ET World MSME Day: How New India Assurance is charting a resilient future for MSMEs
Addressing climate risk with parametric insurance
One of the most pressing concerns for MSMEs today is climate risk. From floods and landslides to heatwaves and hail, unpredictable weather phenomena are impacting operations across industries. Subramanian shared that NIA has taken bold steps to address this by launching innovative products such as Nishchit Suraksha. Nishchit Suraksha offers immediate payouts based on pre-defined triggers, namely, rainfall thresholds and such as temperature spikes, without the need for traditional loss assessments.
'Unlike traditional insurance, parametric cover offers instant cash flows,' she explained. 'When a trigger is breached, a payout is made, often within hours or days. This ensures seamless business continuity and better financial resilience.'
This speed and efficiency makes such products especially appealing to MSMEs that lack deep cash reserves and need quick recovery to stay afloat.
The New Blueprint for Risk & Resilience | Girija Subramanian, CMD, The New India Assurance Co. Ltd
Girija Subramanian, Chairman and Managing Director, The New India Assurance Co. Ltd., shared valuable insights in an exclusive fireside chat on the theme 'Future Proofing India's Small Businesses: The New Blueprint for Risk and Resilience.' She highlighted the growing shift towards AI-driven credit rules and the increasing adoption of digital lending as key trends shaping the future of MSME financing. However, she also pointed out a critical gap — the lack of awareness among MSMEs about specific insurance programs that can help them mitigate risks effectively. While the government has introduced several supportive schemes and policy reforms for MSMEs, Girija emphasized the need for greater outreach and education to ensure these benefits reach grassroots businesses.
Bridging credit and insurance with embedded cover
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Indian MSMEs are increasingly tapping into digital lending and AI-driven credit tools. In this context, New India Assurance is eyeing partnerships with credit guarantee platforms and fintechs to offer embedded insurance. It is also exploring collaborations that bundle insurance with working capital loans.
These kinds of embedded coverage, whether for liability, property, etc, ensures that MSMEs are not just financed, but protected. 'Insurance significantly reduces the risk of credit default,' Subramanian said. 'If a covered event occurs, the payout ensures business continuity and protects loan exposure.'
Tackling trust and awareness deficits
Subramanian acknowledged that lack of trust and awareness about numerous insurance offerings remain key hurdles for Indian MSMEs. Micro units in particular operate with limited capital and are wary of spending on insurance. It doesn't help that insurance policies for businesses are also traditionally difficult to understand.
To address this, NIA has introduced customer information sheets, simplified policy language, and targeted awareness drives particularly in Gujarat, where it is the designated state insurer.
'Trust comes when customers see that claims are paid quickly and without hassles,' Subramanian stated, emphasising the role of transparency and word-of-mouth in building credibility.
Segment-specific solutions
NIA is also tailoring products for different sub-segments within the MSME ecosystem, such as medium enterprises. For instance, Mahila Udyam Bima offers targeted protection for women entrepreneurs. Such products are distributed through retail agents and partner networks, with the insurer actively participating in industry and government workshops to reach the last mile.
'The MSME sector contributes over 40% of India's exports and GDP. It's imperative that we create tailored underwriting models and products that match their risk profiles and scale,' Subramanian underlined.
2025 as NIA's 'Year of SME'
In line with the national focus on MSMEs and the need to increase insurance penetration (which has stagnated at around 1% for years), NIA declared 2025 as its 'Year of SME'.
Subramanian revealed that the company has mandated all business units to prioritise MSME clients, especially those who've never been insured before. 'It's time we look beyond the already-insured pie and focus on businesses that have stayed outside the insurance umbrella,' she said.
To conclude, the ET MSME Day fireside chat underscored a critical shift: that insurance is no longer a luxury or afterthought for small businesses, but a necessity. By aligning its strategies with emerging risks, technologies, and policy reforms, NIA is helping transform India's vibrant MSME sector into a more resilient engine of growth. As Subramanian aptly concluded, 'Insurance can no longer be viewed as an optional expense. It's a strategic investment in business continuity.'
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