Cofundr’s KITACOVER Highlights the Importance of SME Insurance
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Cofundr recently introduced KITACOVER, its latest people-centric initiative, with coverage plans and complimentary insurance advising services for small and medium-sized businesses (SMEs).
What is KITACOVER?
The KITACOVER campaign was developed as part of Cofundr's corporate social responsibility to further educate SMEs on the importance of insurance coverage and crowdfunding.
Cofundr will also crowdfund the applicable insurance premiums due and payable to the insurer as part of the campaign, ensuring that the insurance coverage is in place.
It will allow SMEs to pay premiums monthly rather than in one single sum, helping them manage their cash flow better.
Cofundr will cover the entire cost of insurance premium financing for any uninsured SMEs who sign up for the first time to make the campaign more affordable.
Cofundr's panel of expert insurance intermediaries made up of agents and brokers well-versed in the SME market especially concerns connected to natural catastrophes, will provide the advising services.
Over 80% of SMEs don't have flood insurance
According to Cofundr's director Ahmad Kamal S Awab, the spirit of the KitaCover campaign is simple. He stated that Cofundr recognises that SMEs are critical to the economic and social development of Malaysia.
According to him, SMEs are the world's top economic and job development contributors, accounting for around 90% of all businesses and 50% of all job possibilities.
Based on SME Corp Malaysia's SME Annual Report, SMEs contributed RM553.5 billion to the country's GDP in 2019.
However, insurance uptake remains low when it comes to natural disasters such as flooding.
He also confirmed that, according to data from AIG Malaysia Insurance Bhd, only 15% of insured clients have flood coverage.
It indicates that over 80% of SMEs do not carry flood insurance, demonstrating a lack of knowledge of the risk and its ramifications for their entire operation.
Ahmad Kamal said insurance is a vital risk transfer tool that can positively impact financial management and reduce losses incurred by businesses and governments.
He went on to say that the recent flood disaster should send a clear message to SMEs around the country to be more proactive and look into insurance coverage, as it is the only way to protect themselves from financial ruin.
Educating SMEs on insurance
Meanwhile, Sean Khoo, Cofundr's communications director, and KitaCover project manager, stated that Cofundr's goal is to increase financial inclusion for SMEs by improving access to fundraising and delivering consistent and creative solutions.
He said that flooding has occurred in the past, but SMEs have incurred significant losses and have no way of being paid because they are uninsured.
According to him, when faced with cash flow difficulties, SMEs will postpone, cut, or even forego insurance coverage. It is because insurance is a non-income generating item, and the SME must pay the entire premium upfront.
As a result, most SMEs would prefer to take on the risks themselves until disaster strikes, and they wind up losing everything and possibly being in debt.
When it comes to awareness, Khoo believes that SMEs are unaware of the types of coverage that can protect their business assets and that they should seek professional guidance in this circumstance.
Aware of this, Khoo believes Cofundr will step in and use its fintech solutions to help SMEs tackle these issues. Furthermore, he hopes that SMEs would embrace the initiative and take steps to protect themselves from unwelcome dangers.
At www.kitacover.com, SMEs can receive insurance consultation services, and an expert will follow up with the best insurance for them.
Source: The Malaysian Reserve