Generali and UNDP Foster SME Resilience with Digital Risk Management Tool
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Launch of “Building MSME Resilience in Asia”
MALAYSIA – 18 March 2024 – Generali and the United Development Programme (UNDP) in collaboration with representatives from the Malaysian Ministry of Finance, Bank Negara Malaysia, the SME Association of Malaysia introduced SME Loss Prevention Framework, a digital tool designated to empower local entrepreneurs by increasing their preparedness and awareness of risks, starting with bolstering Malaysia’s Micro, Small, Medium-sized enterprises (MSMEs) against climate change by the power of data. Technical expertise and experience in the field from one of the biggest insurers of the world are at the disposal of local entrepreneurs as a contribution to the transition towards a more sustainable economy.
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 can 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.
The event built on the partnership between Generali and UNDP’s Insurance and Risk Finance Facility, designed to reduce the protection gap for vulnerable communities worldwide through access to insurance solutions. This work aligns to a broader commitment to raise awareness, as well as to set the path for insurance to unlock security, sustainability, and greater resilience for SMEs in developing countries.
Generali is also expanding its flagship SME EnterPRIZE project in Asia, building on the engagement carried out over the past three years with thousands of SMEs from across Europe to celebrate and nurture a culture of sustainability.
A joint research report titled “Building MSME Resilience in Southeast Asia” was launched, focusing on selected value chains in Thailand and Malaysia. The report proposes an alternative approach to identifying the risks and needs of micro, small and medium-sized enterprises (MSMEs), developing risk management and insurance services, and delivering these solutions to the MSME community.
MSMEs make up the majority of enterprises in Southeast Asia according to the new research, with figures as high as 99.6% in Thailand and 97.4% in Malaysia. They act as both a pillar and a driver of socio-economic development.
The report finds that SME growth and survival 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. Fewer than 5% of MSMEs in Southeast Asia have any form of insurance.
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.
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.”
Rob Leonardi, Regional Officer International – Asia, Generali, said: “MSMEs have long been a key driver of growth and innovation in Asia. Their contributions to the development of this region are indisputable, yet they are increasingly vulnerable to risks flowing from climate change, geopolitical tensions and market disruptions. Our partnership with UNDP recognises these challenges and is aimed at utilising insurance and risk finance solutions to increase coverage among MSMEs and boost their resilience. The various initiatives are all designed to meet businesses where they are in their journeys and ensure they have access to the solutions they need to thrive. I’m grateful for the hard work that has gone into this partnership so far, and I look forward to what more we can achieve together in the future.”
Niloy Banerjee, Resident Representative, UNDP Malaysia said: “With SMEs making up 48.2% of national employment and 38.4% of GDP, the crucial role they play in the economic ecosystem is beyond doubt. Yet they remain most vulnerable to shocks, whether from natural disasters exacerbated by climate change, pandemics or other disruptions to the manufacturing or logistics continuum. We must rapidly support the building of resilience and staying power of SMEs against all foreseeable risks through holistic and innovative instruments and solutions. Insurance would be one of the most significant safety nets for SMEs.”
Jan Kellett, Global and Corporate Lead on Insurance and Risk Finance, Head of the Insurance and Risk Finance Facility, UNDP, said: “In the ASEAN, where MSMEs make up 45% of regional GDP, their vulnerability to rapidly rising climate and other risks is not only a development challenge but an immense opportunity for public and private sectors to come to together and help businesses develop their capacity to understand and manage these risks.”
Fabrice Benard, Country Head, Generali Entitles in Malaysia, said: “SMEs are not just the backbone of our economy, but also a key inspiration and driving force to us at Generali. As their Lifetime Partner, we see the need to actively shape an ecosystem that could empower their growth and resilience, and foster a culture of innovation and sustainability in their businesses. I am confident that our collaboration and shared vision with UNDP is capable of unleashing greater value and opportunities to benefit the broader SME community in Malaysia.”
About UNDP:
UNDP is the leading United Nations organization fighting to end the injustice of poverty, inequality, and climate change. Working with our broad network of experts and partners in 170 countries, we help nations to build integrated, lasting solutions for people and planet.
UNDP’s Insurance and Risk Finance Facility (IRFF) is a flagship initiative housed within the organization’s Sustainable Finance Hub. It is currently working in 34 countries and will move to 50 countries by 2025. All of the IRFF work is aligned to the goals of the InsuResilience Vision 2025 which aims to cover 500 million people with insurance solutions in developing countries in the next three years.
About The Generali Group:
Generali is one of the largest global insurance and asset management providers. Established in 1831, it is present in over 50 countries in the world, with a total premium income of € 81.5 billion in 2022. With 82,000 employees serving 68 million customers, the Group has a leading position in Europe and a growing presence in Asia and Latin America.
At the heart of Generali’s strategy is its Lifetime Partner commitment to customers, achieved through innovative and personalised solutions, best-in-class customer experience and its digitalised global distribution capabilities. The Group has fully embedded sustainability into all strategic choices, to create value for all stakeholders while building a fairer and more resilient society.
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