Experts from the country’s insurance industry have called on small and medium enterprises (SMEs) to adopt insurance policies to mitigate business risks and ensure sustainability.
Experts who convened in the just-concluded webinar, co-hosted by Coronation Insurance Plc and Coronation Life Assurance, are working with Access Bank, for example, to develop business protection packages that include basic cover against fire, flood and limited liability as well as limited employee life insurance – providing an annual income for three years – to enable Nigerian SMEs to affordably cover the basics of successfully operating their businesses.
The advice comes in the wake of the huge losses suffered by SMEs due to the civil unrest that has been seen in several parts of the country.
They said that SMEs have been extremely affected by the recent crisis which originated from the protest and other existing factors such as exchange rate, interest rate and unemployment, “while some are geopolitical factors , technological factors, which could most of the time temporarily put their activities on hold, and in some cases permanently.
They suggested that since SMEs are the main engines of the economy, they should be the main purchasers of insurance policies, as several risks abound in business.
Speaking at a virtual meeting titled: “Importance of Insurance for SMEs: Insurance requirement for a growing business”, Managing Director of Coronation Insurance Plc, Olamide Olajolo, said the webinar “makes part of the company’s thought leadership initiatives designed to provide insightful information for businesses and individuals in various sectors of the economy.”
Olajolo explained that insurance is important for everyone, including SMEs, saying the past three years have been marked by uncertainty.
Head of Audit, Risk Management and Compliance, Ms. Adenike Janet Olabiran, said: “Over these 30 years, our liquidity ratio and our capital adequacy ratio have far exceeded regulatory requirements. Indeed, it is now far above the requirements by 400%.
“In our 30 years of operation, we have never fallen short of this regulatory metric requirement of 20% and 10% respectively at any time. It shows that we have been a very stable bank,” she said.
“We have moved from the traditional banking mode of operation, which is mainly manual, to the operation of online banking. So there is online access to account opening and loan application process, approval and disbursement through our electronic channel, she added.
Looking to the future, Okoli said the board had “undertaken a comprehensive study for the transformation, repositioning and rebranding of the bank with a five-year strategic plan in place and its implementation.” .