ACCI, NAICOM partner to strengthen SME insurance

The Abuja Chamber of Commerce and Industry, through its National Policy Advocacy Centre, has partnered with the National Insurance Commission and key industry stakeholders to encourage small and medium enterprises in Nigeria to embrace insurance.

This was revealed on Tuesday during a high-level webinar titled ‘Can SMEs Still Afford the Risk of Not Insuring Their Businesses?’

In his opening remarks, ACCI Director-General Mr. Agabaidu Jideani emphasised the vulnerability of SMEs to risks such as natural disasters and financial crises.

“Businesses, irrespective of their size, are exposed to a myriad of risks, including natural disasters, financial crises, and other unforeseen challenges. Such disruptions can severely impact business operations and, in extreme cases, threaten their very survival,” he said.

Jideani noted that many SMEs in Nigeria fail to consider insurance a fundamental risk management strategy, leaving them highly vulnerable to economic shocks.

“Through this webinar, our objective is to bridge this knowledge gap by enlightening SMEs on the strategic significance of insurance, dispelling common myths, and offering practical guidance on selecting the most suitable insurance products,” he added.

The Chief Executive Officer of NAICOM, Mr. Olusegun Omosehin, represented by Aisha Bashir, Head of Microinsurance, highlighted the importance of insurance for business continuity.

“MSMEs are the backbone of any economy, including Nigeria’s. Despite their economic importance, MSMEs confront several obstacles that could jeopardise their long-term viability, including unanticipated hazards such as fires, theft, health emergencies, natural catastrophes, and even the death of key individuals,” she said.

She further stressed that insurance provides a safety net for SMEs, shielding them from risks that could result in loss of assets and income.

“Given these dangers, MSMEs must have systems in place to secure their operations and assets and assure business continuity,” she noted.

Speaking on regulatory efforts to improve access to insurance for SMEs, Bashir stated, “NAICOM is committed to ensuring that insurance becomes accessible, affordable, and understandable for MSMEs across the country.”

She added that the commission has introduced initiatives such as microinsurance and takaful guidelines to provide affordable and inclusive insurance products for small businesses.

Director of Gulf Insurance Brokers Limited, Francis Nzeh, emphasised the need for SMEs to leverage innovative insurance solutions.

“Insurance serves as a financial safety net that protects businesses and individuals against unforeseen risks. It provides coverage for various threats, ranging from data breaches and natural disasters to injuries and supply chain disruptions,” he said.

Nzeh outlined the benefits of insurance, including financial security, debt protection, tax benefits, and asset protection. He urged SMEs to explore different types of insurance policies tailored to their needs, including health, automobile, cyber, and public liability insurance.

The webinar emphasised that insurance is not just an expense but an essential tool for business growth and sustainability.

“In an increasingly uncertain world, where risks are more pronounced than ever, MSMEs must embrace insurance as a proactive strategy for safeguarding their business operations,” Bashir stated.

Jideani assured participants that recommendations from the webinar would be conveyed to relevant authorities to shape policies that foster business growth.

“The insights gained from today’s discussions will not only safeguard your businesses but also contribute to the broader economic stability of our nation,” he added.

Experts at the webinar noted that SMEs play a significant role in Nigeria’s economy, contributing about 48 per cent of the national GDP over the past five years. However, many SMEs struggle with insurance coverage due to high premiums, limited awareness of available insurance products, and other financial constraints.

Anchor of the webinar, Sunday Ugwu, highlighted the scale of the SME sector in Nigeria.

“Nigeria has approximately 41.5 million SMEs, making them a critical segment of the economy. Yet, they face various challenges, including inadequate access to information and technology, weak regulatory frameworks, a shortage of skilled personnel, and substandard business practices. The question remains whether a sector with such a vast number of businesses can afford to remain underinsured,” he said.

Head of Training Academy at AXA Mansard Insurance, Chidinma Gbemileke, called for stronger regulatory enforcement to ensure fair practices in the insurance sector. She emphasised the need for increased sensitisation campaigns leveraging digital platforms and community outreach to educate SMEs on insurance benefits.

A representative of Winock Insurance Brokers Ltd, Mr. Emmanuel Edorotu, urged SMEs to shift their perception of insurance from an optional expense to an essential investment. He stressed the importance of tailored solutions that address sector-specific risks and promote financial security.

The Executive Director of ACCI-NPAC, Dr. Chidiebere Onwumere, who organised the webinar, expressed gratitude to the leadership of ACCI for their continuous support. He also commended the speakers for providing insightful discussions on the importance of insurance for businesses.

Onwumere called for increased collaboration to create widespread awareness within the business community, encouraging SMEs to embrace insurance as a safeguard for their operations.