With Malawi’s insurance penetration stuck at paltry 1.4 percent, a former insurance guru has advised firms to adapt to the ever-changing landscape by adopting technology to avoid being left behind.
In his presentation at the Insurance Institute Malawi (IIM) Annual Lake Conference in Mangochi on Thursday titled The Future Ready Insurer, former chief executive officer of Old Mutual West Africa and Old Mutual Malawi Chris Kapanga warned that the future will require tech savvy and insurance savvy customers.
“There will be more demand for cashless payment [electronic] for premiums and claims. There will be more regulation, including for full disclosure of premium utilisation.
“If we are still issuing cheques for paying of claims, we are not future ready,” he said.
Kapanga said future customers will demand flexibility of products that speak to customer requirements rather than prescriptive comfort-zone products, adding that there will more non-traditional products such as oil and gas, mining, aviation and political riots.
He called on insurers to be customer-centric and delve into village banks which have flourished in response to inflexible commercial banks.
“Business as usual must break the models of the past. There is a need for cultural change and alignment with the specific markets insurers service, providing risk capital on different terms to a market that comprises large numbers of small risks,” said Kapanga at the conference held under the theme Leading at the Edge: The Future Ready Insurer.
He said the move in auto
coverage from insuring individuals to the vehicle will continue, warning that it may even split, with individuals holding a general third-party liability coverage and the vehicle ‘holding’ its own coverage against damage.
Speaking earlier, IIM president Maclonex Mwase said the insurance industry, which is challenged by external and internal complications, stands at a crossroad of maximising the power of technology to meet changing customer expectations, processes, channels and new competitors.
He said while some decisions must be made quickly to gain a competitive edge, others can be costly, not just in terms of financial impact, but also customer and channel experience and value.
“As such, a strategic vision and roadmap that plans for change is more crucial than ever for insurers intending to embrace change through flexibility and innovation,” he said.
In 2017, Reserve Bank of Malawi (RBM) Governor Dalitso Kabambe said the country’s insurance industry is “more like a child who is not growing, but is growing grey hair”. Malawi’s insurance penetration is way below other countries such as South Africa at 16.9 percent, Namibia 6.7 percent and United Kingdom 10.5 percent.