The contribution of micro, small and medium enterprises in India to the country’s GDP is nearly 37%. There are close to 6.3 crore registered MSMEs across the country which need insurance. However, only 5% of these enterprises are insured. That way, market opportunities get close to $ 40 billion. On the other hand, the overall non-life insurance penetration in India is below 1% of GDP as against nearly 3% of the world. The penetration needs to be higher for financial security and ease of doing business. For that, more enterprises should understand the significance of SME insurance and opt for the same. The contrary is exposing them to risks concerning business and health.
The Increasing Importance of SME Insurance in Post-Pandemic India
The COVID-19 pandemic has affected several businesses from big organisations to small companies. The major victim of the outbreak has been the SMEs with far-reaching consequences. While many had to close down, others struggled for sustenance. A survey reported that 67% of the participant MSMEs in India shut themselves down temporarily during FY21. Besides, over one-fourth of Indian MSMEs lost a market share of more than 3% during the pandemic.
A crisis in cash flow is the primary concern faced by SMEs while running their businesses. Each needs adequate working capital to pay the employees, sustain the functions of the business and experience growth. SME insurance helps safeguard an enterprise against unexpected financial losses. These enterprises need to depend considerably on third parties for their supply chain. By mitigating financial risks associated with third parties, SMEs can prevent their businesses from getting hampered.
In addition to this, an enterprise can also protect itself from unprecedented damages from fire, earthquakes, flood and the like with an SME insurance cover.
It’s high time you had a safety blanket for your business to fall back on at times of crisis. Opt for SME insurance from a reputed provider to get all-in-one protection for your company.
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