The Malawi 2023 Finscope Consumer Survey Report has shown that insurance penetration reached 5 percent at the end of 2023, a 3-percentage point increase from 2 percent recorded in 2014.
However, only 4 percent of the country’s population is covered by companies in the formal sector while the remaining 1 percent is covered in the informal sector.
Fifty-seven percent of respondents in the survey indicated that they cannot afford to buy insurance, 21 percent said they do not know how it works or where to get it, 18 percent has never thought about it while 6 percent thinks insurance is for rich people and yet another 6 percent do not see the need for insurance.
“The insurance sector is led by motor vehicle insurance recorded at 43 percent in 2023 from 36 percent in 2014, Funeral cover has also increased to 11 percent from 4 percent while life insurance has dropped to 15 percent from 41 percent and medical cover to 20 percent from 39 percent,” the report reads.
President of Insurance Association of Malawi (IAM), who is also Chief Executive Officer for Reunion Insurance Company, Dorothy Chapeyama said the insurance industry, with strong support from its regulator, the Reserve Bank of Malawi, is diligently working on insurance awareness campaigns aimed at educating the general public about the importance and benefits of insurance.
“Through these ongoing efforts, we anticipate further increases in penetration. Our awareness campaigns are conducted annually, with a focus on reaching all districts across Malawi,” Chapeyama said.
In a recent interview, Kenya-based College of Insurance Chief Executive Officer and Director Ben Kajwang said insurance penetration in Africa on the balance of probability has been low across the continent apart from South Africa, sometimes as a result of cultures.
He said most African cultures have communal systems whereby in case of death or medical needs, relatives and friends make money contributions.
“There is still some form of insurance in the background and people still have not taken time now to move to what we call the formal arrangements. Now this formal arrangement is for people now to embrace insurance fully.
“What could have happened in Malawi, or maybe it has happened in Kenya, is that some companies have been formed but they have also gone under, with the premiums, and whatever it is, of the policyholders. Some have not also been able to pay their claims,” Kajwang said.
He emphasised the need for a robust regulatory framework with proper shareholding awareness campaigns and market development for insurance penetration to rise.
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