The number of people on insurance in Malawi is at 240 000 against a population of 17 million, with a penetration rate at a paltry 1.4 percent, a situation the Reserve Bank of Malawi (RBM) has decried.
“As I look at the insurance industry today, its penetration rate at 1.4 percent after 53 years of independence shows that our industry is yet to grow.
“It [the insurance industry] is more like a child who is not growing, but is growing grey hair,” said RBM Governor Dalitso Kabambe in his keynote address at the 2017 Insurance Institute of Malawi (IIM) Annual Lakeshore Conference in Mangochi on Friday.
The penetration rate figure given out by Kabambe against the widely quoted three percent, does not compare well with other countries in Africa and beyond, with figures showing in South Africa, the rate is at 16.9 percent, Namibia 6.7 percent and United Kingdom 10.5 percent.
In line with this year’s conference theme, Business Unusual, Kabambe challenged the insurance industry to be aggressive by doing things out of the ordinary to tap into the untapped insurance market.
He said from the look of things, the industry has not met the “needs of the economy”, stressing that with 60 to 70 percent being motor insurance, it is more like Malawi is a motor economy.
Malawi is an agro-based economy with about 30 percent of its gross domestic product (GDP) coming from agriculture, but Kabambe observed that the insurance industry has not taken advantage of the sector to grow its business.
The governor said if the insurance sector was responsive to the needs of the agricultural sector, government would not have been getting outsiders to provide insurance in the sector.
Speaking earlier, IIM president Immaculate Singano took time to explain the concept of business unusual, adding that organisations and customers in the industry want change that will require a departure from the business as usual way of doing business.
“In the present business climate, the view of business as usual is so 20th century and cannot be accommodated anymore. How good and sound is an organisation if it lacks a firm rooting in current market patterns and the ability to predict future market patterns and trends, if it lacks the culture of research, experimentation and innovation?”
This year’s conference attracted close to 200 delegates with presentations from local and regional insurance experts. n