“There is certainly a challenge in accessing insurance in Zambia because this is a developing market. We are only 20 years [into] a liberalised economy, and therefore many people have to learn what insurance has been in a liberalised market,” Meanwood General Insurance managing director Tobias Milambo told CNBC Africa.
“There’s a low penetration of insurance of only four per cent, but that also presents a challenge and also an exciting opportunity for any new player like Meanwood General, who joined the insurance market only a year and a half ago.”
The insurance market is one of many industries that largely remain underdeveloped in the continent.
As a result, local, regional and international insurance companies have begun to clamber into the continent’s insurance to harness new market opportunities. Such interest is expected to make the industry more competitive and develop into a thriving market.
“The challenge is that we need to be innovative, we need to improve on the pricing structure. At the moment, the market suffers from a credit risk, where many people are buying insurance on credit and are not able to pay,” Milambo explained.
“As new players in the market, you have to be innovative and to find mechanisms in which players can easily pay their premiums at affordable rates.”
Milambo added that Meanwood General plans to create synergies with financial institutions, and find collaborative solutions to sort develop payment systems in Zambia.
Using technology to deliver additional products and services to Zambians will also be an effective market development tool.
“We’re seeing a lot of insurance companies, including ourselves, investing in IT platforms where we’re able to process data very easily. We are also seeing a lot of players now coming in on the internet, having websites in order to transmit their information to clients. We’re also seeing a lot of advertising than before, which means now clients are able to access information,” said Milambo.
A number of Zambian insurers have also begun to approach low income areas, stationing themselves in easily located places to expand their target market.
“The regulator, the pensions and insurance authority, are doing everything possible to make life easier for the players in the industry. At the moment, we are lagging behind in many areas in which we need to develop quickly so that people who want to buy insurance can buy easily,” added Milambo.