Small and Medium Enterprises (SMEs) have been advised to embrace insurance as a tool to be able to manage risks and improve their credit profile.
This will ensure sustainability of the businesses.
Kenya Orient Insurance acting CEO, James Kaguchia, says that while SMEs are a critical component of the informal sector, most of them remain uninsured or under-insured and thus exposed to disruptive risk events.
“Despite the huge value they to add to the economy, SMEs remain largely uninsured and tend to be by-passed by the formal insurance market as they are viewed as being too risky,” said Kaguchia.
He gave fire, burglary, floods, drought, workplace injuries as some of the risks that SMEs have to grapple with.
These are real risks undermining the long-term viability and sustainability of small and micro enterprises.”
He was speaking at a breakfast meeting hosted by the company for brokers and agents within Nairobi region.
Insurance penetration in Kenyan remains low at a paltry three percent mostly attributable to lack of awareness.
Most SMEs view insurance as an additional financial expense.
A 2017 global survey by audit and consulting firm PwC revealed that while most SMEs owners polled knew the insurance needs of their business a good fraction lacked any liability cover.
