Malawi has lost K26 billion (about $36 million) in insurance premiums between 2014 and 2017 due to insurance externalisation, according to the Reserve Bank of Malawi (RBM).
While this means loss of business and jobs, the economy also lost foreign exchange, and in government, this money could fund a number of agencies and departments.
In an interview on the sidelines of the official rebranding launch of Emeritus Re, formerly Malawi Re, RBM director responsible for insurance and supervision Chimwemwe Kachingwe said if this money had stayed in the country, it could have contributed to the growth of the insurance sector.
She said: “It is for this reason that we have issued externalisation of insurance businesses directive which stipulates that before externalisation of businesses, individuals or players will have to seek approval from RBM upon evaluations of their reasons for the same.”
In his remarks, Emeritus managing director Christopher Mukwindidza said externalisation of insurance services remains a threat to the local industry as it is suppressing businesses.
“A lot of insurance companies not resident here are plying their businesses without following due processes despite having the directive in place,” he said.
Available statistics indicate that at only a paltry 1.4 percent or 240 000 Malawians against a population of 17 million, Malawi remains underinsured.
In South Africa, penetration is at 16.9 percent, Namibia 6.7 percent and the United Kingdom 10.5 percent.