First Nations small business owners face bigger insurance challenges than the rest of the country, according to new research commissioned by Allianz.
Just 21% of Indigenous SME owners have general property insurance, compared with 42% for the broader SME sector and while 95% agreed insurance is a “must have” for their business, about half say there were probably things that they needed insurance for, but they were not aware of these requirements.
In other key findings released today, 16% of First Nations SME owners say they do not have any insurance cover with the no-insurance take up rate even higher in less established businesses and the ones with smaller turnover, at 23% and 19% respectively.
Allianz says the research, conducted by First Nations engagement consultancy Winangali, holds important findings for the insurance industry.
“First Nations businesses provide important social and economic benefits to First Nations communities through employment, empowerment and self-determination,” GM Conduct and Customer Advocacy Sema Musson said.
“We know that business insurance is a key aspect of building successful and resilient businesses, and by working with First Nations consultancies such as Winangali, we are seeking to better understand the role insurers can play to support this growing sector.”
The research also found only 8% of business owners agree that insurance companies understand First Nations businesses and just 25% agree the industry understands the particular needs of their business.
Almost 70% of business owners surveyed said that having an insurance company that understands First Nations businesses is extremely important in their decision-making about insurance purchases.
About 63% purchased their insurance through a broker, with 75% citing convenience is a key reason and about 50% reported they turn to a broker because they need insurance cover that’s more tailored to their businesses.
“This channel of purchase, information advice and support will be important in achieving a better understanding of First Nations businesses,” the report says.
Allianz says it is also a cause of concern that only 21% had general property cover.
“The disparity in general property insurance for First Nations small businesses indicates a particular risk for those businesses operating in the home and expecting coverage under their home and contents policy,” Ms Musson said.
“Business stock may not be covered, or have very limited cover, as part of general home and contents insurance, and in addition, if an incident was to occur in a home where a small business operates, the home insurance cover may also be void.”
The research defines First Nations businesses as enterprises that are majority owned by persons identifying as Aboriginal and/or Torres Strait Islander and with up to $20 million in annual turnover.
Click here for the report.