NBS Bank plc has partnered two insurance firms in bancassurance, which is the selling of insurance products and services by banking institutions.
The firms—Nico Life Insurance Company and Nico General Insurance Company—just like the Malawi Stock Exchange (MSE) listed bank, are subsidiaries of financial services group Nico Holdings Limited, which is also listed on MSE.
Speaking during the launch of the NBS Bank bancassurance in Blantyre last week, the bank’s chief executive officer Kwanele Ngwenya said they are banking on the strength and experience of Nico Holdings in the insurance industry and on the bank’s wide distribution network
He said the insurance product has been priced to suit the pockets of all Malawians.
Nico Holdings managing director Vizenge Kumwenda, who is also NBS Bank board chairperson, said the partnership will be instrumental in making insurance products more accessible and affordable to Malawians, thereby contributing to increased insurance penetration rate.
The country’s insurance penetration rate is at 1.4 percent, according to the Reserve Bank of Malawi (RBM).
Said Kumwenda: “NBS Bancassurance will also be key in demystifying insurance for potential customers. A farmer from Chitipa [District] will be able to walk into the Chitipa NBS Bank service centre and directly access information on crop insurance, for example. He or she would not have been able to do so if they had to travel all the way to Mzuzu to the nearest Nico General Insurance Company branch.”
RBM director of pension and insurance supervision Chimwemwe Kachingwe said NBS Bank bancassurance augurs well with the current efforts advanced by the Registrar of Financial Institutions of deepening the insurance sector and improving the country’s low insurance penetration.
“In terms of product distribution, banks play a unique role of being able to reach out to high net worth individuals and also the population in the underserved markets.Because of this fact, statistics around the globe show that provision of insurance products and services through banking institutions has grown significantly over the years.
“Similarly, within Africa, bancassurance is quickly gaining popularity as both banks and insurers recognise the need for partnerships in an increasingly competitive market,” she said.
Kachingwe said it is encouraging that banks are embracing this new insurance distribution channel and is bound to provide significant competitive advantages for NBS Bank and the insurers which have partnered with the bank.