High inflation, interest rates choking insurance companies


The rise in inflation and high interest rates are exerting pressure on the country’s insurance industry resulting in reduced growth.

Nico General Insurance Chief Executive Officer, Eric Chapola, on Friday said due to flimsy economic growth, insurance companies are finding it hard to pay for their fixed assets.

“The country’s Growth Domestic Product (GDP) is not growing as budgeted for, inflation is above 20 percent and interest rates are high making it difficult for companies to borrow and invest.


“Operating under such conditions is very difficult not only for insurance companies but also those in other sectors,” Chapola said.

He said insurance companies are failing to grow as expected with the prevailing conditions resulting in unmanageable claims payment.

“Claims management is a problem because with high level of inflation, claims are becoming expensive and most of them are becoming total losses.


“The challenge now is for the stronger companies to prove they will remain relevant and will continue to exist,” said Chapola.

Meanwhile, Nico General has a new manager the Northern Region.

Frank Gomani is now at the helm of Mzuzu branch taking over from Mathole Khumalo who will assume the position of Assistant Underwriting Manager in Blantyre.

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