British businesses are experiencing the lowest level of recorded risk in 18 months, new figures reveal.
On the back of 41 per cent of SMEs experiencing growth during the last quarter of 2014, the Zurich SME Risk Index has noted growing confidence.
Quarter-on-quarter reductions over 2014, from 44.55 points in the first three months of the year to 41.68 points in the last three, indicates the lowest recorded in a year and a half.
The Zurich index is calculated by creating a mean score against nine different parameters, which indicate how concerned management are about each. With a score of ‘1’ indicating no concern, and ‘100’ showing very concerned, the study questioned 586 senior decision makers and SMEs.
However, despite the continued fall in score, Zurich says that factors such as weather, technological vulnerabilities and workforce challenges are affecting SMEs.
Richard Coleman, director of SME at Zurich Insurance, comments, ‘As we saw in Q3’s Risk Index survey, growth presents new, exciting opportunities for small businesses, particularly in areas like recruitment and web trading.
‘While it’s important for business owners to avail of these opportunities, it’s also important that they plan sufficiently ahead for the long-term risks on the horizon, such as the significant changes underway in technology and workforce structure.’
More on business confidence:
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- Investment intentions reach highest level for 19 years
- Fear of risk turning of European entrepreneurs
Findings from the survey shows that 27 per cent believe that online marketing and web trading provide one of the best three opportunities for business, while 39 per cent have concerns about the challenges associated with technology.
A failure of a local network system is revealed to be one of the three biggest technological risks by 36 per cent.
Workforce challenges, namely the prevalence of expertise and talent, is a concern for 36 per cent alongside worries of an ageing workforce.
‘Traditional risks like severe weather should also not be overlooked,’ Coleman adds.
‘Only 3 per cent of SMEs report that flood prevention measures are one of their three most serious operational risks. With flooding in recent months causing disruption to many businesses, it’s likely that many SME owners need to consider moving major incident risk management closer to the top of their priority list.’