Malawi’s insurance sector can benefit more if it improves access to insurance for low-income earners with interventions aimed at addressing both demand and supply constraints, an insurance practitioner has observed.
The practitioner, Chimwemwe Kanyenda, observed in a written response to a questionnaire that the provision of insurance services in the country is still limited in range and target.
He said: “The most common product offered is motor vehicle insurance. In other words, insurance products available in the country largely target the needs of those who own large assets or salaried individuals with high disposable incomes.
“This calls for the need to improve access to insurance for low-income people and interventions aimed at addressing both demand and supply constraints.”
Kanyenda said micro-insurance offers the potential for significant innovation in public-private partnership (PPP) arrangements, cooperation across voluntary and private sectors, rural and urban services sector development so as to extend social protection to the under-served populace over a sustainable period.
Malawi’s insurance penetration rate does not compare favourably with other countries such as South Africa whose penetration rate is at 16 percent, Namibia at 6.9 percent and four percent for Zimbabwe, Mauritius and Lesotho.
A latest report by the Reserve Bank of Malawi (RBM) indicated challenges in the sector where some insurers are failing to meet the minimum solvency requirement and majority insurers registered inadequate liquidity and capital with high level of overdue insurance receivables.
Meanwhile, RBM governor Dalitso Kabambe has plegded to continue engaging industry players in the insurance sector to address any other emerging risks.