Many Australian small businesses are facing financial pressure but remain unprepared for potential disruptions, according to the 2026 Vero SME Index, which found that most have never conducted a formal risk analysis.
The report shows that 74% of small businesses have never completed a risk analysis. This comes as 43% reported a drop in revenue over the past 12 months.
The survey highlights what it describes as a “two speed economy.” Almost half of small businesses experienced a downturn in revenue, while more than a third of large businesses, or 39%, reported growth during the same period. Micro businesses appear to be the most affected, with 61% saying their revenue declined in the past year.
Differences in business performance are also reflected in how organisations manage risk. While 64% of large businesses reported having established risk management processes, three quarters of small businesses said their approach to risk management is largely ad hoc.
Preparedness for operational disruption also varies widely. A third of small business owners and decision-makers said they were unfamiliar with the concept of business continuity planning, while another 25% said they had heard of it but were unsure what it involved.
The index is based on a survey of more than 1,500 Australian businesses across different size categories, from micro enterprises to very large companies, providing insight into business conditions and challenges.
Vero’s head of distribution, Anthony Pagano, said businesses are operating in an environment where economic uncertainty coincides with a growing range of risks.
“SMEs are navigating a landscape shaped not only by economic uncertainty, but an expanding range of risks, with over half of our survey respondents concerned with human factors like mental health and staff retention,” Pagano said.
“To guide them through uncertain times, we found over half of businesses received risk advice from their insurance broker, with the majority of businesses actioning this advice.
“After 15 years of our SME Index, we’re still seeing the crucial and increasing role insurance brokers play in a challenging climate, helping them make informed decisions and prepare for their future.”
The survey also examined the role of insurance brokers in business operations. It found that 80% of businesses had worked with a broker in the past year, and 42% had stayed with the same broker for more than three years.
Overall satisfaction with brokers stood at 69% among both small and large businesses. The findings also suggest higher claims satisfaction among broker users, with 95% of heavy users reporting satisfaction with their claims experience.
“This year’s findings highlight not only the stability of broker relationships, but also the deepening reliance and satisfaction among businesses that choose to collaborate with brokers,” Pagano said.
“We’re also seeing strong numbers of businesses continuing to use the same broker over a long period, underscoring the importance of fostering deep relationships and working closely with clients as their challenges and needs evolve. Against a backdrop of heightened broker consolidation, intense competition and prevailing market pressures, it is encouraging to see businesses maintain these connections.”
The report also explored attitudes toward artificial intelligence in insurance processes. According to the survey, 55% of businesses said they are comfortable with brokers using AI in insurance-related tasks.
Businesses reported the highest level of comfort with AI being used for operational support, including faster quoting through pre-filled forms (74%), comparing insurance products (72%), and chatbots (64%).
At claims stage, many respondents said they were comfortable with AI assisting administrative tasks such as providing evidence (67%) and reporting incidents (64%). However, fewer were comfortable with AI supporting claim outcome decisions, with only 40% indicating acceptance.
“We have seen clearly that businesses are beginning to embrace the adoption of AI in the insurance process, as a useful tool to support efficiency, but our report has highlighted the importance of human judgement at the crunch time of a claim,” Pagano said.
“It is critical that brokers highlight their expertise even as they quickly adopt AI in their workflow, and keep trusted relationships at the forefront especially during the course of a claim.”
