Ease of doing business for MSMEs: Insurance penetration in the MSME sector is dismal as a number of enterprises see insurance adoption more as an expense. According to data and analytics company GlobalData, the general insurance industry in India grew by 5 per cent in 2021, its slowest growth during the last decade. The key reason for the poor adoption of insurance among businesses has been the lack of awareness, according to experts.
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However, for insurance companies, there isn’t much incentive in reaching out to MSMEs and selling insurance to them. “The premium collected from MSMEs is very very minimal,” said Sasikumar Adidamu, Chief Distribution Officer, Institutional Sales at Bajaj Allianz General Insurance. Talking to FE Aspire at SME Artha 2022 event, Sasikumar explained why insurance uptake among MSMEs is low, the challenges involved for insurance companies, and also the popular insurance types among MSMEs, etc.