Increased road accidents hit insurance industry hard 

Increased road accidents are having a knock-on effect on the insurance industry as companies are paying more to settle insurance claims, it has been learnt.

Statistics from the Directorate of Road Traffic and Safety Services (DRTSS) show that last year, the country registered 694 accidents compared to 962 accidents the year before.

Insurance Association of Malawi president Grant Mwenechanya yesterday could not provide the figures in terms of how much claims the industry has settled as a result of accidents, asking for more time to compile the figures.

But one of the insurance companies, Prime Insurance, has given a glimpse of the extent of the payouts, having paid K3 billion last year to settle accident claims.

The firm’s chief executive officer Albert Mbawala has called for swift action to curb rising numbers of accidents, saying with the huge claims, insurance companies cannot survive.

“We are hit hard by the rising number of accidents most of which are avoidable. This is eating too much into our working capital,” he said.

Malawi’s insurance penetration is at 1.4 percent, according to the Reserve Bank of Malawi (RBM), and about 70 percent is taken up by motor vehicle insurance, which is mandatory.

This means with the rise in road accidents, payment of claims will also be on the rise.

Malawi Police Service head of traffic Mc Ferson Matowe said the police is worried with increased road accidents.