New: Generali and UNDP are building SME resilience in Asia
Kuala Lumpur – Generali and the United Nations Development Programme (UNDP) brought together
representatives from the Malaysian Ministry of Finance, Bank Negara Malaysia, the SME Association of
Malaysia and the insurance and financial communities to present concrete solutions on how to boost SME resilience against climate change and other risks.
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.
SME Resilience
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.
The research complements the SME EnterPRIZE White Paper developed in the framework of Generali’s
flagship initiative to boost a culture of sustainability among SMEs.
Generali and UNDP have also presented their SME Loss Prevention Framework, a digital tool leveraging
the power of data to raise the readiness and awareness of SMEs to the risks facing vulnerable communities,
starting in Malaysia with the flood risk. 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.
Following the launch of the “Insurance Innovation Challenge Fund” in September last year, which aims to
incentivise the development of innovative insurance products and services in Malaysia, the event also
showcased four innovative solutions for insurance to enhance SME resilience against climate and other
risks.
Awards for winners
In the upcoming months, finalists will be announced, of which two winners will be awarded up to US $40,000
each, along with technical assistance to support the development of their ideas and the opportunity to
leverage Generali and UNDP’s global presence.
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.”
SMEs vulnerability
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.”
The broader Generali-UNDP partnership
Generali and the United Nations Development Programme have partnered to support developing countries with access to insurance and risk finance solutions that enhance the resilience of communities and local businesses.
Under this multi-year partnership, Generali has committed technical and financial resources to UNDP’s Insurance and Risk Finance Facility (IRFF) in order to increase the socioeconomic well being of some of the world’s most vulnerable people and places. The partnership blends Generali’s insurance expertise with UNDP’s long-term focus on financing and development.
Moreover, through the partnership, Generali and UNDP are contributing towards the InsuResilience Vision 2025, which includes: reaching 500 million vulnerable people and covering them against climate and disaster shocks; protecting 150 million vulnerable people through microinsurance solutions; and putting insurance innovation at the heart of the UN’s Sustainable Development Goals and 2030 Agenda.
Generali, as a responsible corporate citizen, is strongly committed to public-private partnerships and to supporting through its expertise public bodies to reach their objectives. This includes calls to both policymakers and businesses. The former are encouraged to engage with SMEs in a targeted way, with policies to direct investments toward appropriate products and services that support more agile business operations, while SMEs are invited to invest in their own adaptability to ensure business continuity and profitability in a changing climate.