As part of the global agenda of insuring for sustainable development, the Impact Insurance Facility (www.impactinsurance.org) and the PSI Initiative (www.unepfi.org/psi) are organizing a webinar series with the theme, “Making inclusive insurance work”. The fourth webinar had the topic "SMEs and value chains" and was held on 16 March 2017. Speakers: Jeremy Gray (Cenfri) and Nick Smith (AXA). Moderator: Alice Merry (ILO's Impact Insurance Facility).

1. Making inclusive insurance work: SMEs

2. The UNEP-PSI and ILO webinar series
2
Making inclusive insurance work - A webinar series by the International
Labour Organization’s Impact Insurance Facility and UN Environment’s
Principles for Sustainable Insurance (PSI) Initiative
As part of the global agenda of insuring for sustainable development, the
Impact Insurance Facility (www.impactinsurance.org) and the PSI Initiative
(www.unepfi.org/psi) are organizing a six-part webinar series with the theme,
“Making inclusive insurance work”.
Today’s session will focus on insurance for SMEs

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3
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4. Making inclusive insurance work: SMEs
4
Presenter:
Nick Smith,
Global Head of SME,
AXA
Facilitator:
Alice Merry,
Research Analyst,
Impact Insurance Facility
4
Presenter:
Jeremy Gray,
Economic Researcher,
Cenfri

5. Small businesses vital to all economies
They face substantial risks which they struggle
to manage
Yet, they are generally underinsured or have
no insurance at all
Background
5

6. Potential insurance products
6
Risk Potential insurance covers
Fire and other property damage Fire insurance
Multi-risk property insurance
Windstorm and other natural perils Weather insurance
Theft and other crime, Theft insurance
Political violence insurance
Money insurance
Fidelity guarantee insurance
Personal injury Personal accident insurance
Workers compensation insurance
Business interruption Business interruption insurance
Disease and disability Health insurance
Permanent disability insurance
Liability claims Public liability insurance
Products liability insurance
Liquidity Trade credit insurance
Credit Credit-linked insurance

7. Potential insurance products
7
Hazard
risks
Financial
risks
Risk Potential insurance cover
Fire and other property
damage
Fire insurance
Multi-risk property insurance
Windstorm and other natural
perils
Weather insurance
Theft and other crime, Theft insurance
Political violence insurance
Money insurance
Fidelity guarantee insurance
Personal injury Personal accident insurance
Workers compensation insurance
Business interruption Business interruption insurance
Disease and disability Health insurance
Permanent disability insurance
Liability claims Public liability insurance
Products liability insurance
Liquidity Trade credit insurance
Credit Credit-linked insurance
Examples seen
in the study

8. Challenges and emerging good practices
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Product design
Distribution
Insurance culture

9. Which of these are most challenging for insurers
looking to serve small businesses?
• Product design
• Distribution
• Insurance culture
Audience poll 1
9

10. The symbiosis between
SMEs and insurers
10
Jeremy Gray, Economic Researcher
Cenfri

11. Insurance assists all MSMEs to be resilient
Insurance can enable MSMEs with growth
potential to take productive risks
In the longer term, insurers intermediate
capital
The insurance industry plays multiple
roles to assist MSME development
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12. All MSMEs need greater resilience,
but most risks are personal in nature
12
$175
25% of MSMEs
identified
illness in the
household as a
major risk
10% of MSMEs identified
experienced the death of
a main income earner in
the household 11% the
death of another
household member as
major risks
15% of MSMEs identified
drought, 12% harvest
failure and 7% flooding as
major risks experienced
8% of MSMEs
identified theft
or loss of
property as a
major risk
15% of MSMEs
identified
competition as
a major risk
Risks faced

13. Segmenting the MSMEs allows us to
better understand the differences
and different needs of MSMEs
13

14. Access to finance is identified across
developing countries as a barrier to
MSME growth. Insurers intermediate
long term capital
14

15. Growing business insurance is also a
key step in the development of the
industry
15

16. Insurers offers MSMEs greater resilience in the face of
shocks
Insurers enable some MSMEs to undertake risky,
profitable ventures, by protecting existing wealth and
assets, and protecting against default
A more developed insurance industry pools greater
sums of long-term capital for intermediation
As MSMEs grow, the nature, timing, and extent of
insurable risk exposures is likely to differ; creating a
business case for different insurance product offerings
Conclusion
16

17. Cenfri (The Centre for Financial Regulation & Inclusion) is a global think
tank that bridges the gap between insights and impact in the financial
sector.
We are driven by a vision of a world where all people live their financial
lives optimally to enhance welfare and grow the economy.
Our core focus is on generating insights that can inform policymakers,
market players and donors seeking to unlock development outcomes
through inclusive financial services and the financial sector more
broadly.
www.cenfri.org
Jeremy Gray: Jeremy@cenfri.org
17
Cenfri

18. AXA & SME
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Nick Smith, Global Head of SME
AXA

19. SMEs – Who are they?
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At AXA we consider an SME to be a company with less than 50 employees

20. Companies have very different
concerns depending on their size
and maturity
20
SME primary focus is on day to day business issues

21. Risks from Climate change are real
with SMEs demanding more help
21

22. At AXA we are putting our
customers at the centre of our SME
proposition
22
Becoming more aligned with SME business interests

23. We are developing new offers and
communicating more clearly
23

24. Becoming a Partner to SME through
services
24

25. But we are also human… or not!!
25

26. Challenges and emerging good practices
26
Product design
Distribution
Insurance culture

27. Consider small businesses’ existing risk-
management mechanisms
Cover multiple risks, even with limited cover.
Limit customization
Health is a priority for small businesses, and a
largely unaddressed business opportunity for
insurers
27
Product design

28. Consider existing mechanisms: aligned advertising with
the way in which clients connect business risks with
their families
Cover multiple risks: covers fire, earthquake, civil unrest,
natural disaster, robbery, cash in premises and transit,
electronic and mobile devices and breakdown of
machinery
Limit customization: standardized product with stages
for different sizes of businesses
Health: value-added services have proved particularly
attractive (help line and transport to hospital)
Case of Pacifico, Peru
28

29. 29
Financial
institutions
Buyers
Suppliers
Agent
networks
Government
Business
associations
Distribution
The most promising distribution channels:

30. Making inclusive insurance work: SMEs
30
Presenter:
Nick Smith,
Global Head of SME,
AXA
Facilitator:
Alice Merry,
Research Analyst,
Impact Insurance
Facility
30
Presenter:
Jeremy Gray,
Economic Researcher,
Cenfri

31. Making inclusive insurance work: SMEs
31
Presenter:
Nick Smith,
Global Head of SME,
AXA
Facilitator:
Alice Merry,
Research Analyst,
Impact Insurance
Facility
31
Presenter:
Jeremy Gray,
Economic Researcher,
Cenfri
Q&A

32. Our next webinars
32
Making inclusive insurance work - A webinar series by the International
Labour Organization’s Impact Insurance Facility and UN Environment’s
Principles for Sustainable Insurance (PSI) Initiative
The topics and schedule of the next webinars are as follows:
5. Agriculture and climate risks – 11 April 2017
6. Health – Part 2 – date TBA
7. Insurance regulation – date TBA