IIG News

IIG Insights -Resilient SMEs and the insurance solutions they need

To wrap up the CPD cycle of 2021/2022, the IIG partnered with Discovery for another impactful thought leadership Insights session on 19 May 2022. The session started with a warm welcome from the IIG President Thabo Twalo. He introduced the topic, “Resilient SMEs and the insurance solutions they need”. SMEs are the lifeline of any economy – Not only are they a big employer but they are also a hotbed for innovation. Being the lifeline of the economy, they have faced some challenges recently

In his intro, Thabo mentioned that the pandemic has added to these challenges, with many businesses having to close their doors. This sector has however shown great resilience and the ability to adapt and find new ways of surviving. “In order to become more sustainable, SMEs require insurance solutions that include access to business support like funding, business coaching, cyber security and legal advice. They also need access to risk management tools to help them understand and better manage their risks so they can improve their business prospects”.

To discuss the topic in detail was Daniel Singer, Head of Vitality Drive for Business and Business Rewards at Discovery Insure. Daniel holds a BSc Honours in Actuarial Science from the university of the Witwatersrand. He worked in the life insurance space briefly and then moved to short-term insurance. He also worked in the life insurance space briefly and then moved to short-term insurance.

To kickstart his presentation, Daniel thanked the IIG for the opportunity to partner in the Insights session and then highlighted the 3 points to cover throughout his presentation:

  1. How SMEs have shown resilience
  2. Insurance solutions to improve business sustainability
  3. The role of intermediaries in bringing solutions to SMEs

Daniel started by sharing stats from a Mckinsey article that gives an overview of how SMEs make up the South African economy:

  • SMEs represent 98% of businesses in the country
  • They employ between 50% and 60% of the country’s workforce
  • They are responsible for 25% of job growth in the private sector

Although their contribution to total turnover in the formal business sector has increased over the years, SMEs have faced many challenges. One of the challenges being the COVID-19 pandemic leading to a drastic drop in customer demand due to lockdown restrictions and reduced financial income.

A Mckinsey survey conducted at the end of March 2020 found that more that 80% of customers were looking at reducing spending across all retail categories. Daniel mentioned that businesses were also pessimistic about the future, with approximately 35% of businesses sassing they had a negative sentiment about the economy and economic conditions.

Despite these challenges, SMEs have shown great resilience during the pandemic and shown strength and found ways to survive during the challenging period. Some innovation to survive included:

  • Online shopping/ platforms to offer their products
  • Shadow kitchens through third party mobile platforms such as Uber Eats, Mr D, OrderIn and Bolt Food

Insurance solutions to improve business sustainability and the role of intermediaries in bringing solutions

To end off his presentation, Daniel spoke about the insurance solutions/ products to help businesses succeed and protected against risks. These include cover for traditional risks through the standard insurance offering such as (1) Property and Accident (2) Liability (3) Motor. Over and above these risks, businesses require cover for newly emerging risks. These include pandemics, cyber risks, systematic risks, professional failure, climate change, etc.

Daniel then elaborated on the different types of risks and the cover insurers can provide for these risks.  And how Intermediaries play an important role in helping clients choose an insurance solution for their needs as they understand their client’s needs and are able to help clients choose the right cover required.

The session ended with Daniel sharing some innovative tools, products, and solutions offered by Discovery in identifying and addressing new emerging risks that businesses face. He also answered questions raised by attendees.

The IIG thanks Discovery for sponsoring this session and for an insightful presentation. The full recording of the webinar as well as presentation slides are available on the IIG CPD Vault by visiting the IIG website on https://iig.co.za.

The next insights is on 09 June 2022.


Article by: Tebogo Raphathelo

Reinsurance Broker, Gallagher Re

IIG Education Councillor