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Insurance penetration up to 2.01% in 2018

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By Taonga Sabola:

Malawi’s insurance penetration inched up by 0.61 percentage points from 1.4 percent to 2.01 percent in 2018, the Reserve Bank of Malawi (RBM) has said.

Speaking recently, RBM Governor, Dalitso Kabambe, said the penetration was 0.01 percentage points higher than the two percent target for 2018.

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Kabambe said membership of pension subscribers has also increased from 250,000 to 393,313 against a target of 350,000.

“These were achieved through intensified campaigns and general awareness programmes among employers and employees.

“The bank has also made substantial progress in redirecting pension funds towards infrastructure projects by raising it to 13.2 percent against a target of 10 percent,” Kabambe said when he launched RBM Strategic Plan.

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Malawi’s insurance penetration does not compare favourably with other countries such as South Africa, where penetration is at 16.9 percent, Namibia at 6.7 percent, and the United Kingdom at 10.5 percent.

Among other things, insurance penetration has remained dismal in Malawi due to lack of what to ensure due to poverty as well as limited knowledge on the need for insurance.

Addressing the 2018 Insurance Institute of Malawi Charter Dinner, Vice President Saulos Chilima underscored the need for industry players to innovate to turn the industry around and make significant contributions to the development of our country.

“The most urgent task is to facilitate access for the 98 percent of the population who are completely excluded from this service. When we search for the reason underlying this situation, quite often the factors identified tend to be dominated mostly by structural and institutional distortions, many of which can be rectified if we are committed to the goal.

“A proposition such as lack of a saving culture is really an anthropological premise which really has never had sound basis. Similarly, observations such as low consumer awareness, inappropriate products, or unreliable distribution to allow for increased outreach are all acknowledgements of institutional and operational distortions which need to be corrected,” Chilima said.

Meanwhile, the 2019 Insurance Institute of Malawi Annual Charter Dinner will be held in Blantyre this Saturday under the theme ‘Digital Insurance: Innovate and Evolve’.

Chairperson of the organising committee of the charter dinner, Emily Duwa, said Malawi Revenue Authority Commissioner General, Tom Malata, would be the guest of honour at the event.

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