SMES urged to leverage insurance policies to tackle economic challenges

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PROFESSIONALS in the insurance industry have called on small and medium- scale enterprises ( SMES) to embrace insurance.

The insurance players, who gathered at the justconcluded Coronation Insurance webinar, examined the significant role insurance plays in ensuring financial stability, especially during challenging economic times.

Speaking during the session, Assistant Director, Underwriting and Marketing, Africa Re, Yinka Dawodu, highlighted the benefits of insurance and its role in mitigating risk, protecting assets and fostering peace of mind. Hence, he said the sector plays a critical role in insurance in ensuring financial stability.

Focusing on the current economic challenges in the country, Dawodu said a robust insurance strategy could be instrumental in navigating issues like inflation, foreign exchange constraints and talent flight.

Also speaking at the forum, the Managing Director/ Chief Executive Officer, Sam- Vic Insurance Brokers Limited, Oluwarotimi

Adewole, described insurance as a liabilitydriven business.

For him, claims and expense inflation are correlated with general inflation but tend to exceed consumer price inflation, particularly for certain key lines of nonlife business. He said many studies have confirmed that claims and expense inflation have significantly exceeded the general inflation for several years with a sharp increase observed in recent times.

The Head of Corporate Underwriting at Coronation Insurance, Augustine Aniekwe, said that the underwriting firm provides exceptional advisory services to ensure clients maintain adequate coverage of their property values, saying, the proactive approach helps clients to avoid underinsurance and ensures they receive the full value of their claims.

“While the claims and expense inflation are correlated with the general inflation, there are also certain differences, noting that, it is important to consider the insurance- specific characteristics of the inflation to get to the claims and expense inflation,” he said.