PRESS RELEASE QBE SURVEY FINDS NORTH WEST SMEs BUOYANT IN THE DOWNTURN MANCHESTER 11 DECEMBER 2008 Key points • 63% of North West SMEs maintained or increased sales in 2008 • 59% expect to achieve the same result in the coming year • 1 in 10, however, face bankruptcy if conditions persist in 2009 Overall sales 2009 and outlook 2009 Despite the challenges posed by the current economic downturn, small and medium sized enterprises (SMEs) in the North West of England have reported a sturdy performance in the past year. 63% of SMEs in the region have seen either increased or flat sales during 2008 and the outlook for 2009 also looks promising, with just under two thirds of the region expecting to maintain or increase sales in the coming year. The QBE Business Sentiment Survey QBE, one of the UK’s largest insurers of business risks, undertook the survey of SMEs in the North West during November 2008. The data which were gathered and analysed by independent survey company, The Survey Shop, identified a mixed picture of caution in the SME sector, but positive approaches for addressing the difficulties. Challenging conditions Although the current difficult conditions continue to pose a risk to SMEs in the UK, 74% of businesses in the region will not face extreme difficulty or the risk of insolvency should the recession continue for another twelve months. However, around one in ten (12%) North West-based SMEs say they will find conditions either very or extremely difficult to the point that they would be unlikely to survive if they persist for another 12 months. Just under two thirds (61%) of SMEs in the North West believe these are the most challenging economic conditions they have ever faced. PRESS RELEASE Innovative response to economic downturn In response to the current downturn, SMEs in the North West are active in developing ways to mitigate the problems. Key among most businesses’ strategy is to grow customers and markets and as such 41% of North West-based SMEs are likely to increase their use of sales and marketing in 2009 to achieve this. A further third of SMEs in the region have reduced fixed costs in order to ease current business issues. Part of their strategy encompasses an increased utilisation of advisors and insurers with 67% of respondents expecting to use accountants in 2009, which is a significant jump from the 29% that actually used their services in 2008. This trend was particularly marked in the uptake in SMEs turning to insurers or insurance brokers with 43% expecting to use their services in 2009 up from only 14% during 2008. This move, perhaps reflects growing concern about the risks that business is likely to encounter as it moves through the recession. Antony Broome, Commercial Manager at QBE’s Manchester office, commented: “Despite the pressure on UK business in the downturn, it is encouraging to see that North Western SMEs are keen to implement measures and seek professional advice to help mitigate business issues and concerns. Similarly, with conditions as challenging as they currently are for the SME sector, it is certainly impressive that such a large proportion of SMEs in the North West have not only maintained sales but, in some cases, increased them.” Extracts from the survey can be found at: http://www.qbeeurope.com/businesssentimentsurvey.pdf < Ends > For further information please contact: Henny Breakwell, Haggie Financial tel: + 44 20 7417 8989; email Henrietta.Breakwell@haggie.co.uk Samantha Whiteley, Haggie Financial tel+ 44 20 7417 8989; email firstname.lastname@example.org Helena Christopher, QBE European Operations Tel: +44 20 7105 4431; email email@example.com PRESS RELEASE Notes to editors About the QBE Business Sentiment Survey Data were collected by The Survey Shop between 13th - 26th November 2008. A total of 410 interviews were conducted by telephone using quota sampling. Respondents were qualified as owners, managers and decision-makers, and the data are representative of UK SMEs. About QBE in Manchester QBE’s Manchester operation employs 26 staff and has had a presence in Manchester since 1988. Since its expansion in 2008, it has increased its product offering to include, liability, commercial motor, commercial property, professional indemnity and trade credit insurance. The team in Manchester supports businesses located in the North West QBE’s Senior Underwriting team in Manchester Antony Broome leads QBE’s Manchester operation and has been active in the Manchester insurance market since 1989 when he joined QBE. Anna Spink, Senior Property Underwriter, previously with Affiliated FM and Chubb Insurance, has 20 years of experience in the regional insurance market. Joanne McCulloch, Senior Motor Underwriter, has 15 years of experience in the Manchester insurance market, most recently with Brit Insurance, Rob Moores, Senior Casualty Underwriter, has been with QBE’s Manchester office for over a decade and has been in the Manchester market for 23 years. David Semple, Senior Underwriter for trade credit who joined QBE in 2007. QBE across the UK Under the leadership of Managing Director, Terry Whittaker, QBE operates seven UK regional underwriting centres – Birmingham, Bristol, Chelmsford, Glasgow, Leeds Manchester, Stafford. Each centre offers market leading products across the full spectrum of property, casualty, professional indemnity, trade credit, and motor insurance on both a combined and a standalone basis. QBE Globally QBE Insurance Group is. Standard & Poor’s ‘A+’ rated and is one of the world's leading international insurers and reinsurers, headquartered in Sydney, Australia. We operate out of 45 countries across the globe, with a presence in all key insurance markets and are lead underwriters within our chosen markets, setting rates and conditions. For the year ended 31 December 2007, the company underwrote gross written premium totaling £5,188 million and held shareholders’ funds of £3,746 million.