Singapore, 23 April 2024 – Awareness of today’s vast and complex cyber risk landscape is in decline among local small- and medium-sized enterprises (SMEs), this year’s QBE SME Survey for Singapore reveals.

605 SMEs were surveyed between December 2023 and January 2024*, whereby Singaporean SME business leaders were polled for their views on operational risks that most affect SMEs – covering the areas of cybersecurity, AI, and workplace safety and health (WSH).

47% of respondents said that they were fully informed of possible cyber risks, 10% less than the 57% recorded last year. As 2024 saw a smaller number of SMEs (25%) affected by cyber events (38% in 2023), this likely resulted in a decrease in awareness of possible cyber risks. That said, the number of executives who felt they were somewhat aware of cyber risks rose, from 40% last year to 48% this year, suggesting an acknowledgement of new risks that they may not yet know of. The top three risks cited by survey respondents include malware (43%), data breaches (43%), and phishing and smishing (39%).

The survey also found that the proportion of SMEs that don’t have any processes or protection against cybers risks also rose dramatically, from 9% last year to 19% this year. Mr. Shun Quan Goh, Head, Underwritng, Retail & SME, QBE Singapore, said, "This number shows how vulnerable SMEs may be to cyber risks, and underscores the need for companies to educate, upskill and protect themselves in this area. Businesses cannot afford to be complacent about cyber security, it really is a mater of when, and not if, a cyber breach happens.”

Of those with some form of protection, 59% of SMEs cited software solutions as the main form of protection for cyber security, followed by staff training (46%), dedicated staff to handle cyber security (44%) and policies for handling potential cyber risks (43%). Of note, just 38% of SMEs have insurance for cyber security risks, but over half (55%) of respondents have cited an openness to purchase cybersecurity insurance this year.

Mr. Goh added, “The cyber risk landscape evolves quickly, and it can be hard to keep up. This is reflected in our survey, with the majority of SME executives saying they don’t fully understand the threat domain. This is where insurance comes to the fore: not only can we help businesses manage and transfer the risk, we can help them stay ahead of emerging trends.”

AI is not a job displacer, but a productivity enabler

While much has been said of the potential of AI to replace human workers across swathes of the labour force, most survey respondents do not share this view. One-third (32%) of survey respondents expect AI to eventually replace or take over jobs in their company.

About a third of SMEs (30%) said that AI was a threat to business activity, but interviewees were mostly unconcerned about the nefarious potential of AI, with only 15% concerned about an AI-instigated cyber-atack; 10% concerned over privacy issues and identity breaches caused by AI; and a mere 6% concerned with data leakages brought about by the advanced technology.

Overall, almost half (49%) said that AI has had and/or will have an impact on their business productivity, particularly a positive one the data suggests, in the areas of automated response (6%), routine manual work/tasks (6%) and finance/accounting/audit functions (4%). Mr. Goh commented, “AI certainly has the potential to be a great enabler of beter productivity, and I would urge SMEs not to lose sight of the risks as they embrace this technology and all the benefits that can come with it.”

Workplace safety incidents decreasing, with mental health slightly taking a backseat

Action taken by SMEs in the last 12 months have improved health and safety overall, with 63% reporting no workplace safety incidents this year, compared to 55% last year. The top three actions taken by SMEs to ensure worker safety were fire safety (44%), electrical safety (37%) and general workplace training (37%). Comparatively, the top three actions that were taken the year prior were fire safety (54%), electrical safety (47%), and machinery, plant and equipment safety (40%), indicating a safer physical working environment.¹

At the same time, the proportion of SMEs that find mental health either very important or somewhat important fell slightly from 94% last year to 89% this year.

Nonetheless, 51% of SMEs feel that mental health is very important within the WSH paradigm , while 89% overall feel it’s important. The steps taken by these businesses to ensure metal and physical wellbeing include offering flexible work hours (44%), work-from-home arrangements (35%), and health and wellness benefits (28%). In addition to offering wellness programmes and benefits to support employee wellbeing, implementing a comprehensive Employee Compensation Insurance (ECI) plan can aid businesses in safeguarding themselves.

Mr. Ronak Shah, CEO of QBE Singapore said, “At QBE, we actively support SMEs in their efforts to prioritise employee well-being within their workplaces. Our aim is to empower SMEs to create positive organisational cultures while ensuring the security and support of their valued workforce. By taking proactive steps to address employee well-being and risk management, SMEs can strengthen their resilience and pave the way for sustained success in today's competitive talent market.”

For results of the same survey conducted with Hong Kong SMEs, please visit this link.

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*Notes to editors:

This is the second update of a two -part survey results. A first analysis on Singapore SMEs focused on the topics of business outlook, risk management (from an insurance coverage perspective) and online- offline/omnichannel purchasing preferences was released on 6 March 2024 and the release can be found here.

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Singapore-Hong Kong SME survey: Operational risks summary

About QBE Singapore

Established in 1891, QBE Singapore is a trusted provider of specialist expertise and professional insurance services. As a business insurance specialist, QBE Singapore offers a range of insurance products from the standard suite of property and casualty to the specialist financial lines, marine and construction. All are tailored to the individual needs of its small, medium and large customer base.

QBE Insurance (Singapore) Pte Ltd is part of the QBE Insurance Group listed on the Australian Securities Exchange and headquartered in Sydney. Present in Singapore for more than a century, QBE Singapore is the Republic’s oldest registered Australian company. For more information, visit www.qbe.com/sg