Start-up businesses powering UK growth, but must protect against business failure, warns AXA

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27 January 2012: Britain has in recent years become a nation of budding entrepreneurs, but three in four SMEs would struggle to survive a major interruption to their business without the necessary protection, warns AXA.

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AXA is in total agreement with the Government that small business start-ups are crucial to the future growth of the UK. However, it is concerned that without the proper protection in place new businesses may have the opposite effect. AXA is issuing a warning that it is important for businesses to protect their accumulated assets before they look for growth opportunities.

Over the last few years Britain has seen a wave of entrepreneurship as individuals fulfill their aspirations of running their own business, with nearly 450,000 small businesses registering during 2011, a significant increase on the 380,000 registrations during 2010.

However, new research from AXA has found that many are starting up with little awareness of the risks they face, nor the knowledge of how to protect themselves. One in four said they did not know what sort of insurance they needed when they launched, with the main reasons cited as being new to running a business and not knowing where to go to for advice.

Research carried out by AXA this month found despite the risks they face, few small businesses plan for every eventuality: 19% of UK SMEs surveyed could not identify the risks facing their business.

Almost half do not have a business continuity plan in place at all, and 91% have not reviewed their policies to see if they are covered for public disturbances such as the London riots. AXA Business Insurance is seen as being particularly useful for start-up businesses and small family firms as a cost-effective means of protecting themselves against the downturn.

These warnings come as the company launches a new direct business insurance service for small businesses ensuring they can get not only the bespoke protection they need, but also the support.

Amanda Blanc, CEO of AXA Commercial Lines, said: “Small businesses are the backbone of our economy and will help drive us forward, so they need to be as prepared for the risks they may face as they grow by taking out as much protection – and the right kind – as they can afford.

“Our research showed that many SMEs are starting up without knowing what they need, or who to turn to for advice, which is why we’re launching AXA Business Insurance. A dedicated website makes it easy for them to get the cover they need, at a price they can afford.”

About AXA Business Insurance

AXA Business Insurance has been launched to provide the support and guidance to help new businesses thrive. The entire process can be completed directly online and through its list of online questions for specific trades and professions, AXA Business Insurance allows sole traders and small businesses to buy exactly the cover they need, thereby reducing (potential start-up) costs.

AXA is one of the largest general insurers in the UK and underwrites a broad range of products for individuals and businesses. AXA Business Insurance offers business insurance for sole traders, the self-employed and small businesses through its website and is designed to make buying insurance fast, secure, convenient and easy-to-use. Small businesses can choose Public Liability, Employers’ Liability and Professional Indemnity insurance and can tailor cover to their own requirements.
AXA Group is a worldwide leader in insurance and asset management, with 216,000 employees serving 93 million clients. In 2010, IFRS revenues amounted to Euro 91 billion and IFRS underlying earnings to Euro 3.9 billion. AXA had Euro 1,104 billion in assets under management as of December 31, 2010.

The Group is included in the main international SRI indexes, such as Dow Jones Sustainability Index (DJSI) and FTSE4GOOD.

Our previous company performance is not a guide to how we may perform in the future.
Any opinions expressed in this media communication are made as at the date of this publication but are subject to change without notice.

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Helene Barnes/Sophie Goodwin
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