Two insurance firms, CIC Africa Cooperative Life Insurance Limited and CIC Africa Cooperative General Insurance Limited Malawi, have entered the local market, a development that is set to increase insurance penetration.
Reserve Bank of Malawi (RBM) figures show that the country’s insurance penetration at a paltry three percent.
The firms, which were unveiled in Lilongwe on Friday, are subsidiaries of CIC Africa Cooperative Insurance Limited of Kenya and have partnered Malawi Union of Savings and Credit Cooperatives (Muscco).
Muscco chief executive officer Sylvester Kadzola described their coming as a milestone in the country’s insurance industry.
This development brings the number of life insurance companies in Malawi to five and general insurance companies to eight.
Kadzola said the new companies will offer insurance services to people of all walks of life, particularly small-scale businesses, adding that the firms will help to answer economic, social and cultural needs of Malawians, regardless of their circumstances.
“What we are launching today is not just a hard-nosed capitalist undertaking venture with profit maximisation motive lying at the centre of its operations, but it is a cooperative undertaking which puts people before profits,” he said.
Kadzola explained that the launch complements government’s agenda of deepening financial inclusion as championed by RBM.
He said the business approach of the new companies is to take insurance services and products to the remotest parts of Malawi.
Said Kadzola: “Muscco and CIC Group will demystify the perception that is sometimes out here that insurance is for the elite.
“These companies will target everyone regardless of their status and offer tailor-made products for the low-income groups.”
RBM deputy governor for bank supervision Grant Kabango assured Muscco that RBM will continue to create an environment that encourages the development of the insurance industry by allowing big and small, old and new players to provide insurance services.
He said various studies have demonstrated a causal link between the development of the insurance industry in general and national economic development.
Kabango said RBM is convinced with the business profile of CIC Group and its impact in Kenya and expressed optimism that the new companies will boost the local insurance industry.