• Lack ofcapital is the top reason for failure to meet customer needs and invest ininnovation, with more than 60 percent of SMEs seeking external financing.
• Damage tobrand, increasing competition and workforce shortage cited as other top risks.

SINGAPORE - Media OutReach - 4 April2019 - SingaporeSMEs are struggling to meet customer needs, according to a study conducted by Aon, a leadingglobal professional services firm providing a broad range of risk, retirementand health solutions. Aon Inpoint's 2019 SME Insurance Survey incorporatesinsights from over 300 SMEs in Singapore.

Failure to innovate tops the list of risks faced by SingaporeSMEs. The adoption of technologies such as Artificial Intelligence, drones, andadvanced robotics have made SMEs vulnerable to new threats. With the speed ofchange in the global economy, these risks are becoming more unpredictable andSMEs find it difficult to prepare for them.

Inaddition, there is a clear link between the failure to attract and retain toptalent and the ability to deal with increasing competition (risk number three).Workforce shortage is the number seven risk asorganisations look to fuel growth through people. Thisbecomes more pronounced as companies strive to hire high performers and strikea balance between local and foreign talent.

The top 10 risks for Singapore SMEsare:

1.     Failureto innovate / Meet customer needs

2.     Damageto reputation / brand

3.     Increasingcompetition

4.     Economicslowdown / Slow recovery

5.     Cashflow / Liquidity risk

6.     Majorproject failure

7.     Workforceshortage

8.     Outsourcing

9.     Corporategovernance / Compliance burden

10.  Lossof intellectual property / data

When asked to predict the impact ofthese risks in two years' time, SMEs selected 'Increasing competition' as theirtop concern -- with 'Failure to innovate / Meet customer needs' coming in at numberthree.

Since Singapore is a mature economywith only five million people, up to 50 percent of SMEs are considering internationalisation;that is, venturing into overseas markets. Over 60 percent of SMEs seek externalfinancing via bank loans to power their growth plans and help with cash flowmanagement due to delayed payments from customers.

According to Andrew Hare, Managing Director, AonInpoint, Asia: "Given the extent of Singapore's market size, SMEs must seek toachieve growth on a regional and global scale. However, with this comes theneed to mitigate new risks in new territories -- and the ability to employ insuranceand financing to boost their expansion plans."   

Richard Tan, Head of Sales, Aon Singapore says, "As SMEslook to innovate and internationalise, they must have the right corporategovernance structure and risk management process in place. In addition, the On Demandeconomy has brought about issues around consumer and worker safety, consistencyin service quality, and data privacy. Having a deep appreciation of theseevolving risks and taking appropriate measures quickly could make or breaktheir business ventures."

About The Study

The study surveyed over 300 SMEs inSingapore and provides key insights about their business priorities, top risksfaced and how they buy and use insurance to reduce volatility and drive growth.

SMEs are defined as enterpriseswith annual revenues of less than SGD 100 million and a workforce of fewer than300. This was sub-segmented into Micro SMEs (<SGD1 million); Small SMEs(SGD1 million to SGD10 million), and Medium SMEs (SGD10 million to SGD100million).

About Aon

Aon plc (NYSE:AON) is a leading global professional services firmproviding a broad range of risk, retirement and health solutions. Our 50,000colleagues in 120 countries empower results for clients by using proprietarydata and analytics to deliver insights that reduce volatility and improveperformance.

Aon Inpoint is the management consulting and advisory arm of Aon. AonInpoint helps 'Empower the Results' of financial services providers across the globe by helping insurers, reinsurersand other financial services firms to significantly improve their performancein the areas of growth, innovation and efficiency.

For further information on our capabilities and to learn how we empowerresults for clients, please visit https://www.aon.com/apac