SME insurance uptake in UAE ‘worryingly low’
dubai — Small-to-Medium Enterprises (SMEs) in the UAE that do not have sufficient insurance cover risk facing serious financial repercussions, warns Nexus Group, the region’s largest financial advisor.
With SMEs representing more than 94 per cent of businesses in the UAE, accounting for 86 per cent of the country’s private sector workforce, and contributing to more than 60 per cent of the country’s GDP, comprehensive protection of these businesses’ valuable assets is of fundamental importance to their survival and growth, according to experts.
However, financial advisors say many SMEs both in the country and the region still do not have the protection they would need in the event of an emergency. In a recent survey undertaken by AIG, in which SME clients were asked why they purchased insurance, mandatory coverage and contractual obligations were the top responses.
“What we have generally observed in the UAE and the region is that many SMEs unfortunately do not recognise the importance of insurance — the focus is on what is required as opposed to what is advisable. This can be attributed to many factors, but predominantly a lack of awareness and an insufficient understanding of the significant benefits of asset protection,” says Phil Ashkuri, head of general insurance at Nexus Group. “By forgoing insurance, businesses are essentially without
by forgoing insurance, businesses are essentially without liability protection, placing their assets at financial risk.
Phil Ashkuri, Head- general insurance, Nexus Group.
liability protection, placing their assets at financial risk. Continuous education of SMEs on the benefits of insurance and its protective role is critical to reducing the number of uninsured businesses. Educating companies should be a community-wide effort — financial advisors must guide their clients, and providers have a responsibility of tailoring products that meet the requirements of the local market,” Ashkuri added.
Nexus Group has now added AIG’s multiline insurance product to its portfolio, enabling SMEs to group their insurance requirements — from property cover to workmen’s liability — into an affordable package.
“This bundled approach to SME protection offers businesses economies of scale. As opposed to having half a dozen policies, where minimum premiums could apply for each, having one multiline policy allows for reduced costs, improving efficiencies for all parties — the insured, the broker, and the insurer,” said Melina Argyriou, SME package manager for the Mena region at AIG.
— business@khaleejtimes.com