Leading insurance company Vero says there is more hardship to come for New Zealand's small-to-medium enterprises – but they have further measures in place to help.
Mark Wilkshire, Executive General Manager, Customer, Brand and Distribution, for parent company Suncorp says Vero Insurance boosted its hardship fund up to $10m even before the latest unemployment figures (showing a drop in the June quarter to 4 per cent from 4.2 per cent) were announced recently.
"That drop went against economic predictions," he says, "but the unemployment rate masks the reality going on underneath, shown by a related figure, hours worked, which fell by over 10 per cent – a record.
"Our SME customers are saying they have suffered and continue to suffer loss of income - but that often takes time to be seen, just as the true impact of Covid-19 on the unemployment situation does. There is still a lot of water to go under this bridge so we have increased the support available through our hardship fund to up to $10m so we can continue to meet future need as it arises."
The fund is available to help SME and consumer customers impacted by pandemic related reduced income to keep their general insurance protections in place.
Wilkshire says support has so far mostly been through waiving premiums for consumers (between 3-6 months) and premium assistance at annual renewal time for SME customers. For a typical SME, that could amount to $3000 and around $350 for consumers.
"The uncertainty here and across the rest of the globe because of the pandemic tends to have a significant impact on businesses and we are looking ahead to see the best ways we can help our customers.
"We just want them to know there is support available to keep their insurance in place and that we have planned measures to give them that vital bit of breathing space.
"I encourage our customers in financial hardship due to loss of income from Covid-19 to get in touch directly or through their broker."
![Mark Wilkshire. Photo / Supplied.](https://www.nzherald.co.nz/resizer/v2/TOABOAPDXEYTLHQ4FZAKQKDMYY.jpg?auth=ccf928947a60fd95e404fb3a82fd9b1b8386ef53ad5a722f5ce8a969fb15ff76&width=16&height=8&quality=70&smart=true)
New Zealand's 480,000 SMEs provide employment for roughly a third of all Kiwis and represent about 29 per cent of our GDP; 97 per cent of all New Zealand businesses have 20 employees or fewer.
After the lockdown and jolts to businesses across the country, Vero's annual SME Index – which monitors the wants and needs of SMEs – showed that when the country moved to alert level 1, 77 per cent of SME businesses continued to experience declines revenue following Covid-19, with 40 per cent reporting revenue was lower by half or more.
While Vero had seen few examples of businesses cancelling policies, the research showed that more than 20 per cent of SMEs were making longer term changes to their business because of the effects of the virus, with nearly 29 per cent thinking about changing their insurance.
Most SMEs wanted advice on how their policy might respond at times like this – and on what other types of insurance would benefit their business, plus how to defer or adjust insurance premium payments.
Wilkshire also strongly advised SMEs to contact their brokers: "Changes like temporarily closing your premises, remote work and adjusting staff levels all have an impact on the risk profile of a business. Brokers see large numbers of people and businesses in various situations – and they often have the answer to some of the issues that will be impacting SMEs now and in the near future.
"They can help a lot with important issues like risk analysis and insurance decision-making and they may have ideas and solutions gained from others they deal with which can help SMEs now – they can re-structure things in ways customers might not have thought of."
Vero customers are already benefitting from training around vulnerability that the company undertook before Covid-19 broke out.
Wilkshire says, "We had put significant effort in to support our people on how to support vulnerable customers before Covid-19 struck. There was already a significant investment in training, tools and guides so our people across the business could identify and support customers experiencing vulnerability, including establishing external specialist referral services that can provide customers with expert support and guidance.
"As we all know, it is often part of the human condition not to ask for help even when it is needed, and sometimes people don't recognise that they may need some additional support – so this training helps our people to recognise when help is needed, even though it may not be requested. This is a tough time for everyone but we are continuing to build on our training and capability within the business, so we can continue to support our customers, no matter what they're going through."