Cofundr launches KitaCover campaign for uninsured SMEs

The firm will fully subsidise the insurance premium financing costs for any uninsured SMEs who enrol in the campaign for the first time 

by NURUL SUHAIDI / Pic credit: kitacover.com

COFUNDR yesterday launched its latest people-centric campaign called KitaCover, offering coverage plans and complimentary insurance advisory services for the small and medium enterprise (SME) communities. 

Adopting two primary approaches, the campaign was launched as part of Cofundr’s corporate social responsibility to better educate the SMEs on the need for insurance coverage and crowd financing. 

Through the campaign, Cofundr will also crowd-finance the relevant insurance premiums due and payable to the insurer to make sure that the insurance coverage is in place. 

This allows SMEs to make monthly premium payments rather than a lump sum payment upfront, allowing them to better manage their cashflow. 

To further aid with affordability, Cofundr will fully subsidise the insurance premium financing costs for any uninsured SMEs who enrol in the campaign for the first time. 

The advisory services will be provided by Cofundr’s panel of professional insurance intermediaries made up of agents and brokers who are well versed in the SME segment, including issues relating to natural disasters. 

Cofundr director Ahmad Kamal S Awab said 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,” he said. 

According to him, SMEs make up the largest business contributor worldwide in terms of economic and job creation as they represent about 90% of business and 50% of employment opportunities worldwide. 

Based on the SME Annual Report released by SME Corp Malaysia, SMEs contributed approximately RM553.5 billion to the GDP in 2019. 

However, when it comes to natural calamities like flooding, the insurance uptake is still worrying. 

He further affirmed that based on AIG Malaysia Insurance Bhd’s data, only 15% of insured policyholders have flood coverage. 

“This means that more than 80% of SMEs have no flood insurance, indicating a lack of understanding of the risk and its implications for the whole operation of their business. 

“Insurance is a critical risk transfer tool that can positively impact financial management and reduce the losses absorbed by business and governments,” Ahmad Kamal said. 

He added that the recent flood catastrophe should send a clear message to SMEs nationwide to be more proactive and to look into insurance coverage as it is the only defence against financial distress. 

Meanwhile, Cofundr communications director and KitaCover project manager Sean Khoo said Cofundr’s focus is to promote financial inclusivity for SMEs by enhancing access to fundraising and providing consistent innovative solutions. 

“Flooding has happened before but still, each time SMEs suffered tremendous loss and have no way to be compensated because they are uninsured,” he said. 

He added that when faced with cashflow constraints, SMEs will delay, reduce 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 payment upfront. 

“As a result, 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,” he said. 

When it comes to awareness, Khoo said SMEs are not aware of the type of coverage that could protect their business assets and in such a situation, they must seek professional advice. 

“Realising this, we feel that Cofundr could step in and leverage on its fintech solutions to assist SMEs to solve these problems. 

“We hope SMEs would support the campaign and get themselves covered against any unwanted risks,” he added. 

SMEs may receive insurance advisory services at www.kitacover.com and an expert will follow up with the best insurance for them.