many implementing measures to improve mental and physical health.
Talent retention is another pressing issue. Nearly half of Singaporean SMEs view talent acquisition and retention as a key challenge, a significant increase from previous years. Flexible working arrangements have emerged as a top strategy for retaining skilled employees. In Singapore, 51% of SMEs now prioritize flexible work schedules, compared to just 32% last year. In Hong Kong, 43% of SMEs are increasing pay and bonuses to attract talent, up from 29% in 2024.
Interestingly, both regions are seeing a rise in the employment of older workers. In Singapore, 41% of SMEs employ workers aged 65 or older, while in Hong Kong, this figure stands at 49%. This demographic is often viewed as experienced and loyal, yet they may require additional support from employers. As the workforce ages, businesses must adapt their policies to accommodate the unique needs of older employees.
The survey's findings serve as a wake-up call for SMEs in both Singapore and Hong Kong. The underinsurance dilemma is not just a financial oversight; it is a strategic misstep. Business owners must recognize that investing in comprehensive insurance is not merely an expense but a crucial safeguard against unforeseen risks.
The cost of inaction can far outweigh the initial investment in coverage. As the business landscape continues to evolve, SMEs must prioritize risk management and protection. Insurers like QBE can play a vital role in guiding businesses through these challenges, offering tailored solutions that address specific needs.
In conclusion, the QBE survey paints a clear picture: SMEs in Singapore and Hong Kong are at a crossroads. They face numerous risks but are ill-prepared to handle them. The time for action is now. Business owners must rise to the occasion, embracing the importance of insurance and workplace safety. Only then can they navigate the stormy seas of uncertainty and secure a brighter future for their enterprises. The stakes are high, and the choice is clear: invest in protection or risk it all.