INSURANCE INSIGHTS - protecting the poor through insurance

In an exciting collaboration between Minet Malawi, Britam, and The Daily Times - Malawi's leading newspaper - we are thrilled to introduce a groundbreaking initiative that will redefine your Wednesdays. Welcome to the Insurance Insights Column – a weekly rendezvous with the world of insurance and contemporary issues that matter. Every article aims to illuminate the intricate landscape of insurance products and relevant topics that impact us all. The articles will be educative at all levels, catering to both practitioners and non-practitioners. 

As published in The Daily Times (Malawi) on July 10th, 2024

Every time I read about rural community economic empowerment, I think about a moving speech that the former secretary of the United Nations (UN), Ban Kimon, made at the World Summit on Food Security in October 2009. In his defining address, Ban Kimon highlighted that in Africa, far too many people go without food. He emphasized that this is a daily reality. “Africa’s small farmers, who produce most of the continent’s food and depend mostly on rain, could see crop harvests drop by 50% by 2025. We must transform agricultural development, markets and how food is distributed. Our job is not just to feed the hungry, but to empower the hungry to feed themselves,” said the former boss of UN.

I share Kimon’s conviction. Poverty reduction should be a concern for all of us, including the profit-oriented private sector. The private sector must carry a stake in the fight against poverty and the best formula is through the formation of public-private partnerships. One way of achieving the goal is by empowering the poor through insurance. 

Consider the following case: 

In one of my recent business sojourns up north, I met a low-income earner, a villager, Tamwefe (not his real name), who saw 23 of his 25 herds of cattle die of foot and mouth disease. To say the least, this is a sad reality and trial for a villager. I later learnt that Tamwefe was a retiree. He used to work, as a commissionaire, in one of the commercial banks in Lilongwe and had just bought herds of cattle with proceeds from his pension. 

Given this scenario, how would you assist a person like Tamwefe, who has just seen a sizeable portion of his pension fund wiped out in one go? Tamwefe’s loss kept and is still keeping me thinking. Had he purchased livestock insurance, he could have collected compensation as a fallback. Unfortunately, for him, there is no one to complain to, no one to turn to for help, no one cares about his massive set-back. No farmer cooperative or organization to rescue the poor fellow from falling back into the poisonous pangs of poverty. The bottom line is that Tamwefe is just one of the millions of rural peasants, who suffer in silence as they try to fight poverty.

There is a saying in Chichewa – madzi akatayika sawoleka - do not cry over spilt milk. Nelson Mandela put it better than I could when he said, “the true signs of a man are not how many times he falls, but how well he rises up.” A lesson ought to be learnt from Tamwefe’s experience. The only safety nets that can prevent the rural poor, including Tamwefe, from getting deep into poverty trap is insurance. 

According to the recent livestock census carried out by Department of Livestock and Animal Health, the population of livestock in Malawi is growing at an average 15% per year. Dairy farming is one sub-sector of livestock husbandry that continues to grow and change lives of the rural poor. 

Recently, I came across an article in one the dailies, entitled, ‘Dairy cows change lives in Mzimba.’ The article gave a short but captivating testimony of how livestock pass-on programme was transforming lives of dairy livestock farmers in Mpherembe, Mzimba. With proceeds from sale of milk, beneficiaries were reported to have built modern houses with corrugated iron sheets, were able to send children to school and could easily afford full meals, three times a day. 

The part that I found enchanting was that beneficiaries had bought livestock insurance for their dairy cows, to the effect that whenever there is death or theft of cows, livestock insurers compensate the farmers with cash, which they use to replace stolen or dead animals. Because of insurance, Mpherembe farmers are able to keep on with the business.  What else would a villager ask for? Isn’t this what UN former Secretary General was referring to when he said that the world must empower the rural poor? 

Views from the top are that the rural poor need insurance for the same reasons as their urban counterparts. Stated differently, rural and urban dwellers face the same type of risks but the former find it tougher to fend for themselves whenever something catastrophic happens. Talk to us. We are here to serve you.