Despite employing 40% of India’s workforce and accounting for 45% of the total Indian manufacturing output, less than 5% of SMEs in India are insured. Insurance plays a significant role in mitigating risks faced by this sector, which is referred to as the backbone of the Indian economy. And with the government targeting the sector’s share in exports to grow from 49 per cent to 60 per cent, and five crore more jobs in this sector by 2025, the need for insurance adoption in this sector has become all the more significant.
“It is critical for small businesses and startups to own business insurance that can provide financial protection against any monetary loss and helps in smooth business continuity. While different organizations have different risk tolerances and differing abilities to pay, we agree that insurance is a must-have for all business types and sizes,” says Sajja Praveen Chowdary, Head, Policybazaar for Business.
In events of natural or business catastrophe, the economic losses faced by MSMEs far exceeds the insurance loss, making them more vulnerable, while large corporations with their better risk practices and deeper cash reserves are able to cushion any setback. “Unlike large corporations that often have the financial buffer to absorb unexpected losses, MSMEs operate with thinner margins and are more vulnerable to uncertainties. Insurance is not just an added cost, but a crucial safeguard for business continuity of MSMEs. Moreover, they have specific needs that differ from larger enterprises. The scale of their risks might be smaller, but the relative impact can be significantly more detrimental, necessitating customised coverage,” says Sanjeev Mantri, ED, ICICI Lombard.
REASONS FOR LOW ADOPTION
Esta historia es de la edición June-July 2023 de Entrepreneur magazine.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición June-July 2023 de Entrepreneur magazine.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor? Conectar
How To Ask Family For Money
Your friends-and-family fundraising round doesn't have to be scary and awkward. Here's advice from one of the world's leading investors.
Data Breach Drama: When Trust Turns Costly In A Digital Age
Amid data breaches surges, Indian businesses are prone to financial and reputational fallout. Can cyber insurance emerge as a safeguard?
THE TERRAIN TAMER
Spearheading a California-based, Series D SaaS company is no easy feat. It requires a blend of ownership, innovation, and the ability to handle stress. But Anand Jain, co-founder and chief product officer of Clever Tap, finds his calm by escaping to rough terrain whenever he gets the chance-be it India or Colombia.
THE INTELLIGENT READS
Hardika Shah founded Kinara Capital in 2011 with the mission to address the acute credit gap in the micro-small-medium-enterprises (MSME) sector in India, by providing fast and flexible business capital to small business entrepreneurs. Despite operating in highly competitive and tough market of collateral free loans, Kinara Capital has been steadily growing in Hardika's leadership. In conversation with Entrepreneur, Hardika shares insights on her favourite books.
THE CURSE OF GROWING TOO FAST
FAIRE is a platform for small businesses, but it grew big the wrong way-almost becoming a $12 billion wreck. Here's how it fixed the problem, and why you should think twice before skyrocketing.
There's No Perfect Answer
I worked the same job for 19 years. I hated it, but it paid the bills. Then, in 2017, I entertained an exciting but terrifying question: Could I be an entrepreneur? I wasn't sure, so I needed something that felt like a guarantee. I searched for signs that would feel like a big, clear \"yes!\"
Give Yourself the Gift of Time
Happy holidays! Emmy Award-winning tech expert Mario Armstrong has five recs to get more hours in the day.
How to Become a Main Street Millionaire
It started when I bought one little laundromat. Now I have a whole portfolio of small local businesses that bring in tens of millions in revenue a year. Here's why following my playbook could be your ticket to financial freedom-and saving America's local small businesses.
Want to Better Serve Your Clients? Become Them.
As a designer for brands, starting my own product company gave me a dose of humility-and it changed the way I relate to clients.
How to Succeed With Gen Z Workers
People often say that younger employees are different. But are they? We asked six business leaders what they've learned, and how their teams thrive.
