Regardless whether a an SME buys insurance or not, proper risk management processes are very important and proper processes and housekeeping are in the best interest of the SME owners and the long term success of their business.
Many SMEs do not realize how exposed they are to damaging claims that can not only affect their business’s reputation but also lead to business closure.
Despite some high profile events, such as the recent storm of March 2016 in the UAE, which temporarily raised awareness and interest in insurance, there is still a very significant portion of SME clients which remain uninsured and therefore vulnerable to increasingly volatile and damaging events that businesses face every day.
AIG SME Package solutions are tailored around the concerns of small businesses, helping them manage their risks, respond to unforeseen losses and thrive.
The AIG SME Package Value Proposition in centered around 5 core pillars:
- Efficient, Hassle – free Trading platforms.
- Customer focus/specialized product.
- Distribution expertise.
- Analytics & Science Expertise.
- Complete solutions for Small business.
Taking into account the large volume of number of SME insureds, portfolio analysis is a critical element of the business process as it allows to see developing trends in a number of fields, including very importantly, claims. Furthermore, based on the quality of the data that is available, the analysis can go to a very granular level which will in turn provide us with the necessary information to continuously enhance the AIG SME Package value proposition.
Through the insights derived from the analysis of the SME portfolio, the majority of the claims, both in intensity and frequency are found to occur in the Food & Beverage industry across all of their activities: from injuries to their employees while preparing food, handling cooking equipment or delivering food to customers, to potential food poisoning of customers all the way to destructive fire damages and the consequential loss of income that could follow. Damages to Retailer’s stock from water damages are also very prevalent, particularly when it isn’t placed on pallets / shelves above ground level.
The majority of claims are found to occur in the Food & Beverage industry across all activities – from injuries while preparing, handling, delivering and potential food poisoning all the way to destructive fire damages and the consequential loss of income that could follow.
The type of claim most likely to cause the greatest impact to the business is by far Fires occurring in Restaurants.
Aside from the direct damage to the restaurant’s own premises, fire can easily spread to neighboring premises adding substantial liabilities to the SME owner for damage to neighboring businesses, as well to his landlord’s property, in the event (as is usually the case in the UAE) the restaurant is leasing the premises from which it is operating.
The most common cause of fire in restaurants lies in the failure to properly and regularly clean the extraction ducts in the kitchen, allowing for the build of grease.
While zero risk of course doesn’t exist, it is possible through some specific actions to substantially minimize the risk of grease build-up catching fire due to exposure to the heat for the cooking equipment, or, in the event that a fire does take place, to mitigate the spread and damage that this fire could cause.
For example, implementing the following “common sense” processes around the kitchen will greatly aid in minimizing the potential risk of fire and its spread.
- all cooking equipment to be installed operated and maintained in accordance with manufacturers’ instructions
- flues and exhaust ducting to be securely fixed and free from contact with combustible materials
- all deep frying equipment to be supplied with a metal lid and fitted with a thermostat set to prevent the temperature of fat or oil from exceeding 205 degrees Celsius
- cooking equipment not to be left unattended when on a source of heat or when switched on (whether or not in use)
- Fire rated fire extinguishers and fire blankets to be kept available
- All extraction hoods, canopies, grease traps, filters to be cleaned daily, in case of heavy use
- Ductwork to be cleaned at the very least every month, in case of heavy use
Regardless whether a restaurant buys insurance or not, proper risk management processes are very important and proper processes and housekeeping are in the best interest of the SME owners and the long term success of their business.
Having clauses & conditions to that effect in insurance policies is not meant to be a dissuasion to insurance, but on the contrary they aim to help highlight areas of improvement and risk mitigation in our commitment to be our clients’ most valued insurer.
AIG’s SME portfolio currently consists of 6,500 active SME insurance policies in the UAE which is a result of extensive customer focus and excellent service. AIG’s customer focused attitude has been recognized in 2016 by awarding AIG the award of MENA SME Insurer of the Year.
AIG SME Package Solutions will continue to invest in innovative products, customized solutions and portfolio analysis to identify further trends and even more comprehensive packages.