QBE highlights importance of risk reduction, resilience and education to improve small business insurance affordability

QBE Australia Pacific, which insures around 500,000 small businesses across metropolitan and regional Australia, has highlighted the importance of risk reduction, resilience and education in improving insurance affordability, in its submission to the Parliamentary Joint Committee on Corporations and Financial Services’ Inquiry into Small Business Insurance.

Affordability pressures are being felt across multiple small business insurance classes. For property insurance, key drivers include the increasing severity of extreme weather, the growing complexity of modern business operations, and rising construction and labour costs that continue to lift recovery and claims expenses. In liability and people risk classes, pressures are being influenced by rising legal and litigation expenses, increased psychological injury claims, rising medical and care costs, increasing claims severity and longer claim durations.

The submission highlights the importance of addressing these challenges through continued investment in mitigation and resilience – such as land‑use planning, stronger building standards and protections for high‑risk communities.  It also recognises the role of civil liability and tort law settings, particularly relating to personal injury claims, in supporting more sustainable liability insurance markets, aligning with the Insurance Council of Australia’s recommendations in this area.

It also acknowledges underinsurance as a significant and often hidden issue for small businesses, as rebuild costs, replacement values, liability exposures and business interruption risks evolve. Strengthening education and risk understanding is a key part of addressing this challenge, with insurers and brokers playing an important role in supporting businesses to manage changing risks, review cover regularly and access practical guidance over time.

Attributable to Sue Houghton, Chief Executive Officer of QBE Australia Pacific 

“Small business insurance affordability is being shaped by a range of pressures across both property and liability – from more frequent and severe weather and rising construction and labour costs, to increasing claims severity, medical expenses and litigation pressures.

Improving affordability over the long-term means looking beyond short‑term market cycles and focusing on what actually reduces risk and cost – stronger mitigation, better risk management and practical education. Progress is being made, but there is more work to do to deliver sustainable outcomes for small businesses.

Affordability isn’t just about the price of small business insurance. It’s also about whether businesses are appropriately protected as they grow and change. Education is a big part of that. When businesses understand how their risks evolve, review their cover regularly and take practical steps to reduce exposure, it can make a real difference over time. Insurers and brokers both play an important role in supporting that understanding – not just at the point of purchase, but throughout the life of the business. 

Small businesses are central to Australia’s economy, and improving insurance affordability in a lasting way will take sustained collaboration across government, industry and communities to reduce risk and build resilience over time.”

To view QBE’s submission to the Parliamentary Inquiry into Small Business Insurance, click here.