Surviving the Recession Cost UK Entrepreneurs GBP16 Billion in Personal Savings

Hiscox Reveals the Real Cost of the Economic Downturn for Country's SME Bosses

LONDON, March 30, 2010 - Entrepreneurs have pumped in up to GBP16 billion* of their own personal
savings to get their businesses through the last year, making this the UK's
'piggybank recession', according to new research released today.

The second 'DNA of an Entrepreneur' study, from specialist insurer
Hiscox, provides the first detailed account of the personal toll that the
economic downturn has taken on the country's small business owners.

One in five (20%) SME bosses took the decision to invest, on average,
GBP17,030 of their own savings while one in three (34%) slashed their own
salary to increase cashflow.

At the start of the recession over three quarters (76%) of SME bosses
believed they would survive unscathed. The reality, according to the new
research, is that they have faced more than financial turmoil:

    - One third (33%) increased their working hours by, on average, 12.5
      hours a week
    - One in ten (10%) worked over 50 hours a week to keep their businesses
      afloat
    - Almost two in five (38%) have suffered from stress, and a quarter (24%)
      have been unable to sleep due to worrying about their businesses
    - Over one in ten (13%) have seen their marriages suffer.

And SME bosses made sacrifices to protect their staff as well as their
businesses - while 34% cut their own salary, just 10% cut the salaries of
their senior staff.

Alan Thomas, small business expert at Hiscox, comments: "SME bosses have
been the unsung heroes of the recession. They have made enormous sacrifices
and taken significant personal and financial risks to pull their businesses
through the last two years. Their positive outlook for the year ahead is
testament to the resilience of UK entrepreneurs and with 25% planning to
expand in 2010, they are doing their bit to help lead the UK's recovery."

Looking to the future

Having survived a difficult year, expectations of 2010 are now cautiously
optimistic. Over half (55%) of bosses report feeling positive about the year
ahead, and a quarter (25%) will even be expanding their businesses in 2010.
Half of entrepreneurs (50%) surveyed felt they had made all the right moves
to survive the recession, and would not do anything differently if faced with
the situation again.

UK SME survival guide

SME bosses in the UK survived the recession through high levels of
personal sacrifice and by adopting a focused business strategy. The Hiscox
'DNA of an Entrepreneur' research investigated the survival strategies
adopted by successful SMEs, which included:

    - Focusing on securing relationships with existing clients (36%)
    - Reduced personal salary (34%)
    - Worked additional hours (33%)
    - Focusing on securing new business deals (31%)
    - Invested personal savings (20%)
    - Investment in adapting programmes and services to meet client needs
      (12%)
    - Recruited additional specialist staff to help attract or retain new
      clients (10%).

Notes to Editors

* The calculation is based on figures from The Department for Business
Innovation and Skills. There are approximately 4,750,000 SMEs with under 50
employees in the UK. The full press release from The Department for Business
Innovation & Skills and National Statistics can be found at
stats.bis.gov.uk/ed/sme/smestats2008-ukspr.pdf

Research was undertaken by The Survey Shop on behalf of Hiscox among 350
UK SME bosses of companies with under 50 employees, between 4th and 11th
February 2010. This made up part of a wider survey of 950 SME bosses across
Europe (France, Germany and the Netherlands). The UK results at the 95%
confidence interval have an estimated accuracy of +/- 4.5% and the other
countries an estimated accuracy of +/- 5.5%.

Hiscox's research showed that 20% of SME bosses in the UK invested
personal savings into their businesses. The average personal investment made
by SME bosses in the UK was GBP17,030. This average was calculated based on
the unprompted responses from those that invested personal savings.

20% of 4,750,000 SMEs is 950,000. 950,000 was then multiplied by the
average investment of GBP17,030. This gives a total of GBP16,178,500,000.

The average mean investment across all four markets that took part in the
research was GBP19,000 (EUR21,847). The personal investment averages for the
individual countries are:

The Netherlands - GBP10,186 (EUR11,714)

UK - GBP17,030 (EUR19,574)

France - GBP21,626 (EUR24,870)

Germany - GBP27,626 (EUR31,770)

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 Limited,
Hiscox Europe Underwriting Limited 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, Charlotte Nye, Account Director, +44(0)20-7908-6511, cnye at lexispr.com