The Reserve Bank of Malawi (RBM) has bemoaned the low number of Malawians accessing insurance services in the country.
RBM has since encouraged financial market players to come up with new products that would boost insurance penetration in the country.
Speaking in Blantyre on the sidelines of the launch of NBS Bancassurance, RBM Director of Pension and Insurance Supervision, Chimwemwe Kachingwe, said Malawi’s insurance penetration is at 1.4 percent.
She said Malawi ranks poorly against other countries in sub-Saharan Africa such as South Africa which has an insurance penetration rate of 17 percent.
“This means that majority of Malawians do not have insurance and to us it is very worrisome,” Kachingwe said.
She said as at December 31, 2017 Malawi had 300,239 individual life insurance policies in force.
On the other hand, Kachingwe said, as at March 31, 2018 Malawi had 1.9 million active bank accounts, against a population of about 18 million people.
“This means that over 16 million people are unbanked. With these statistics, the Central Bank undertakes to support any financial institution that embarks on innovative solutions that help to foster sustainable development of the financial sector,” she said.
Kachingwe said bancassurance requires the presence of a conducive regulatory environment to flourish.
“The registrar is aware that having the right set of regulations in place is what will facilitate the growth of financial services and indeed the flourishing of bancassurance business alongside other traditional insurance distribution channels,” she said.
Kachingwe said RBM is amending the Insurance Act which would help boost insurance penetration.
“One of the amendments will focus on providing clarity on bancassurance business. RBM will also be enhancing the regulatory framework for bancassurance in order to harmonise the regulations that govern bancassurance and other insurance agencies.
“Issues of adequate disclosures and reporting requirements will also be dealt with in the regulatory framework,” she said.