RBM LAMENTS LOW INSURANCE PENETRATION

                                      By Steven Godfrey Mkweteza

Reserve Bank of Malawi {RBM} says despite the country’s efforts to boost the insurance industry, the sector still register low penetration of clients.

Governor for the country’s sole financial institutions regulator, Dalitso Kabambe disclosed this on Monday during the inaugural launch of the insurance week in Blantyre.

Kabambe attributed the problem to poor awareness drive as the main contributing factor.

“We are a long way to go. Our studies reveal that only 67 percent of Malawians do not understand insurance concept. This is worrisome indeed as compared to other neighboring countries such as south Africa, Zimbabwe, Zambia and Lesotho,” said Kabambe.

According to Kabambe, the country recorded a 2.10 percent of insurance penetration as compared to 1.4 percent recorded in 2017.

Kabambe said many Malawians see insurance as cumbersome, expensive and that insurance companies are crooks who are bent at defrauding people.

“Insurance business is built on trust. Therefore, unless we do a lot of awareness mostly in the rural areas and develop tailor-made products that will suit the country’s need, then there is no hope that the penetration can be increased soon,” observed the governor.

President for insurance institute association of Malawi {IIAM} Donbell Mandala concurred with Kabambe but singled out financial constraints as the main factor that hinder the insurance industry to roll out intensive financial literacy awareness to the masses most especially on insurance.

Mandala proposed a small levy contribution in a bid to boost the financial support to the sector on awareness undertakings.

“Many people are indeed not aware of insurance, so they are easily defrauded. Incidences like this give bad picture or misconceptions for the insurance sector. In the economy which is not growing fast, we need to develop confidence with our clients,” said Mandala.

Mandala, who said knowledge was an  important issue in the country where the large percentage of people are illiteracy,  said currently, the association targets schools as a platform for its capacity building drive at grassroots level.

According to Mandala, studies indicate that many Malawians insure their vehicles as compared to life and other properties for fear of road traffic officers.

The event fall under the theme ‘insurance claims and complaints handling’.