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AXA - Be Life Confident

Media

2006

(13/04/2006) UK SMEs cite severe weather patterns as a bigger threat to their businesses than poor management or competition

New findings from AXA's Business Risk Monitor survey have revealed that UK SME directors believe that Environmental Disasters - such as flooding and hurricanes are a more common reason for business failure than poor management or competition.

When asked what they thought was the most common reason for business failure just 3% accredited this to bad or poor management and only 1% believed that it was down to competition. A much bigger proportion considered a potential environmental disaster (12%) as a bigger threat to their businesses.

The top six reasons thought to be the main causes of business failure were thought to be (ranked in order of importance):

  1. Unstable economy
  2. Lack of good staff
  3. Lack of business continuity planning
  4. Technology failure
  5. Unreliable suppliersv
  6. Non compliance with legislation
  7. (Environment disasters)

Douglas Barnett, Risk Control Strategy Manager, AXA said;

"Whilst the key factors are at the top of the list as you would expect, we were very surprised to see that more business owners thought that businesses were more likely to fail due an environmental disaster - rather than as a result of poor management and the threat of competition.

"Both of these factors are regularly mentioned by organisations that handle insolvencies and in the media, as reasons why businesses fail in the UK. In 2005 there were 333,000 business failures in the UK a rise of 4% from the previous year1. Whilst I appreciate that we can not afford to ignore the effects of global warning and changes in weather patterns I would think poor management and marketing are a much more sinister and immediate threat to the success of UK plc."

However, the survey did show that businesses are beginning to recognise the importance of business continuity planning. 33% stated that not having one in place is a likely reason for business failure when disaster strikes.

Douglas Barnett from AXA continued;

"Despite the increasing awareness of the importance of business continuity planning our research shows that 39% of businesses do not have such a plan in place. That means that 1.4 million businesses are really putting themselves at risk2. I can not emphasise more the importance of having a comprehensive and regularly updated plan. Businesses need to prepare for every eventuality - droughts included!"

For more information on how to develop your own business continuity plan please visit www.axa4business.co.uk.

- Ends -

More information

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Notes to Editors

1The Small Business Service 2005

2There are 3.8 million SME's in the UK: National Audit Office

About AXA

AXA is a world leader in financial protection. AXA's operations are diverse with major operations in Western Europe, North America and the Asia/Pacific area. AXA employs 120,000 staff and tied agents and, as of 31 December 2005, had € 1,064 billion in assets under management. AXA reported total IFRS revenues of € 72 billion and IFRS underlying earnings of € 3,258 million for the full year 2005. Our previous company performance is not a guide to how we may perform in the future.

AXA ordinary shares are listed on the Paris Stock Exchange; AXA American Depositary Shares (ADSs) are listed on the NYSE under the ticker symbol AXA.