Insurance plays an important role in the development of small and medium-sized enterprises, which contribute approximately 33% to Saudi Arabia’s gross domestic product, but at the same time, it faces challenges and obstacles that often lead to its stagnation, failure, and inability to sustain itself and compete, Therefore, experts in the field of entrepreneurship financing have emphasized that improving the managerial competence of SME officials and fostering a culture of risk management among them are important pillars for developing planning methods, formulating strategies, designing work approaches, and thereby achieving the sector’s goals.
Promoting a culture of risk management
In addition, a training course organized by Al-Taawuniya Insurance Company under the title «Insurance Fundamentals,» to establish and strengthen a culture of operational risk management and its relationship to the concept of insurance. The speakers emphasized that efficient resource management is an essential requirement for the continuity of projects and the protection of the economic cycle as a whole, especially since the small and medium-sized enterprise (SME) sector has become a key pillar of the government’s strategy to diversify the economy at this stage, which requires an increased contribution from non-oil sectors to local social and economic development.
For his part, Fawaz bin Muhammad Al-Khayyat, Director of the Kafala Program at the National Commercial Bank and one of the course participants, SMEs to view insurance as a developmental necessity for the business rather than a supplementary measure to obtain financing, noting the need for a genuine understanding of the importance of financing from an investment perspective to ensure the continuity of projects.
Pressures on Entrepreneurs
In the same context, Abdulaziz Al-Obaidi, Head of the Mortgages, Insurance, and Follow-up Department at the Kafala Program, spoke about the importance of the role played by entities supporting the small and medium-sized enterprise (SME) sector in promoting a culture of risk management and its relationship to the insurance sector among enterprises, saying, «»What we’ve explored and discussed in this session—information about insurance concepts and how to convey insurance knowledge to entrepreneurs who benefit from financing programs—will help reduce the pressures entrepreneurs face during the startup and operational phases and accelerate profitability without taking into account the decision to insure their businesses, which reduces and manages risks in a way that ensures the project’s continuity."
Insurance: A Partner and Supporter of Businesses
Regarding the role of insurance providers, Majid bin Ahmed Al-Bahiti, General Manager of Marketing at the Cooperative, emphasized his company’s role as a genuine partner and active contributor in supporting innovative mechanisms to bolster the economic development trajectory currently underway society, noting its role as an active partner in developing the small and medium-sized enterprise (SME) sector toward an environment that is more attractive to entrepreneurial ventures and where operational risks can be identified and managed. Al-Bahiti noted that Al-Taawuniya has designed insurance packages to meet the needs of various economic activities and support this category of enterprises to ensure the success of their businesses and guarantee their continuity despite risks and challenges.
Developing proposals for solutions
Speakers at the session emphasized the need to support the entrepreneurship sector by leveraging the course to enhance the knowledge of insurance fundamentals among financial advisors for small and medium-sized enterprise (SME) projects, and emphasized the importance of fostering a culture of business insurance, developing a clear vision and proposals to address the sector’s challenges, utilizing tools to assess business conditions, and presenting proposals for appropriate insurance coverage at a reasonable cost.
