Bid to have insurance for SMEs

Secretary-general Pravej Ongartsittigul said yesterday that the Office would set up a subcommittee to work with the Village Fund office to get more details about the borrowing habits of low-income villagers so as to design insurance plans appropriate for them.

There are 1.3 million members of 79,000 Village Funds across the country.

He said insurers should be proactive in offering programmes to cover accident and health protection to these people. If they are unable to repay their debts to the Village Fund, their insurance should cover that, he said.

The principle of this type of insurance is similar to the Bt200 micro-insurance policies distributed at 7-Eleven convenience stores, he said.

The premiums should depend on how much the policyholder borrowed from the Village Fund, but should not so high that they discourage people from buying the insurance.

Pravej said an insurance plan for members of Village Funds was expected by early next year.

Kanuangnij Sukitjornm, assistant secretary-general of the Office, said the SME sector should have insurance, but at present only 1 per cent of such businesses are insured.

The economic slowdown has affected the income of SMEs, so the Office has not seen any rising demand for insurance in this sector.

However, the government has placed great importance on this sector, reflected by its assistance measures such as soft loans. The new government-backed funding for SMEs will help spur the activities of these enterprises, and their businesses risks need protection, she said.

The Office will discuss this issue with the Office of SMEs Promotion.

The Office believes that at the very least, SMEs should have fire and industrial all risk (IAR) insurance protection, which the OIC plans to adjust the sum insured building of no more than Bt300 million for IAR to SMEs.

At present, small businesses are unable to buy IAR if their assets are not comply with Bt300 million of sum insured building.

Kanuangnij said that to encourage SMEs to buy IAR and fire insurance, the Office would talk with the Thai General Insurance Association on offering 30-per-cent discounts for SMEs that buy the second insurance from the key insurance plans – IAR or fire insurance.

The Office yesterday said the insurance industry’s total premium income for the first eight months was Bt478.78 billion, up by 3.67 per cent year on year. Life insurance brought in Bt343.135 billion, up by 4.42 per cent, and non-life insurance expanded by 1.84 per cent to Bt135.646 billion.

Pravej said the government’s recent stimulus measures for the real-estate sector would help drive demand for property insurance, adding that non-life premium income this year might grow faster than the Office’s target of 2.49 per cent.

This year, the Office has forecast that the insurance industry will expand by 4.73 per cent, from 2.49-per-cent growth in non-life segment and 5.6 per cent in life insurance.