PEER-to-peer (P2P) operator Crowd Sense Sdn Bhd has launched the KITACOVER rakyat-centric campaign during the MyFintech Week organised by Bank Negara Malaysia.
Targeting small and medium enterprises (SMEs), the CSR campaign was launched as a two-pronged approach first to educate and create awareness about the importance of insurance coverage by providing complimentary advisory services to business owners and also for Cofundr to crowd-finance the relevant insurance premiums due and pay to the insurer first to make sure that the insurance coverage is in place.
“The spirit of the KITACOVER campaign is quite straightforward. We acknowledge that SMEs are integral to the growth of the Malaysian economy and its rakyat,” said Cofundr director Ahmad Kamal S. Awab.
Globally, SMEs account for the majority of businesses worldwide and are important contributors to job creation and economic development as they represent about 90% of businesses and more than 50% of employment worldwide.
As stated in the SME Annual Report released by SME Corp Malaysia, SMEs contributed a whopping RM553.5 bil to the GDP in 2019.
“However, the uptake on insurance in SMEs when it comes to natural disasters such as flooding is still a vital concern,” Ahmad Kamal continued.
“According to data released by AIG Malaysia Insurance Berhad, only 15% on insured policyholders have purchased the flood cover.
“This means that more that 80% of SMEs have no coverage against flood peril, denoting the lack of comprehension on the urgency of the risk and consequences to the overall running of their business.
“Furthermore, those that are insured, a majority of them are underinsured. Given the perceivably high-level exposure to multiple risks, insurance is undeniably one of the most crucial risk transfer tools that can make an important contribution to financial management and reducing the share of losses absorbed by businesses and governments.
“The recent catastrophe that hit us should send a clear message to SMEs across the country to be more proactive and to look into insurance coverage as it is the only defence we have to mitigate the financial impact from any untoward incidents.”
According to Cofundr communications director Sean Khoo, the team had, when drawing up the campaign, narrowed down the two main reasons why the situation had not changed over the years.
“The first is about affordability. When faced with cash flow constraints, SMEs will delay, reduced and in some cases even forgo their insurance coverage and this is simply because insurance is a non-income generating expense, plus you need to make the full premium payment upfront,” he said.
Khoo, who is also the project manager of the KITACOVER campaign noted that as a result, most SMEs would rather assume the risks themselves until tragedy strikes and they end up not only losing everything but may even be laden with debt.
“The second reason is due to a lack of awareness about insurance as SMEs are not aware of the type of coverage that’s available to them to protect their business assets,” he pointed out.
“In such a situation, where do they go to get the right advice and to educate themselves about insurance?
“Knowing all this, we feel that Cofundr could step in and leverage on its fintech solutions to assist SMEs to solve these problems. It is our hope that SMEs out there would support the campaign and to get themselves covered against any unwanted risks.” – Jan 24, 2022
