Insurtech companies are eyeing MSMEs with byte-sized offerings, says experts

Financial and Credit for MSMEs in India, the trust gap between the client and the insurance companies are more significant than in the rest of the world.

The credit and finance for small and medium-sized businesses: insurance companies traditionally focused on the efforts of large companies, but due to the rapid growth of digitization, many insurance companies are developing their products for the 6.3 million small and medium-sized enterprises in the country, offering low-cost and other over-the-counter offerings.

MSMEs

“MSMEs are one of the very underpenetrated areas in a sizable insurance portion is perhaps the fastest growing economy on earth,” claimed Raghuveer Malik, the Corporate Insurance Head of PolicyBazaar.

Malik spoke on the panel discussion “How embedded and bespoke InsurTech better serves SMEs and Enterprises” at the Niti Aayog’s FinTech Festival India held at Pragati Maidan in Delhi.

He further stated that the ease of the user’s experience is crucial to the insurance product’s adoption since the user has to contact the insurance company when applying for their claims, which will always be in the aftermath of a tragic event. “Just throwing a product out on the market and letting consumers consume isn’t enough. Through assistance and guidance, customers should be informed of the product’s characteristics.” PolicyBazaar receives 1,000-2,000 requests per day from SMEs.

MSMEs

Another option gaining popularity is embedded insurance, which involves incorporating insurance protection when the consumer is purchasing an essential item, say, announcing for an SME owner to take out an insurance policy for credit risk when they’re taking the loan of a fintech company.

“Insurance isn’t sold, but it is bought. Offering byte-sized products that are embedded insurance is effective because we know exactly what’s the context, and making the insurance searchable on the same interface makes it simple for customers to choose the appropriate product,” said Gourav Agarwal, manager of Partnerships at Cover Genius.

George Kesselman, Key Commercial Official, SEA, ZA Tech, said that they are finding inquiries from prominent organizations and HR programs or banks with many MSME customers and suppliers and are looking to provide specific insurance options to small enterprises through their platform.

Brands might have the perfect market-product fit, but they’re at risk when consumers don’t trust the brand. Although trust deficits are an international issue, it’s more prominent in India, as per Abhishek Poddar, Co-founder, and CEO of Plum. “Insurance is a unique product since customers pay all the money in advance in exchange for assurance for the future. For a business to earn the trust of its customers they need to give customers the assurance that they’ll be treated with respect for one year.”

By Mia

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