Small business insurance fuels confidence and growth for Aussie micro-SMEs

A new report released today from QBE reveals that micro-SMEs in Australia have varied attitudes toward business insurance, shaped by their motivations, time in operation, and industry. For those with coverage, the benefits are clear—79% report peace of mind, 81% feel protected, and 53% are more confident in taking financial risks, enabling innovation and growth without fear of setbacks.

The report details 83% of micro-SMEs (those with less than 10 employees) - the equivalent of up to 2 million Australian businesses - feel confident in their current level of insurance protection, underscoring its critical role in fostering stability and enabling growth.

Micro-SMEs, the backbone of Australia’s economy, continue to demonstrate resilience despite challenges such as rising operational costs, supply chain disruptions, and shifting consumer demands. Impressively, 42% reported revenue growth over the past three years. Yet, financial vulnerabilities remain a concern, with 29% unable to manage a financial setback exceeding $10,000 and 23% unable to withstand any financial disruption if they didn’t have insurance.

QBE, Managing Director, Consumer, Julie Starley said, “We know based on our claims data that the average payout for a micro-SME for unforeseen damages including to their property and subsequent interruption to their business is well over $10,000, a cost that more than half Australian micro-SMEs (52%) would not be able to afford.”

“Business insurance empowers business owners to navigate challenges, and seize opportunities. Our research highlights the importance of aligning coverage with business growth to ensure resilience and long-term success.”

The report highlights how micro-SMEs are actively managing risks through strategies like streamlining expenses (40%), building financial reserves (38%), and diversifying their offerings (25%). Their top aspirations reflect a focus on growth and stability, with 50% aiming to increase profitability, 43% seeking to expand their client base, and 42% prioritising cash flow stability.

The report categorises micro-SME owners into four distinct personas:

• Lifestyle Seekers – Baby Boomers who have been running their business for less than 10 years and are focused on flexibility and work-life balance
• Aspirational Entrepreneurs – Ambitious and growth-driven Millennials who are just at the start of their business journey
• Safety-Net Seekers – Cautious Gen Xers who are driven by the need to build cash reserves, maintain savings, and minimise exposure to uncertainty
• Passion-Driven Creators – Millennials motivated by personal values and creativity.

While each persona demonstrates unique motivations and approaches to risk management, all benefit significantly from insurance coverage to support their goals and help to safeguard their operations.

Despite their resilience, 59% of micro-SMEs have not updated their insurance since their business inception, leaving them exposed to risks as they scale, hire staff, or acquire new assets.

“Businesses grow, and so do their risks. Regular policy reviews ensure that coverage is not only up to date but also suitable to the challenges and opportunities faced by micro-SMEs. This allows them to focus on innovation and growth with confidence,” said Ms Starley.

The report offers practical potential solutions for micro-SMEs to optimise their insurance strategies, such as aligning policies with growth and choosing flexible coverage options. With up to 2 million micro-SMEs playing a vital role in Australia’s economy, robust and adaptive insurance solutions are essential to their resilience and success.

QBE's Small Business Insurance allows micro-SMEs to purchase insurance directly from QBE, offering coverage through a simple and convenient online platform.

To download the report, please visit the QBE website.

For more information:

Alyssia El Gawly
External Communications Specialist
+61 481 234 346
Email: [email protected]