The Reserve Bank of Malawi (RBM) is closely monitoring players in the insurance industry to ensure they are providing services that meet customers’ demands.
The insurance industry in Malawi is narrow with a penetration rate of less than three percent and about one percent of people in the country accessing insurance services, according to RBM figures.
Speaking yesterday in Lilongwe on the sidelines of a five-day workshop organised by the International Monetary Fund (IMF) and Africa Regional Technical Assistance Centre (Afritac), RBM Governor Dalitso Kabambe said the insurance industry in the region is facing similar challenges because it relies mostly on agriculture.
He said: “Most of the countries in eastern and southern Africa have a low insurance penetration because we have similar challenges. If you look closely, we rely on agriculture for our economy to move while other countries depend on oil and mining.
Malawi is an agro-based economy with 30 percent of its gross domestic product (GDP) coming from the agricultural sector, according to the National Statistical Office (NSO).
Commenting on the meeting currently underway, Kabambe believes that proper monitoring of players in the financial sector can help avert economic crises.
“In 2008, we had a financial crisis globally because we did not have good monitoring mechanisms which could have helped us avert such disasters.
“Meetings such as these help us to come up with regulations that can help the insurance sector to grow,” he said.
IMF financial sector supervision adviser Courtney Christie-Veitch said the regulation of the insurance sector in this part of Africa is similar to what he saw in the 20 Caribbean countries where he has spent considerable years providing advice in the insurance sector.
“I have been in my new role for a year and half, but what I have found out is a similar traction on the risk-based insurance if we compare East African with Caribbean countries,” he said.
Officials from Tanzania, Uganda, Eritrea and Burundi are taking part in the meeting.