Impact of Covid-19 on the Malawian Insurance Sector

The COVID-19 pandemic disrupted the Malawian insurance sector, leading to stagnated sales and financial pressure on insurers' balance sheets. In response, the industry fast-tracked digitization of sales and claims processes. The Reserve Bank of Malawi provided regulatory relief, including supervisory levy holidays, while insurers faced challenges such as high internet costs and reduced consumer disposable income.

• The COVID-19 pandemic and associated containment measures disrupted insurance business operations in Malawi. While the sector was classified as an essential service, insurers were restricted to having only 30-50% of staff in the office. This led to stagnated sales due to a heavy reliance on physical sales via brokers and agents, as well as consumer hesitancy to engage remotely.
• Insurers responded to operational disruptions by accelerating the digitization of the insurance value chain. Measures included providing staff with laptops and internet, investing in remote server access, creating web portals for agents and brokers, and accepting digital signatures. Claims processing also shifted toward digital means, such as payments to bank or mobile money accounts.
• The pandemic negatively impacted the financial positions of insurers, increasing the expense ratio (36%), combined ratio (99%), and claims ratio (59%). Financial pressure stemmed from increased operational expenses for digitization, reduced premium income due to sales drops and lapses, and lower investment returns caused by the economic crisis. Additionally, there was a rise in pension and annuity withdrawals.
• The Reserve Bank of Malawi (RBM), as the regulator, responded to the crisis by suspending on-site examinations, extending supervisory report deadlines, and providing a one-year holiday on supervisory levies. The RBM also requested that insurers allow for more flexible premium collection and ensure claims are paid quickly.
• The sector faces ongoing challenges including liquidity and solvency pressures, the high cost of internet for digital engagement, and a lack of clarity and guidance from the RBM. However, the pandemic created opportunities for innovation in product design and distribution, and increased demand for income protection, hospital indemnity, and critical illness products.

APA

FSD Africa (2020). Impact of Covid-19 on the Malawian Insurance Sector. https://fsdafrica.org/wp-content/uploads/2025/05/Impact-of-COVID-19-on-the-Malawian-insurance-sector-19.10.20.pdf

Chicago

FSD Africa. Impact of Covid-19 on the Malawian Insurance Sector. 2020. https://fsdafrica.org/wp-content/uploads/2025/05/Impact-of-COVID-19-on-the-Malawian-insurance-sector-19.10.20.pdf.

Wikipedia

{{cite report |author=FSD Africa |title=Impact of Covid-19 on the Malawian Insurance Sector |date=October 2020 |url=https://fsdafrica.org/wp-content/uploads/2025/05/Impact-of-COVID-19-on-the-Malawian-insurance-sector-19.10.20.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fsdafrica2020impact, author = {{FSD Africa}}, title = {{Impact of Covid-19 on the Malawian Insurance Sector}}, institution = {FSD Africa}, year = {2020}, month = oct, url = {https://fsdafrica.org/wp-content/uploads/2025/05/Impact-of-COVID-19-on-the-Malawian-insurance-sector-19.10.20.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }