SMEs Indonesia Still 'Blind' Insurance

Tutorials 1927 -level insurance penetration in the Small and Medium Enterprises (SMEs) is still low and many insurance products are not tailored to the needs of the SME segment. Recognition and understanding of insurance needs to be improved to mitigate risks in the field of SMEs.

Based on data from the Ministry of Cooperatives and SMEs in 2012, SMEs in Indonesia has long been a driving wheel of economic growth.

SMEs, amounting to only about 1.2% of the number of companies that exist in Indonesia, was able to absorb a workforce of approximately 7% of the total workforce and contributes 22% to the Gross Domestic Product (GDP).

However, on the other hand, SMEs also face great challenges and risks, which is now Indonesia ranks number 120 on the ease of doing business globally.

President Director and CEO of PT Zurich Insurance Indonesia Brian J Berry said, SMEs often ignore protection against risks that can be insured.

The level of insurance penetration in SMEs is still low and many products are not tailored to the needs of the growing SME segment.

"Competition is getting more and more stringent and many SMEs faced," he said when launching of Zurich Business Insurance Products Guard, at the World Trade Center, Jakarta, Wednesday (18/03/2015).

Therefore, Brian said, it launches insurance products of Zurich Business Guard to provide comprehensive protection solutions in a format that is simple, easy to understand and with affordable premiums.

According to him, many companies stopped on medium enterprises and have difficulties to be able to develop into a big business, one of the inhibitors is the lack of ability to manage non-business risks.

In the same place, Director of SME Center, Faculty of Economics and Business, University of Indonesia Eugenia Mardanugraha revealed, insurance protection can minimize non-business risk management, this would require the support of the insurance company to provide products that can address the needs of SMEs without forgetting the educational process and socialization of the importance of insurance.

"It takes cooperation among industry, actors, and academic," he said.

Head of Small Business Segment Zurich Insurance Indonesia The Kim Tjiang added, Zurich Business Guard is designed to provide protection against business assets such as buildings, building contents, and supplies from a variety of unexpected events such as fires, natural disasters, floods, theft, and so forth.

"Other benefits include business continuity and temporary living accommodations provided in the form of daily compensation, deterioration or damage to inventory, machinery breakdown, money in safe and in delivery, and various other benefits with 3 to 61 species in total benefits and expansion," explains him.

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