The Biannual Magazine of the Insurance Institute of Malawi Issue 1 2016 FELIX MLUSU 41 YEARS OF DISTINGUISHED SERVICE 2016 Issue 1 | Malawi Insurance Times 1 Contents Contacts Insurance Institute of Malawi MDC House Sir Glyn Jones Road P.O. Box 2040 Blantyre, Malawi Tel: 01 835 169 28 www.iim.org.com Climate change and the insurance Editorial & Advertising Team 09industry in Malawi Editor Chimwemwe Kanyenda Meet the African woman set to head UK Editorial Team 11actuaries institute Immaculate Kachapira Peter Kambalame Charter Dinner 2016 Advertising Chimwemwe Kanyenda 17 0999 934 912 The eye of a storm reveals your strength Graphic Design Graphic Elements 22 0888 367 379 Interview with insurance veteran, 28Felix Mlusu DISCLAIMER The Malawi Insurance Times, a Real Insurance rebrands to Britam Insurance premiere biannual magazine, is 36 published by the Insurance Institute of Malawi (IIM). Opinions expressed in the Malawi Insurance Times are IIM Annual Conference 2016 the personal opinions of the original 40 authors and do not necessarily reflect the views of the Insurance Institute of Malawi and the editorial team. The Insurance Institute of Malawi assumes no liability or responsibility for any inaccurate, delayed or incomplete information, nor for any actions taken in reliance thereon. All rights reserved. No part of this work may be reproduced or transmitted in any form or by any means, electronic or mechanical without prior permission in writing 11 09 from the Insurance Institute of Malawi. 2016/2017 COUNCIL MEMBERS Victor Mhone Chikondi Siliya HONORARY TREASURER ACII Peter Kambalame EDUCATION SECRETARY Bsc; Msc (mgt) VICE PRESIDENT Immaculate Kachapira ACII PRESIDENT Sheilla Khombeliwa Golden Jamu David Masasa BBA, ACII BA BBA; Dip CII VICE EDUCATION EVENTS OFFICER VICE EVENTS OFFICER SECRETARY Chimwemwe Kanyenda Maclonex Mwase Julius Nyambo BEd; Dip CII ACII BA; LLB (Hons) EDITOR MEMBER LEGAL COUNSEL Rex Kadzongwe BBA; ACII IMMEDIATE PAST PRESIDENT Vieson Thawani BA; ACII MEMBER 4 2016 Issue 1 | Malawi Insurance Times Editor’s Note elecommunication firms and service providers are redefining Africa’s insurance landscape, through Ttheir brand recognition and wide customer reach to offer micro-insurance products to a myriad of uninsured Africans. The continent’s largest mobile telephone network operators, such as Airtel, Safaricom, Tigo, MTN and Vodacom, are fiercely battling it out to expand their customer base via innovative business models that rival the traditional premium payment systems popular in the West. In the insurance sector, mobile money has significantly facilitated growth in micro insurance, which involves the provision of services to low and middle- income earners. Microinsurance products are typically low-premium, with low coverage limits that seek to prevent low and middle-income earners from reversion into poverty. Mobile network operators have revolutionised microinsurance because of the convenient access available through their telecommunication infrastructure. Through this infrastructure, microinsurance providers are able to receive premiums from customers and settle claims through mobile wallets. In 2013, TNM, (a leading local Mobile network operators have revolutionised telecommunications provider) established a strategic partnership with NICO Life microinsurance because of the convenient access Insurance Company Ltd, (a giant in the available through their telecommunication infrastructure. domestic life insurance industry) and MicroEnsure, (a recognized leader in the provision of insurance for the mass market in Africa and Asia) to find a solution to this challenge by providing Malawians with access to free life cover. Any TNM Mobile phone user, hereinafter environment is on the horizon. What’s both life and non-life. It is crucial that Malawi referred to as MPU, aged between 18 and 75 unclear is the nature and availability of those gives careful consideration to the immense under Mpamba Mobile Money service can channels. Nonetheless, it does seem fair to value of bancassurance as a vehicle to grow register and with not less than MWK1000 expect that the future of insurance will have the presence and use of insurance within the TNM airtime usage per month, one can to support a multi-distribution environment, community. get a free life cover. This product is being catering to increasingly sophisticated On a different note, climate change is a distributed by TNM and provides 30-day consumers who want to buy direct, who may global issue of a scale, severity, and potential free life cover to a MPU and one registered want do their own research, or who may want irrevocability that society has never before beneficiary. to use advocates or brokers in an exchange to experienced. An article “Climate change and The MPU needs to just keep using TNM conduct the comparative samplings. the insurance industry in Malawi” advances airtime of not less than MWKI, 000 per month Given the fact that the future distribution that increased frequency and severity of to get the cover. Should a MPU’s airtime landscape certainly will be different, insurers major weather events mean that climate usage fall below the minimum spend level, need to become the efficient marketers and change has increased the risks and costs of no cover will be provided in the following maximize their distribution opportunities insurance. This sobering conclusion points month. while becoming nimbly able to respond to our new and emerging reality; this is not Strategic collaborations between mobile to all of them. One thing that is assuredly another cyclical period of temperature change network operators and insurance providers true is that insurers will be using a variety but a future of constantly evolving and result in the recording of transactional data of different methods of distribution for the increasingly challenging climactic conditions. which provides insurance practitioners with foreseeable future, and what will matter as The Veteran Section features former reliable and available data which can be used much as or more than the specific methods Managing Director of NICO Holdings, Felix to design and price new products, especially employed is how well they align with a n Mlusu, whose illustrious and stellar career those targeted at low and middle-income insurer’s own unique strategy and how good has spanned over four decades. earners. The benefits of such co-operation a job it does of execution. Overall this issue includes insightful only enhance over time with increased uptake In this issue, a piece titled “Bancassurance” articles which we believe will be of immense of insurance products hence opening up a examines the impact of the alternative value to you the reader. bigger pool of data. Insurance companies may distribution channel of Bancassurance in the also ride on the trusted brands of established insurance industry. There can be little doubt, mobile networks operators to launch various if any, of the relative value of the potential Chimwemwe W. Kanyenda insurance products. for bancassurance to open the path toward It’s clear that a multi-distribution cost-efficient access to insurance products, 2016 Issue 1 | Malawi Insurance Times 5 President’s Note steemed members of the Insurance Institute of Malawi, welcome to the first edition of the Insurance Times EMagazine for the year 2016. It is really a great honour to be elected President of the Insurance Institute of Malawi for the period 2015/2017. During the Annual Charter Dinner in February this year, when the new Executive Council was unveiled, we made an undertaking that we will remain steadfast and committed in serving the membership. The Institute’s core mandate is to promote professionalism in the insurance industry through education and training and, without prejudice, to maintain a sound, vibrant and stable insurance industry.The Executive Council, therefore, has a responsibility of making sure that the thirst for knowledge is satisfied in the industry. Knowledge is power so they say, but I can also add that the use of knowledge is greater power. In a quest to fulfil knowledge transfer and dissemination to the membership, the Executive Council lined up a number of activities to be conducted in the year 2016, a calendar of which was circulated to all “...I am pleased to inform you that our Annual Lake members. Some of the activities have already Conference took place from 18th to 20th August taken place. The Institute held a Corporate Governance practical and interactive training under the theme “Delivering our Promise” from 8th to 9th June 2016 for insurance firms seeking to improve or implement corporate governance best practices. Research has shown that a well-governed that have passed their Chartered Insurance Old Mutual, our quiz sponsor and partner company performs better in the long run. To Institute exams in the April 2016 sitting. for the past five years will continue supporting address the challenge of providing a clear Faced with a pass rate of 46%, we managed to the competition that tests the knowledge of understanding of corporate management, produce 3 Chartered Insurers and all I can say our young scholars on insurance matters the course provided participants with key is congratulations to the qualifying candidates. and other related topics. It is always an concepts and how this understanding can be Let me encourage members to take a serious exciting event where young professionals turned into best practices that add value to approach towards their studies so that we showcase their skills and knowledge base. the company. become an industry of professionals. I also We are grateful for the five-year sponsorship. The Institute, in collaboration with Equity would like to encourage those who didn’t We create our action plan with confidence Reinsurance Brokers also arranged a Risk pass not to give up and those who are afraid because we know we have a trusted partner. Management Seminar on 3rd June, 2016 to take exams to start enrolling and studying. Many more activities and trainings will whose aim was to help members of the On a different note, I am pleased to take place this year and I urge you members industry underwrite risks appropriately.