One in Three of Europe's Small Businesses Plan to Expand in 2010

But Warn That Government Bureaucracy Threatens Their Entrepreneurial Spirit

LONDON, April 28, 2010 - In a sign of renewed confidence among Europe's entrepreneurs, almost one
in three (30%) small businesses are set for expansion in 2010 - with two
thirds (63%) of those planning to go for growth during the second half of the
year - according to new research published today.

The second 'DNA of an Entrepreneur' study* carried out by specialist
insurer Hiscox among nearly 1,000 small business owners in the UK, Germany,
France and the Netherlands, also found that three in five (58%) of those
polled are optimistic about the year ahead.

With the recession now officially at an end, over half (53%) of those
questioned believe 2010 is a good year to start up a small business with
nearly a fifth (19%) pinpointing gaps in the market caused by company
closures as a key opportunity to capitalise in the economic upturn.

Lack of support

But despite growing optimism, one in five (20%) SME bosses are concerned
that there is not enough support for emerging small businesses. In fact, the
majority (65%) believe that government bureaucracy is threatening their
country's entrepreneurial sprit, identifying four major barriers to setting
up on your own:

    - Unfavourable taxation system (71%)
    - Inflexible labour laws (63%)
    - Burden of benefits and social security payments (58%)
    - Lack of support from government (37%).

However, when it comes to nurturing future business talent the UK topped
the poll - a third (31%) of UK SMEs say our education system encourages
individual ideas and dreams, compared to just 19% in Germany.

Risky business

The study also found the recession impacting entrepreneurs' attitude to
risk - just one in three (36%) small business owners say they are comfortable
with taking risks compared to 40% at the time of the last study two years
ago**.

Figures also point to a glaring disparity between countries when it comes
to new ventures. Less than one in ten (8%) bosses in Germany accept the need
to take a gamble when running their business compared to 38% in France and
29% in the Netherlands and the UK.

As the most risk averse of Europe's SME bosses, over a third (37%) of
those polled in Germany admitted they would prefer to run their business
without having to take any chances. In contrast, just 11% from France and 15%
from the Netherlands and the UK said the same.

Alan Thomas, small business expert at Hiscox comments: "The SME sector is
a strong bellwether for the rest of the economy so it's a great sign that
Europe's entrepreneurs believe they are now in a sound financial position and
well placed for growth in the second half of 2010, despite being more risk
averse.

"But small businesses cannot lead the charge alone. The tough economic
climate of the last two years has left many in a delicate position so it's
vital that the right support is provided to breakdown any barriers
threatening Europe's future entrepreneurial success."

    The DNA of Europe's Entrepreneurs

                                       UK     Germany   France  Netherlands

    Future optimism

    % planning expansion during the
    first half of 2010                   9%       10%       21%         5%
    % planning expansion during
    second half of 2010                 16%       20%       28%        14%
    % optimistic about year ahead       55%       61%       51%        68%
    % believe 2010 is a good time to
    start a business                    50%       49%       53%        59%
    % recognise opportunities caused
    by gaps in the market from
    company closures                    14%       19%       20%        26%

    Support for SMEs

    % believe there is not enough
    support for SMEs                    32%       54%       37%        28%
    % who think that government         59%       73%       64%        66%
    bureaucracy is threatening
    entrepreneurial spirit, due to:
    - Unfavourable taxation system      74%       71%       74%        63%
    - Inflexible labour laws            55%       65%       73%        66%
    - Burden of benefits and social
    security payments                   49%       66%       69%        56%

    - Lack of support from
    government                          32%       54%       37%        28%

    % believe that their country's
    education system encourages
    individual ideas and dreams
    Attitude to risk                    31%       19%       28%        24%

    % comfortable with taking risks     39%       33%       37%        34%
    % accept the need to take a
    gamble when running their
    business                            29%       8%        38%        29%
    % prefer to run their business
    without having to take any
    chances                             15%       37%       11%        15%

Notes to editors

* Research conducted by The Survey Shop on behalf of Hiscox among 970 SME
bosses of companies with less than 50 employees in the UK, Germany, France
and the Netherlands between 19th and 25thFebruary 2010.

** Research conducted by The Survey Shop on behalf of Hiscox among 1,150
SME bosses in the US, Holland, Germany, France and the UK between 27th May
and 27th June 2008.

About Hiscox

Hiscox, the international specialist insurer, is headquartered in Bermuda
and listed on the London Stock Exchange (LSE:HSX). There are three main
underwriting parts of the Group - Hiscox London Market, Hiscox UK and Europe
and Hiscox International. Hiscox London Market underwrites internationally
traded business in the London Market - generally large or complex business
which needs to be shared with other insurers or needs the international
licences of Lloyd's. Hiscox UK and Hiscox Europe offer a range of specialist
insurance for professionals and business customers, as well as high net worth
individuals. Hiscox International includes operations in Bermuda, Guernsey
and USA. Hiscox Insurance Company Limited, Hiscox Underwriting Ltd, Hiscox
Europe Underwriting Ltd and Hiscox Syndicates Limited are authorised and
regulated by the Financial Services Authority.

For further information, visit www.hiscox.com

For further information please contact: Hiscox Ltd, Abi Clark, Group Communications, +44(0)20-7448-6470, abi.clark at hiscox.com; Lexis Public Relations, Jess Gooch, Press Office, +44(0)20-7908-6447, jgooch at lexispr.com; Anna Smith, Press Office, +44(0)20-7908-6464, asmith at lexispr.com