After 50 years in the market, NICO General Insurance is bringing Malawi’s insurance market into the 2020s.

In 1971 Malawi’s National Insurance Company Ltd, now NICO Holdings Plc, incorporated NICO General Insurance Company Ltd as a composite insurance company. Originally the firm was only a short-term division of its parent company, before being incorporated and then, later, being restructured as a stand-alone general insurance company in 2002. It has grown to become a true leader in the industry.

“NICO General is a current market leader in insurance in Malawi, commanding a 36% market share,” says Donbell Mandala, CEO of NICO General. “NICO General currently manages the biggest portfolio in Malawi, employs 93 members of staff and operates in four districts or cities. It is a subsidiary of NICO Holdings, which own 51% of NICO General and was founded in 1970, so have been in the Malawi market for 50 years.”

NICO Holdings Plc has an investment portfolio spanning from life insurance, pension services, hotels, real estate, banks, shopping malls, hospitals to telecommunication. The other 49% of the company is owned by Sanlam Pan Africa (SPA).

NICO General has set itself apart from the pack as a leading company in the sector, but as Mandala points out, differentiating yourself is a challenge in the insurance sector.

“Insurance is an intangible product, so the evidence of your quality is in how you pay out claims,” he explains. “We have a strong balance sheet that allows us to pay promptly.”

Indeed, NICO General’s balance sheet is the strongest general insurance balance sheet in Malawi. The company has been rated by the Global Credit Rating of South Africa (GCR) and has attained a claims-paying ability rate of AA for the 2021/22 financial year.

But a strong balance sheet is still only a part of the company’s offering. It has set itself the mission to provide innovative and general insurance products and services in niche markets and is committed to customer service excellence. It might be the leader in Malawi’s insurance market, but Mandala will settle for nothing less than world-class General Insurance products and services in Malawi. In achieving those stands, the company is driven by values of collaboration, professionalism, transparency, excellence, innovation, and integrity.

“Being a market leader, it’s our responsibility to drive how the market is operating,” explains Mandala. “We are engaging our regulator to ensure we meet the standards being set in other countries, not just in terms of innovations, but also regulatory protections, and how to protect the market as well. If the market falls, then everybody loses.”

A Volatile Climate

While the company certainly holds a strong market position, the market as a whole has been weathering increasing challenges.

“We’re facing a lot of challenges from the current economic and market environment,” Mandala admits.

Although the challenges the firm is facing also emerge from the environment itself.

“The biggest is inflated liability claims and the increase in weather-related claims due to the increasing climate conditions around the world,” Mandala says. “We are making settlements on a regular basis, and customers are bringing in bigger claims.”

It is not a challenge that will be going away in the foreseeable future, and one that may get more severe, so NICO General is working to adapt.

“Obviously, we have to adapt to how the market is changing,” says Mandala. “What we are doing now is adapting our whole model to predict asset claims when they arise. We are pricing our products properly to ensure we create a buffer to pay for any claims. The other solution is managing the process of putting up excesses to limit what you are paying for.”

NICO General is able to adapt rapidly to large shifts in the economic environment like this thanks to a pool of expertise unparalleled in the country.

“We have 93 members of staff and being, an insurance company, we look for professionals, some come to us, but many are trained in-house,” Mandala tells us. “We have close to 40 chartered insurers to ensure we bring quality to the market. We have a mix of experienced staff who have been here for about 25 years as well as upcoming talent. Our mix of experienced and innovative young staff gives us an edge to develop new products and solutions. We command a great number of qualified employees at chartered accountant level.”

Promoting Malawi’s Growth

As well as supporting itself through these challenges, NICO General’s parent company, the NICO Group, continues to serve an essential role in Malawi’s growth and development through its corporate social responsibility drive. The Group has sponsored activities in health, sports, education, and other sectors of national importance in all its operating countries.

“Most of the projects we handle are carried out within the NICO Group, with six companies, each with different projects,” Mandala says. “A critical project we have been engaged in recently is the construction of a primary school. We have also invested in many different safety projects. It all depends on the needs of the community and the country.”

Not surprisingly, over the last couple of years a big part of Malawi’s needs have been due to the outbreak of the Covid-19 pandemic. In 2020 the NICO Group took part in a range of industry initiatives to fight the spread of the pandemic.

To support the Government’s efforts in responding to the pandemic, the NICO Group has committed MK100 million to anti-Covid efforts. It is a donation that is driven by the Group’s values as a responsible and responsive corporate citizen.

Looking forward, NICO General is planning to take Malawi’s insurance market to the next level- the digital arena.

“It’s taken too long for our market to add digital solutions,” Mandala insists. “This year we are adding that to our portfolio. Our brokers will have a portal to access our system, check claims and enquire for a quotation. We are working on a solution to be able to show clients our modelling and allow them to pay monthly. This might seem outdated, but it has not happened yet in Malawi, and we are the first to be able to do it.”