Vero has released its annual SME Insurance Index, revealing a sobering outlook for the country’s small and medium businesses.
The national survey of 550 SME owners and decision-makers reveals SMEs are under significant pressure. Nearly two-thirds of SMEs (63 percent) have experienced revenue decline over the past year, and a further 17 percent of businesses' income has been slashed by over 25 percent.
Businesses are feeling the pressure, with over one in five (21 percent) not confident in their business and only 36 percent of Kiwi businesses feeling confident in their operations.
Sacha Cowlrick, Executive General Manager at Vero said SMEs are under immense pressure but must continue to make smart choices to protect their businesses.
"It continues to be a tough economic environment and declining revenue is taking a toll on business confidence. When some businesses have seen their income slashed by over a quarter, it might be tempting to reduce expenses like insurance but when the unexpected happens, having adequate cover could be the difference between folding under pressure and finding a way through," said Cowlrick.
SME owners report that most business pressure comes from external forces, outside of their direct control. They called out increasing costs (88 percent) and economic downturn (83 percent) as the top concerns.
Political upheaval is also on business owners' minds, concerned with changes to tax policy (69 percent), regulatory changes (61 percent), and political instability (61 percent). This is compounded by the current volatile global landscape, adding another layer of unpredictability to an already complex operating environment for SMEs.
“There is no doubt that there are very real macro-pressures concerning SMEs, but it’s critical that business owners focus on the things they can control in order to give them the best chance of weathering the storm,” added Cowlrick.
The financial reality of 2026 is putting businesses' resilience to the test with only a quarter (24 percent) believing their business is very resilient.
Vero’s research highlights that for SMEs, resilience is no longer about being immune to challenges, but the ability to quickly recover and pivot.
Over 60 percent of business owners said resilience is about being able to adapt and change in response to challenges, recover quickly from disruptions and over half (54 percent) said resilience means withstanding financial shock.
The strain on business owners is compounded by the fact that nearly half (47 percent) of businesses admit they never or rarely conduct formal risk analyses, and over half (53 percent) operate without any structured risk management framework. This is despite six in 10 Kiwi businesses expecting to face at least one major operational risk this year.
Cowlrick said proactive planning is essential.
"Business resilience isn’t just about bouncing back after an event. It’s about understanding your exposures and making informed decisions before something happens. An insurance broker can offer critical advice to help SMEs develop a resilience strategy.”
