With government encouraging UK businesses to look to Asian export markets, how can brokers help SMEs prepare for the risks inherent in such expansion?
Now more than ever risk management is vital to business, as directors look to new markets and introduce new strategies to drum up growth.
Only this week UK chancellor George Osborne encouraged business to look to Asian export markets. UK exports to Brazil, Russia, India and China rose by 2.3% between Q2 and Q3 2011, while exports to Europe fell by 2.3%.
But for small or medium-sized businesses, such a move can be a huge gamble if the level of risk involved is unknown to them.
Chief executive of Airmic, the association of insurance and risk managers, John Hurrell says: “SMEs have only their own experience to inform them, so how do they tap into wider knowledge of the global supply chain or cloud computing, for example? Some risks are in their core competence to manage but, if it’s peripheral, how do they get more comfortable?”
Biba technical services manager Steve Foulsham agrees that small business directors need lots of guidance, including when new legislation comes in. “We provide information for our members so that they can have the conversation with their clients,” he says.
Business continuity planning is also an opportunity for brokers to add value, especially if it results in a lower premium for clients.
Foulsham says: “The big issue is business resilience: can they survive catastrophes and disasters? The Buncefield explosion affected lots of businesses that couldn’t get to their premises. A business continuity plan might provide for key staff to work from home. It’s the same with London bombings, winter floods, fire, terrorist attacks.”
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