Low financial literacy levels coupled with squeezed levels of disposable income have been cited among key contributing factors to low insurance penetration in Malawi.
Local medical insurance firm, Wella Medical Aid Society Chief Executive Macdonald Wella, said this on the sidelines of a client engagement breakfast in Blantyre last week.
He said while the number of insurance firms has increased in all spheres lately, penetration rate remains relatively lower than anticipated.
Malawi’s insurance penetration rate is at less than three percent, the lowest in the region.
Wella said access to insurance services can improve, especially among low-income earners, if industry players package their products and services in line with market needs.
“Not many people know about insurance. The level of knowledge about insurance is what is determining the number of people buying insurance products and services.
“We are doing everything possible, reaching out to as many as possible with products and services. In doing so, we can increase the penetration rate,” he said.
Available figures show that in 2021, the insurance sector grew by 9.69 percent to a 9.11 percent growth in the preceding year.
In the 2021 financial year, the industry registered claims valued at K26.2 billion, up from K22.6 billion in 2020.
Profits generated before tax rose to K7.9 billion, representing a 61 percent rise from K4.9 billion posted in 2020.
Commenting on the company’s performance in 2022, Wella said amid volatility of the economy in the year, the firm’s clientele base grew substantially, among other things.
He said within three years of its operations in the country, the firm has seen its income also growing exponentially, with an outlook in 2023 and beyond looking promising.
“Business has been fair. In fact we are the fastest growing medical insurance company in Malawi. This came from hard work from our staff as well as the support we got from the industry,” Wella said.
One of the participants, Development Aid from People to People human resource manager Elijah Jumbo said Wemas members at his office are speaking highly of the services the firm offers.
“Our members of staff are able to access medical services at various hospitals and clinics throughout the country,” he said.