Vice President, Saulos Chilima, has challenged insurers in the country to be more innovative to boost insurance penetration in the country.
Chilima was speaking in Blantyre on Saturday during the Insurance Institute of Malawi Charter Dinner held under the theme ‘Business Unusual’.
According to the Reserve Bank of Malawi, insurance penetration in Malawi is pegged at 1.4 percent.
In South Africa, insurance penetration is at 16.9 percent, Namibia 6.7 percent and the United Kingdom is at 10.5 percent.
“We, therefore, seriously need business unusual ideas to turn our industry around and grow it.
“We need to innovate and develop new ways and practices that will turn the industry around and make significant contributions to the development of our country,” Chilima said.
The most urgent task, according to Chilima, is to facilitate access for the 98 percent of the population who are completely excluded from this service.
He said, when one searches 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 the industry is committed to the goal.
“A proposition such as – lack of a saving culture is really an anthropological premise which really has never had a sound basis. Similarly, observations such as low consumer awareness, inappropriate products or un-reliable distribution to allow for increased outreach are all acknowledgements of institutional and operational distortions which need to be corrected. I do hope that your industry will address the causes of the narrow scope of the insurance industry in the country.
“We should not be satisfied by off-hand reasons such as the dominance of the informal sector in our societies precluding modern business transactions like insurance or that access is inhibited by low disposable income among our people,” Chilima said
He noted that it was worrisome that some insurers continue to operate without proper management information systems.
Chilima said it is unthinkable and almost impossible to effectively and efficiently run insurance operations without the support of information technology.
“ICT has become one of the most important tools in insurance companies. I, therefore, implore insurance companies to invest in management information systems in order to increase efficiency, innovation and productivity within the institutions, which will lead to delivery of quality services to our customers.
“One of the things that ICT advancement brings to a country is cost efficiency. This can drastically reduce the cost of public service delivery in many respects. In other countries, customers use ICT to inquire, interrogate, consult and obtain information on their contracts, such as progress regarding claims settlement,” he said.
The charter dinner saw the institute ushering in a new executive committee headed by Maclonex Mwase, with Masautso Malaicha as vice president
In his acceptance speech, Mwase, who takes over from Immaculate Singano, said he would ensure that the institute disseminates information to the public through television, adverts and visits to various schools and colleges so that many people can understand the benefits of insurance.