Experts urge SMEs to adopt insurance policies to hedge risks

Experts in the nation’s insurance sector have called on Small and Medium Scale Enterprises (SMEs) to adopt insurance policies to mitigate business risks and ensure sustainability.

The experts who gathered at just concluded webinar jointly organised by Coronation Insurance Plc and Coronation Life Assurance are working with Access Bank, for example, to develop Business Protection Bundles including basic fire, flood, and limited liability cover as well as limited employee life insurance – providing three years’ yearly income – to enable Nigerian SMEs to affordably cover the basics of successfully operating their businesses.

The advice is coming in the wake of the huge losses suffered by SMEs due to the civil unrest that was witnessed in several parts of the country.

They said SMEs were hugely affected by the recent crisis that originated from the protest and other existing factors such as exchange rate, interest rate, and unemployment, “while some are geopolitical factors, technological factors, which most times could put their businesses on halt temporarily and in some cases permanently.”

They hinted that since SMEs are the key drivers of the economy, they should be the major buyers of insurance policies as several risks abound in business.

Speaking during a virtual meeting tagged: “Importance of Insurance for SMEs: Insurance Requirement for a Growing Business,” the Managing Director, of Coronation Insurance Plc, Olamide Olajolo, said the webinar “is part of the company’s thought leadership initiatives designed to provide relevant insights for both corporate and individual clients across various sectors of the economy.”

Olajolo, explained that insurance is important to all and sundry including SMEs, saying the past three years have been marked by uncertainties.

The Head of Audit, Risk Management, and Compliance Department, Mrs. Adenike Janet Olabiran, said, “over these 30 years, our Liquidity Ratio and Capital Adequacy Ratio have been far above the regulatory requirements. Indeed, it is now by far more than 400 percent above the requirements.

“In the 30 years of our operation, we have never fallen short of this regulatory metric requirement of 20 percent and 10 percent respectively at any time. This shows that we have been a very stable bank”, she said.

“We have transformed from the traditional banking mode of operation which is mostly manual to e-banking operation. Hence there is online access to account opening and loan application process, approval, and disbursement through our e-channel, she added.

Going into the future, Okoli said the board has “undertaken comprehensive study for the transformation, repositioning and rebranding of the bank with a five-year strategic plan in place and the implementation.”