Malawi’s insurance penetration is at a paltry three percent, but this is an opportunity for the sector to grow, National Bank of Malawi (NBM) chief executive officer George Partridge has said.
“We have a very low base and to push that figure to around 10 percent will actually be a tremendous growth,” he said on Friday on the sidelines of a three-day Insurance Institute of Malawi (IIM) 2016 Annual Insurance Conference at Sunbird Nkopola in Mangochi.
The conference, which attracted seasoned local and international presenters under the theme Delivering Our Promise, provided an opportunity for the exchange of ideas and experiences in the insurance industry.
A recent Reserve Bank of Malawi (RBM) 2015 Annual Review shows that the insurance sector is growing as gross written premiums were projected to grow by 12 percent in real terms and that in 2016, the sector is projected to grow by 4.7 percent.
Partridge, who was the guest of honour at the event, commended IIM for the strides it has made over the years, considering that this is “a fairly young industry”
He said: “Bu I want to alert them to the challenges that lie ahead. Don’t just sit around and think that the future will take care of itself, but make sure that you tackle the challenges that are in the industry head on.
“The biggest challenge at the moment is the market penetration and the insurance illiteracy among our population, and there is need to have concrete strategies to tackle that for the insurance industry to grow,” he said.
Malawi’s economy is limping characterised by high interest and inflation rates, a depreciating exchange rate and high poverty rates.
Partridge said since insurance sometimes is seen as a luxury there is need to think outside the box to improve the penetration rate.
One of the presenters, Noel Chalamanda, who is also Blantyre City major said Malawi can develop its cities without having to look for funding outside the country by using pension funds held by insurance companies under Public Private Partnerships (PPPs).
“They [insurance companies] will finance the projects, manage them and ensure that they are properly maintained. For example, if we want to build a proper state-of-the-art bus terminal, we don’t have the money, government does not have the finances, it has other priorities.
“But then the local authorities can partner with insurance companies that have the funds, we have the land. We can strike a deal with proper terms and conditions to get that structure built and deliver that beautiful service to our people,” he said in an interview.
His presentation was titled Relevance of Insurance in Municipal Business.
Chalamanda said the same can also be done in the provision of accommodation units other than just distributing the plots.
Before the end of the conference, Nico General Insurance Company Limited chief executive officer (CEO) Eric Chapola moderated a panel discussion on industry challenge, reforms and alignment.
The panellists included acting group CEO of Old Mutual Malawi Edith Jiya, Noel Nkulichi who is RBM director of pension and insurance supervision and lawyer Zolomphi Nkowani, former chief State advocate and now consultant to the China-Africa legal training base for the Forum on China-Africa Cooperation (Focac). n