Malawi continues to be ranked poorly in terms of insurance penetration, trailing behind regional counterparts.
Recent figures show that insurance penetration inched upwards, albeit slightly, to 2.5 percent, from 1.4 percent recorded in January 2018.
The rate, reportedly the lowest in the region, remains a bother to industry players who blame it on economic hardships that Malawi has been facing, saying the situation has been negatively impacting the sector as it is struggling to grow.
In an interview yesterday, Insurance Institute of Malawi President Hastings Kapesa rated the situation as unfortunate.
He said through collaboration between the insurance industry and the financial services sector, the industry can create room for growth.
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Kapesa said development of innovative insurance products, coupled with favourable regulatory frameworks, will enable the sector to shield citizens from the shocks of economic instability.
“We are asking the populace to come forward and insure their properties. Apart from that, we are doing campaigns with stakeholders such as the Reserve Bank of Malawi so that the percentage increases,” Kapesa said.
Life Insurance and Pensions Association of Malawi President Stain Singo cited limited disposable income of people, high illiteracy levels and lack of awareness on insurance products among contributing factors to the low insurance penetration rate.
“People’s disposable income is low; therefore, insurance is not among their priorities. But we are designing products to suit everyone and, aside from that, we are working with the regulator RBM to make people more aware of insurance,” Singo said.
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One of the players in the industry, Old Mutual Life Insurance Company, says, going by the figures, most people remain susceptible to shocks and insurance remains an ideal safety net.
Old Mutual Life Insurance Company Managing Director Roy Punungwe said the low insurance penetration rate remains worrisome as it defeats the aspirations of the financial inclusion drive.
“If you look at mature industries, they will want such penetration to go up because it speaks to the larger issue of limited financial inclusion within the economy and, for the economy to grow, there has to be inclusive growth,” he said.
A recent Global Data ‘Malawi Insurance Industry – Key Trends and Opportunities to 2026’ report indicates that gross written premium of the Malawi insurance market reached K120.7 billion (about $150.5 million) in 2021.
The market is expected to achieve a compounded annual growth rate of more than 13 percent between 2021 and 2026.
