By Llywellenie Mpasa:
Reserve Bank of Malawi Governor Wilson Banda has announced the central bank’s intent to review the Insurance Act in consultation with other stakeholders to modernise the sector.
He said the move would also help increase Malawi’s insurance penetration rate, which at less than two percent.
Speaking at the Insurance Institute of Malawi (IIM) Charter Dinner in Blantyre, Banda said there is an urgent need to update several outdated provisions that no longer align with current industry practices and economic conditions.
“The existing Insurance Act contains several archaic provisions that are failing to meet the demands of our rapidly evolving financial landscape.
“This review aims to ensure that our regulatory framework supports sustainable growth and offers adequate protection to policyholders,” he said.
The central bank governor emphasised that the revision will be comprehensive, involving consultations with key stakeholders in the insurance sector, including insurers, brokers and policyholders.
“The existing Act contains provisions that are outdated and do not sufficiently cover natural uncertainties like the recent cyclones and pandemics like Covid,” he said.
He also noted that the review will focus on enhancing regulatory oversight, improving consumer protection, and fostering innovation within the industry.
Banda said this new regulatory framework will help increase insurance penetration from the current two percent, which he described as “frankly pathetic”, to at least 10 percent in the near future.
He bemoaned the low insurance penetration, saying that it is leaving more people vulnerable in times of uncertainty.
“Insurance provides a safety net for individuals and businesses alike, helping to sustain economic activity during tough times,” he said.
Banda outlined several strategic pillars necessary for this transformation, including public awareness campaigns about insurance benefits, strategic public-private partnerships and enhanced use of data and technology.
During the dinner, IIM welcomed its new president Rubben Kawelele Kamanga.
In his inaugural address, Kamanga emphasised the need to strengthen the insurance sector’s capacity to endure economic turbulence and safeguard policyholders’ interests.
“We must enhance the resilience of the insurance industry through innovative strategies and robust risk management practices. Our goal is to build an industry that can withstand economic shocks and continue to provide essential services to our clients.” he said.
