The penetration level of the insuranceand pension sectors in Malawi is low, but it seems adequateas compared with other countries in similar stages ofdevelopment. Concentration and costs are high, theregulatory framework is outdated or inexistent andsupervision is weak. An innovative pilot experience ofweather micro-insurance is a good example of private-publicpartnership to reduce vulnerability and extend benefits, butthe coverage is still low. The project faces severalchallenges, one of them being the need to invest in weathertechnology. Cost benefit analysis of public projects in thisarea should take into consideration the possible positivesocial benefits of income security for vulnerable ruralpopulation. The analysis needs to take into account thatpossibilities to increase micro-insurance penetration may beaffected by the level of education of farmers, as well astheir specific knowledge of insurance products and theirconfidence in insurance companies. Life insurance andprivate pension plans have an acceptable level ofdevelopment as substitute of the non-existing mandatorypensions for private sector workers, but they need astronger supervision and regulation to enhance theirbenefits. Rules should seek to promote portfoliodiversification, higher portability of pensions and old ageincome security through well defined benefit rules.
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