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

SINGAPORE -�Media OutReach�-�4 April
2019 - Singapore
SMEs are struggling to meet customer needs, according to a study conducted by Aon, a leading
global professional services firm providing a broad range of risk, retirement
and health solutions. Aon Inpoint's 2019 SME Insurance Survey incorporates
insights from over 300 SMEs in Singapore.

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

In
addition, there is a clear link between the failure to attract and retain top
talent and the ability to deal with increasing competition (risk number three).
Workforce shortage is the number seven risk as
organisations look to fuel growth through people.�This
becomes more pronounced as companies strive to hire high performers and strike
a balance between local and foreign talent.

The top 10 risks for Singapore SMEs
are:

1.���� Failure
to innovate / Meet customer needs

2.���� Damage
to reputation / brand

3.���� Increasing
competition

4.���� Economic
slowdown / Slow recovery

5.���� Cash
flow / Liquidity risk

6.���� Major
project failure

7.���� Workforce
shortage

8.���� Outsourcing

9.���� Corporate
governance / Compliance burden

10.� Loss
of intellectual property / data

When asked to predict the impact of
these risks in two years' time, SMEs selected 'Increasing competition' as their
top concern -- with 'Failure to innovate / Meet customer needs' coming in at number
three.

Since Singapore is a mature economy
with 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 external
financing via bank loans to power their growth plans and help with cash flow
management due to delayed payments from customers.

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

Richard Tan, Head of Sales, Aon Singapore says, "As SMEs
look to innovate and internationalise, they must have the right corporate
governance structure and risk management process in place. In addition, the On Demand
economy has brought about issues around consumer and worker safety, consistency
in service quality, and data privacy. Having a deep appreciation of these
evolving risks and taking appropriate measures quickly could make or break
their business ventures."

About The Study

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

SMEs are defined as enterprises
with annual revenues of less than SGD 100 million and a workforce of fewer than
300. This was sub-segmented into Micro SMEs (

About Aon

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

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

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