Tier 2 and Tier 3 Cities Lead the Charge in Digital Insurance for MSMEs: Report

ENA MSME 2025-01-14 15:25:15 New Delhi, Jan 14 (KNN) In a notable shift, Indias micro, small, and medium enterprises (MSMEs) sector—a cornerstone of the economy contributing 40 per cent of exports and employing over 110 million people—is rapidly transitioning to digital business-to-business (B2B) insurance. A recent report by Policybazaar For Business highlights how this traditionally offline sector is warming to online channels, with unexpected momentum coming from tier 2 and tier 3 cities. Tier 3 cities are leading the charge with an impressive 46 per cent growth in digital insurance adoption, while tier 2 cities recorded a 35 per cent increase. Surprisingly, tier 1 cities lagged behind with a 27 per cent growth rate, underscoring a shift in the insurance landscape. Commercial lines insurance has emerged as the key driver of this transformation, experiencing a remarkable 37 per cent year-on-year rise in demand. Policies for workmen compensation, property, marine, and liability insurance are at the forefront, catering to the diverse needs of MSMEs. Industries such as manufacturing and logistics, buoyed by the governments Make in India initiative, are fuelling the demand for liability and marine insurance. As these businesses scale, insurance plays a critical role in mitigating risks, ensuring compliance, and providing the confidence to expand operations. This digital pivot is reshaping the way MSMEs approach risk management. Digital platforms not only offer convenience and transparency but also enable enterprises in smaller cities to access tailored policies—previously a challenging feat in offline markets. The formalisation of MSMEs is accelerating, with insurance serving as a catalyst for growth and stability. By embracing digital tools, businesses are not only safeguarding their operations but also contributing more robustly to the economy. This transformation is a testament to the resilience and adaptability of Indias MSME sector, paving the way for a digitally-enabled, risk-resilient future. (KNN Bureau) 40632 https://knnindia.co.in/news/newsdetails/msme/tier-2-and-tier-3-cities-lead-the-charge-in-digital-insurance-for-msmes-report 2025-01-14 15:25:15 knnindia.co.in Tier 2 and Tier 3 Cities Lead the Charge in Digital Insurance for MSMEs: Report