Legal & General’s new State of the Nation report uncovers the risks faced by small and medium-sized businesses and the role of financial advisers in protecting the nation's SMEs.
Our latest ‘State of the Nation’ report offers an informative and practical guide to all things Business Protection. Since 2009, we’ve been gathering insights from small and medium-size businesses about the potential risks they face, their awareness of these risks, and how they could mitigate them.
The report also highlights the opportunities for advisers in this market and gives them a practical way to have a discussion with their business clients about risk.
The road to recovery
Businesses have survived the pandemic and come out the other side with an eye on the future.
We look at the unprecedented events of the Covid-19 pandemic and the impact it has had on many businesses. Unsurprisingly, recovering from the pandemic is the biggest concern for 1 in 5 businesses, with slightly fewer being concerned with simply staying in business.
But not all businesses are treading water. The report highlights that there is greater optimism among UK SMEs than you may expect. It’s encouraging to see that 57% of businesses say they’re feeling positive about their future. And even more encouraging is a third are now looking at how they can expand their business within the next 2 to 3 years.
Exploring business' vulnerabilities
However, as 96% of the 6 million businesses in the UK have less than 10 employees, it’s clear they are vulnerable to the loss of a key person. With over half regarding it as the biggest scenario for serious impacts on their business, and 6 in 10 (59%) would cease trading within 12 months.
They are also vulnerable when considering the levels of debt and the personal security they have given in relation to loans. Is it in their best interests to risk their personal wealth or their house as security or would it be a better solution to use insurance cover?
Protecting the nation's SMEs
Our report has shown there are still many businesses that are exposed to risks which they could mitigate with Business Protection. Financial advisers play an important role in prompting businesses to consider the benefits of Business Protection and to highlight the risks of not having cover. Overall, 97% of businesses would look to professionals for advice, while 20% would prefer to learn from their own research.
Advisers are ideally placed to help businesses understand the uncertainty of risks, and to make the right decisions in protecting themselves against certain unexpected and in many cases unforeseen events. The report helps advisers protect the nation's SME's, build long-term relationships, and ensure they are protected for their futures.
