Crowd Sense Sdn Bhd (CSSB), a peer-to-peer (P2P) operator licensed by the Securities Commission Malaysia operating under the Cofundr platform today launched its latest people-centric campaign called KITACOVER (translated as WECOVER), during the MyFintech Week organized by Bank Negara Malaysia (the Central Bank of Malaysia).
Targeting small and medium enterprises (SMEs), the CSR campaign was fittingly launched as a two-pronged approach. Firstly, it is to educate and create awareness about the importance of insurance coverage to uninsured SMEs by providing complimentary advisory services to business owners. The advisory services will be provided by Cofundr’s panel of professional insurance intermediaries made up of experienced insurance agents and brokers who are well versed, adept, and conversant of the SME segment, including issues relating to natural disasters.
The second approach is for Cofundr to crowd finance the relevant insurance premiums due and payable to the insurer first to make sure that the insurance coverage is in place. This means that SME business owners have the flexibility of making monthly payments for their premiums instead of having to make the lump sum payment upfront to help ease their cash flow. And to further aid with affordability, Cofundr will ‘cover’ (fully subsidize) the insurance premium financing costs applicable for any uninsured SMEs that are getting insurance for the first time through the campaign.
According to Ahmad Kamal S. Awab, Director of Cofundr, “The spirit of the KITACOVER campaign is quite straightforward. We acknowledge that SMEs are integral to the growth of the Malaysian economy and its people. Globally, SMEs account for the majority of businesses worldwide and are important contributors to job creation and economic development. They represent about 90% of businesses and more than 50% of employment worldwide. As stated in the SME Annual Report released by SME Corp Malaysia, SMEs contributed a whopping RM553.5 billion to the GDP in 2019. However, the uptake on insurance in SMEs when it comes to natural disasters such as flooding is still a vital concern”.
He further affirmed, “According to data released by AIG Malaysia Insurance Berhad, only 15% of insured policyholders have purchased the flood cover. This means that more than 80% of SMEs have no coverage against flood peril, denoting the lack of comprehension of the urgency of the risk and consequences to the overall running of their business. Furthermore, for those that are insured, a majority of them are underinsured. Given the perceivably high-level exposure to multiple risks, insurance is undeniably one of the most crucial risk transfer tools that can make an important contribution to financial management and reduce the share of losses absorbed by businesses and governments. The recent catastrophe that hit us should send a clear message to SMEs across the country to be more proactive and to look into insurance coverage as it is the only defense we have to mitigate the financial impact from any untoward incidents.
Sean Khoo, Communications Director at Cofundr and Project Manager of the KITACOVER campaign said, “At Cofundr, the focus is to promote financial inclusivity for SMEs by enhancing access to fundraising and providing consistent innovative solutions especially at times like this. Flooding has happened before but still each time, SMEs suffered tremendous loss and have no way to be compensated because they are uninsured.
While drawing up the campaign, the team has narrowed down the two main reasons why the situation has not changed over the years. The first is about affordability. When faced with cash flow constraints, SMEs will delay, reduced, and in some cases even forgo their insurance coverage. This is simply because insurance is a non-income generating expense, plus you need to make the full premium paid upfront. As a result of this, most SMEs would rather assume the risks themselves until tragedy strikes and they end up not only losing everything but may even be laden with debt.
The second reason is that there’s a lack of awareness about insurance. SMEs are not aware of the type of coverage that’s available to them to protect their business assets. In such a situation, where do they go to get the right advice and to educate themselves about insurance? Knowing all this, we feel that Cofundr could step in and leverage its fintech solutions to assist SMEs to solve these problems. We hope that SMEs out there would support the campaign and get themselves covered against any unwanted risks”.
Malaysian SMEs may register their interest to receive insurance advisory services at www.kitacover.com