Generali and UNDP launch various initiatives to boost resilience in Asia

In efforts to help boost small and medium-sized enterprises (SMEs) resilience against climate change and other risks in Asia, Generali and United Nations Development Programme (UNDP) have launched a joint report detailing key risks and alternative approaches to insurance.

The report titled “Building MSME Resilience in Southeast Asia” found that SME growth and survival in the region are threatened by a range of risks, including climate change, business interruptions, and limited access to capital markets.

These risks are intensified by the lack of risk management, coping mechanisms, and insurance coverage, as fewer than 5% of MSMEs in Southeast Asia have any form of insurance.

The research – presented in an event attended by Malaysian Ministry of Finance, Bank Negara Malaysia, the SME Association of Malaysia and the insurance and financial communities – focuses on selected value chains in Thailand and Malaysia, where micro, small and medium-sized enterprises (MSMEs) make up the majority of enterprises, 99.6% and 97.4% respectively.

Analysts propose an alternative approach to identifying the risks and needs of these MSMEs – which acts as a pillar and a driver of socio-economic development – developing risk management and insurance services, and delivering these solutions to the MSME community.

Generali said: “The alternative approach outlined in the research starts by segmenting MSMEs to understand their risk profiles and address their specific needs, exploring priority value chains including natural rubber, food and accommodation, wholesale and retail, and electrical and electronics.

“From this MSMEs can build resilience through holistic solutions that consider both risk transfer and risk mitigation tools, and which include bundling insurance solutions with new technologies or digital platforms and leveraging alternative distribution partners to reach MSMEs more effectively.”

According to Generali, the research complements its SME EnterPRIZE White Paper developed in the framework of Generali’s flagship initiative to boost a culture of sustainability among SMEs.

Generali has been carrying out this project over the past three years with thousands of SMEs from across Europe to celebrate and nurture a culture of sustainability, and it has also announced it is expanding it in Asia.

Generali and UNDP have also presented their SME Loss Prevention Framework, a digital tool leveraging the power of data to raise the readiness and awareness of SMEs to the risks facing vulnerable communities, starting in Malaysia with the flood risk.

Hosted on a user-friendly online platform, this framework will also be developed as a mobile app and can be spread to other countries in Asia and in the world.

SMEs will be able to find advice on how to protect their activities in the face of climate challenges and other risks, while ensuring the resilience of such an important segment for developing countries also against unpredictable events like natural catastrophes.

Following the launch of the “Insurance Innovation Challenge Fund” in September last year, which aims to incentivise the development of innovative insurance products and services in Malaysia, the event also showcased four innovative solutions for insurance to enhance SME resilience against climate and other risks.

In the upcoming months, finalists will be announced, of which two winners will be awarded up to US $40,000 each, along with technical assistance to support the development of their ideas and the opportunity to leverage Generali and UNDP’s global presence.

Jaime Anchústegui Melgarejo, CEO International of Generali, said: “The MSME community in Malaysia, Thailand and the broader Asia region are an indispensable part of the growth and development stories of these markets. However, they face very real and intensifying risks from climate change and other factors that are affecting business continuity and their ability to capture emerging opportunities.

“Insurance is at the heart of the solution for making SMEs and MSMEs more resilient and is the driving force behind Generali’s partnership with UNDP. Bringing SME EnterPRIZE to Asia, launching our SME Loss Prevention Framework and progressing our Insurance Innovation Challenge Fund are key milestones in our effort to support vulnerable businesses in Asia. I’m eager to continue our collaboration with UNDP and find new ways to make a lasting impact.”

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