Non-Insurance in the Small to Medium Sized Enterprise Sector

17 December 2008

Research commissioned by the Insurance Council of Australia has revealed that 26% of Australian small to medium sized enterprises (SMEs) do not have any form of general insurance.

“Sole traders were shown to have the highest rate of non-insurance, with 40% of those sampled indicating they had no general insurance,” said Ms Kerrie Kelly, CEO of the Insurance Council of Australia.

“This research confirms the previous Insurance Council report highlighting the connection between high levels of tax on general insurance products and the levels of non-insurance. Both reports indicate that tax reform on general insurance products will lead to a decrease in the level of non-insurance,” said Ms Kelly.

South Australia was shown to have the highest incidence of SME non-insurance with a rate of 31%, while Western Australia was shown to have a rate of 23%.

The industries of Health & Community Services (14%) and the Transport Sector (16%) were the only industry sectors shown to have significantly different rates to the national average.

“For the majority of small businesses, their profit expectations do not appear to impact on planned insurance coverage, at least in the short term. At least 50% of respondents indicated they would leave their insurance coverage unchanged despite any expected change in their profits over the coming year,” said Ms Kelly.

The SME non-insurance research follows the Insurance Council’s report in May 2007 concerning rates of non-insurance within the Australian community, The Non-Insured: Who, Why and Trends.

The full Non-Insurance in the Small to Medium Sized Enterprise Sector report can be found by clicking here.

Click here for a PDF copy of this media release.

Media enquiries: Sean Sampson 02 9253 5161 0421 482 884