The SME market is a crucial segment of the South African economy, and the opportunities it presents are not only to start small businesses but also to grow them into bigger ones.
In a recent interview with Michael Clack, Business Development Manager of Renasa, he highlighted that this segment of the market is showing significant growth due to the pandemic, the economy, and various other reasons.
SMEs operate on small margins, are volatile to change, and have limited funding, which means that they may overlook insurance as they are focused on surviving. Therefore, one of the most significant needs is educating SMEs on the necessity of insurance. The nature of the SME business is flexible, and therefore, a flexible insurance product is required.
Unfortunately, the industry is not spending enough time promoting SME insurance to brokers and encouraging them to get their SME clients insured. The main focus is still on traditional commercial business, and there is a need for education and getting the message out there. A low advice product is what is needed, one that offers flexibility with a standard product that provides the coverage that start-up businesses require.
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Renasa’s LiquidSure product aims to guard against making an inflexible commercial product to fit the requirements of a very nimble and flexible business segment. With various cover options, the LiquidSure product offers a quick turnaround, not taking much time with quoting and surveying. It is an IT-based product, with a cyber risk portion that needs to be added.
Michael Clack believes that direct insurers have not yet had the opportunity to capitalize on this type of business. Although direct insurers go for the lower advice segment as well, a lot of businesses still see the value of intermediated advice, not only from the on-take of a new policy but also when it comes to claims. It gives greater options and choices for the insured, and SMEs need that flexibility.
The SME segment of the South African economy is a crucial one, and SMEs should not overlook the importance of insuring their businesses. They need flexible insurance products that can adapt to their business requirements, and the industry should focus on educating SMEs on the necessity of insurance.
Renasa’s LiquidSure product provides a low advice product that offers flexibility with various cover options and quick turnaround. It is a growth opportunity for brokers, and they should consider focusing on this segment of the market.