Overview of the Insurance Industry in Malawi Limbikani Nundwe Reserve Bank of Malawi 10 th -11 th October 2019
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Overview of the Insurance Industry in Malawi
Limbikani NundweReserve Bank of Malawi10th -11th October 2019
Outline
• About Malawi
• The Insurance Regulatory Authority• Reserve Bank of Malawi/Registrar of Financial Institutions
• Overview of the Insurance Industry
• Challenges facing the Insurance Industry
• Areas of Interest in the GLOPAC Fellowship Program
2
Landlocked country in south-east Africa118,484 km2
17,563,749 (2018)80% live in rural areas
Agriculture accounts for about one-third of GDP and about 80% of export revenue
3
About Malawi
The Insurance Regulatory Authority
Central bank of the country -established under the Reserve Bank of Malawi Act
Reserve Bank of Malawi To be an institution
of excellence in promoting price and financial stability
Vision Mandated by the Financial Services Actto regulate all financial institutions
Registrar of
Financial Institutions
4
The Insurance Regulatory Authority
Registrar of Financial
Institutions
Bank Supervision
Pension and Insurance
Supervision (PISU)
Capital Markets and Microfinance
SupervisionFinancial Sector
Regulation
5
The Insurance Regulatory Authority
Life Insurance and
Pension Funds
• Life Insurers• Pension Funds
Non-Prudential
Compliance
• Pension Funds• Pension
Administrators
General Insurance and Intermediaries
• General Insurers• Medical Aid
Schemes• Insurance
Intermediaries
6
The Insurance Regulatory Authority
Key objectives of PISUTo promote safety and soundness of
pension and insurance entities
To empower and protect pension and insurance
consumers
To facilitate development of
pension and insurance sectors
7
Key result areas for PISU
Prudential supervision
Market conduct
supervision
Complaints handling and
consumer education
Market development
8
The Insurance Regulatory Authority
The Insurance Regulatory Authority
Strategic insurance targets for PISUTo increase insurance penetration from 2% in 2018 to 3% in 2021
Increase non-motor insurance business from 45% in 2018 to 55% in 2021
9
Overview of the Insurance Industry
Insurance Market Players
5 Life Insurers
1 Reinsurer
18 Insurance Brokers
1 Reinsurance
Brokers40 Insurance
Agents
4 Medical Aid
Schemes
8 General Insurers
10
Overview of the Insurance Industry
11.5 10.6 12.2
18.9
25.129.8
38.142.9
48.5
0
10
20
30
40
50
60
2010 2011 2012 2013 2014 2015 2016 2017 2018
MW
K'B
ILLI
ON
Total Assets – General Insurance Business
11
Overview of the Insurance Industry
8.8 9.712.9
20.2
26.430.2
35.5
41.6
48.1
0
10
20
30
40
50
60
2010 2011 2012 2013 2014 2015 2016 2017 2018
MW
K'B
ILLI
ON
Gross Premium Written – General Insurance Business
12
Overview of the Insurance Industry
0.9
-0.2
1.5
3.2 3.1 3.0
2.2
1.71.9
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2010 2011 2012 2013 2014 2015 2016 2017 2018
MW
K'B
ILLI
ON
Profit for the year – General Insurance Business
13
Overview of the Insurance Industry
61.1 68.8 89.5
170.5223.3
276.1332.7
473.2
619.6
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
2010 2011 2012 2013 2014 2015 2016 2017 2018
MW
K'B
ILLI
ON
Total Assets – Life Insurance Business
14
Overview of the Insurance Industry
2.6 2.95.1
7.39.4
18.6 19.2
23.4
29.7
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
2010 2011 2012 2013 2014 2015 2016 2017 2018
MW
K'B
ILLI
ON
Gross Premium Written – Life Insurance Business
15
Overview of the Insurance Industry
2.92.2
3.8
8.97.5
8.49.2
11.5
14.6
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
2010 2011 2012 2013 2014 2015 2016 2017 2018
MW
K'B
ILLI
ON
Profit for the year – Life Insurance Business
16
Challenges facing the Insurance Industry
Low capital and solvency
levels
Poor corporate
governance
Poor management information
systems
Low financial literacy levels
Lack of innovation
17
High management expenses
High premium debtors
Inappropriate pricing
(Undercutting)
Lack of mortality
tables
Increasing incidents of
fraud
18
Challenges facing the Insurance Industry
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