Small and Medium Enterprises (SMEs) are the lifeblood of the Indian economy, driving innovation, employment, and growth. Yet, a significant portion of these vital businesses remains uninsured, leaving them vulnerable to a myriad of risks. To shed light on this critical issue and explore pathways to greater insurance penetration, SMEStreet.in recently sat down for an exclusive interview with two prominent figures in the industry: Mr. Santosh Sahoo, Vice President of SME Insurance at Probus, and Mr. Faiz Askari, Founder-Editor of SMEStreet.
In this insightful conversation, we delve into the current landscape of SME insurance, the persistent barriers to adoption, and innovative strategies being deployed to build awareness and offer tailored solutions. Mr. Sahoo shares Probus’s unique approach and future vision, while Mr. Askari provides context on the importance of this segment for national economic stability. Read on to understand how collaborative efforts are shaping a more secure future for India’s SMEs.
The Interview:
Q1. Can you give us an overview of the SME insurance landscape in India—what is the current market size, and who are the key players dominating this space?
Mr. Santosh Sahoo: Small and medium enterprises (SMEs) are critical to India’s economy as they form a big part of the gross domestic product (GDP) and employ a large number of people. However, the penetration remains weak due to the lack of awareness, cost sensitivity, and limited access to customized solutions. Though there are no official figures regarding the penetration of SME insurance in India, a ballpark number could be around 5-10 percent of owners who have SME insurance in India. Some of the important products that are demanded by the SMEs are property insurance, liability insurance, workmen’s insurance, and group health insurance, among others.
Q2. Despite the increasing risks SMEs face, insurance penetration remains alarmingly low. What are the main barriers preventing SMEs from adopting insurance policies, and how can this be addressed?
Mr. Santosh Sahoo: Indeed, there are still several reasons why insurance uptake among SMEs in India is still somewhat low: lack of knowledge and understanding, financial concerns, perceived complexity, and administrative load. One can handle this issue in numerous ways. Policies must first become simpler. Digital revolution and government programs aiming at promoting insurance purchasing ought to get more importance. Furthermore, for the Indian SMEs, there should be economically priced and flexible educational programs and strategies. These steps can all significantly improve the financial stability and risk-reducing capability of SMEs, hence supporting India’s economic growth.
