A fourth generation insurance entrepreneur and commanding vast knowledge on various aspects of insurance, Prabodh Thakkar is the Chairman of Aon Global Insurance Brokers Pvt Ltd. He served as President of Indian Merchants’ Chamber and is also the member of the managing commitee of Indo American Chamber of Commerce, Mumbai. Here are the edited excerpts of his conversation with SMEpost.com.
Q: The NDA government has identified the SME sector as a key growth driver of the economy. How do you see the potential of the sector?
A: This sector has huge potential. The slew of initiatives which the government has brought forth will unlease the potential of this sector. Recent initiatives of cluster development will bring in forward and backward linkages as well as optimum utilization of resources by the SME entrepreneurs. Further, allocation of Rs 1139 crs for PMEGP etc is going to help over 50 thousand units with their margin money. The government is creating business-friendly ecosystem and SME sector is going to be the greatest beneficiary.
Q: Knowledge and implementation of best business practices is a challenge for the sector. How, in your opinion, can one mitigate it?
A: I see initiative of cluster development as one of the tools for sharing best practices among the players, apart from economic gains. Further, Skill Development programme will bring in a knowledgeable workforce to this sector. Earlier, it was more of a on the job training, to each-his-own approach. Now, it is getting instutionalised and we can expect appreciation of value system by the workforce as it happens in the corporate world. There would be better movement of skilled workforce among the SME sector there-by taking the best practices from one place to another.
Q: Insurance is currently not a top priority at SMEs given multitude of strains faced by these companies. Is there any study on how many, out of the estimated 5 crore plus SMEs, in India are actually insured?
A: Who would know it better than us (laughs). We understand the multiple issues faced by this sector. With great difficulty an entrepreneur builds a dream and he should take all care to protect his/her dream. Insurance is one of the major tools for doing this. I would not only blame the SME sector for this low priority on insurance. All the stakeholders of the insurance industry, be it Brokers, Insurance Companies, Agents etc are to be held responsible for this low awareness on the importance of insurance.
There are some generic studies on insurance of SME sector but, unfortunately, none so specific. It is a very good suggestion, though.
Q: Is there any study available that highlights the importance of insurance in mitigating business risks for SMEs in India?
A: There are tons of materials available on insurance as a tool for risk mitigation. The studies primarily are centric towards large corporates, but it can be mirrored for SME as well to a large extent. At Global, we are making that effort. We have collated coverages keeping the need of this sector.
Q: What is the Aon Global Insurance Broker’s experience in building insurance as a key component of the business plan at SMEs?
A: We have always appreciated the importance of this sector and wanted to replicate our expertise of serving big corporates to this sector. We have done it now by creating SME vertical within the company, with an estimated team of around 25 experienced people. As I said earlier, we have packaged sixteen risks in a Single Policy, befitting the need of this sector. Further, we have setup a three layered claims facility for better coordination on happening of a claim. In nut shell, we are proposing an exclusive facility for this sector encompassing best of product, price and service.
Q: Would your company like to share successful case studies of small and medium enterprises that have brought insurance and thus gained?
A: Sure. In fact, we would request SMEpost to help us in propagating success stories. You all are doing a good job on knowledge sharing.
Q: Given the pressure on costs, how does Global propose to make insurance a far more attractive proposition for small and medium enterprises?
A: Cost is a prime consideration for all of us. And at Global we respect that sentiment. Nonetheless, we impress upon the customers to look at the terms of coverages vis a vis cost. We have brought in insurance partners with us who are supporting us with very competitive pricing. This initiative is being rolled out in Maharashtra first and within a few months will be rolled for the entire country through our 11 branches.
Q: Apart from cost perspective, there is also the issue of lack of proper education in regard to importance of insurance. Does the industry generally, and Global in particular, propose to mount a campaign in this regard?
A: In our interaction with insurers, we impress upon them for spreading insurance awareness in SME sector and few of them are coming forward. On our part, we participate in different seminars, conferences and travel to different locations to meet industry leaders. Very soon we are going to make small videos on the importance of insurance. We will use social media extensively for this.
Q: To build the right ecosystem, what kind of collaborations would you prescribe for improving insurance density among SMEs?
A: I see it as an era of collaboration. Best people in the job should collaborate for better output. We are in talks with various service providers in the field of loan, legal, market place creators, content writers etc for a grand alliance so that the SME entrepreneur gets the best at the click of a button.
Q: What is your outlook on leveraging digital media to educate SMEs on the benefits of having insurance cover?
A: Digital is the future. Our intention is to use digital media for increasing awareness among SME entrepreneurs. I would invite your suggestions on that, as you all are doing a fabulous job in this area.
