Image
Icon

Directory

IconAppraisers and Valuers
IconAssociations and Institutes
IconBBBEE Consulting and Verification Agencies
IconConsumer Protection
IconCorporate Governance
IconCredit Bureaus
IconDefensive Driver Training
IconEmergency Medical Rescue
IconInsurance Brokers - Alphabetical Listing
IconInsurance Brokers by Type of Product or Service Needed
IconInsurance Companies
IconInsurance Consultants
IconLightning Damage & Surge Protection Specialists
IconOmbud
IconOnline Quotes and Cover
IconPremium Financing
IconPublic Loss Adjustors
IconPublications
IconRating Agencies
IconRegulatory Authorities
IconRisk Finance
IconRisk Management
IconRisk Surveyors
IconSalvage Operators
IconTelephone Quotes
IconVehicle Accident Management
IconVehicle and Household Risk Inspection Services
IconVehicle Tracking
IconWellness Programs
Image
  Subscribe To »

Small business survival depends on managing risks

Published

2012

Thu

31

May

From globalisation, increased competition and crime, through legislation with its red tape, bureaucratic hurdles and compliance costs, to lack of credit or incentive, the risks that SME’s face in South Africa’s unwelcoming small business environment are legion.

 

Yet despite the hurdles facing small businesses in South Africa, “many SME’s fail to mitigate risk with intelligent risk solutions” says Hillary Magede, Senior Manager, Alexander Forbes Insurance.

 

Despite an unsupported SME environment overburdened with tax, compliance, crime and labour issues, combined with spiralling input costs in a shrinking retail environment, Magede is surprised that more small businesses haven’t started using targeted risk mitigation strategies to reduce the uncertainty of unforeseen mishap that so often destroys businesses.

 

Certainly, given the competitive edge that properly structured and priced business insurance can bring to a small business “I’m always surprised to find that it is usually the last thing on most South African small business owner’s minds” adds Magede.  

 

As such, when looking to develop an insurance package for small businesses Magede and his team focused research on the assets, earnings and legal liabilities that real small businesses face in South Africa. 

 

The results of this research highlighted the following risks as key to the success or failure of South African SME’s:

 

·         Damage or destruction to property such as; buildings and contents, including stock, plant and machinery, electronic equipment, money, glass and documents (on the premises or in transit).

·         Loss of profits or revenue (and continuing fixed expenses) suffered due to the interruption of small business operations while damaged or stolen property is repaired or replaced.

·         Loss or damage to property from theft or criminal activity, either by employees or others.

·         Legal costs or liability arising from accidental damages, loss or injury to any persons (including employees) or property.

·         Loss, damage or liability arising from motor vehicles – requiring either third party only, third party, fire and theft or comprehensive depending on the risk.

·         Unaffordable excesses. Motor excess stated as a percentage of loss means the cost to customer is only determined after the accident. As such, large losses result in higher excesses. Stating motor excesses as flat Rand amounts means the business always knows what it will have to pay.

·         Disability or accidental death, and associated medical expenses, of key personnel - either in the workplace or elsewhere, like travelling to and from work.

·         Providing severance packages or having to reorganise business or reduce staff due to adverse business conditions, the introduction of new technology, or in response to changes in the Labour Relations Act.

·         Legal Costs and witness attendance expenses for legal actions instituted by or against the business.  

 

Developing risk management solutions for the South African SME market – which, given other pressures, does not have the time to negotiate tailored cover at acceptable rates - meant that “simplicity, clarity, affordability and ease of use had to remain central” said Magede. 

 

While accomplishing this for the vast range for SME’s in South Africa was a challenge, Magede and his team are now confident that they are offering a fresh, user-friendly tool that will reduce the risk and currently high failure rate of small businesses in South Africa.

 
Source: FTI Consulting
 
« Back to previous page Print this page » |
 

Breaking News »

Is Your Wedding Ring Covered?

            Mandy Barrett, Aon South Africa                     How to ...
Read More »

  

SA aims to increase African trade by half a trillion by 2019

Cape Town: International Relations and Cooperation Minister Maite Nkoana Mashabane says South Africa is aiming to boost trade with African states by half a trillion rand before the end of the current administration ...
Read More »

  

237 fatalities on SA roads in five days

Pretoria: A total of 237 people died on South Africa’s roads from 29 April to 2 May. Speaking in Pretoria on Tuesday, Transport Minister Dipuo Peters said 179 fatal collisions were experienced on the ...
Read More »

  

Bowman Gilfillan Africa Group continues to grow with the appointment of three new partners in South Africa

Johannesburg: Leading Pan-African law firm, Bowman Gilfillan Africa Group, has welcomed three new partners to its expanding teams in South Africa. Bonnie Steyn has been appointed as a partner in the firm’s ...
Read More »

 

More News »

Image

Healthcare »

Image

Investment »

Image

Life »

Image

Retirement »

Image
Image
Image
Image
Image
Image
Image
Image
Image
Advertise Here

From The Glossary »

Icon

Aggregate Excess Of:

A form of excess of loss reinsurance which indemnifies the loss reinsurance ceding company against the amount by which its losses incurred during a specific period (usually 12 months) exceed either: _ a predetermined amount expressed in monetary terms, or _ a percentage of its subject premiums for the specific period.
More Definitions »

 
 
By using this website you agree to the Terms of Use.
Copyright © Stoker Risk & ICT (Pty) Ltd 2004 - 2016.
All Rights Reserved.
Icon

Advertise

  Icon

eZine

  Icon

Contact IG

Icon

Media Pack

  Icon

RSS Feeds