NAIROBI, Kenya, Mar 25 – CIC Insurance Group has entered into a Sh300 million agreement with Malawi’s national cooperatives body to begin operations in the central African state.
The insurer is targeting Malawi’s co-operative movement that comprises 45 savings and credit unions with a combined membership of 110,000.
The terms of agreement was signed by CIC Insurance CEO Nelson Kuria and Malawi Union of Savings and Credit Cooperatives (MUSCCO) Limited CEO Sylvester Kadzola in Nairobi.
Under the agreement, CIC Insurance and MUSCCO will own 49 percent shares each in the new CIC subsidiary.
The group’s entry into Malawi’s market is part of its wider regional expansion strategy, which includes South Sudan and Uganda.
CIC Insurance plans to spend Sh1.2 billion to spread its wings to the three countries with operations in South Sudan set to begin next month.
“We are going out to the rest of Africa in partnership with co-operatives, in line with the international principle of co-operation among cooperatives,” Kuria said adding that they will also be targeting farmers in Malawi through their lobby groups.
“Now that we have agreed on the terms of partnership we will file the necessary documents with the Reserve Bank of Malawi which is the regulatory authority,” he added.
On his part, Kadzola said the entry of CIC Insurance into Malawi will help boost efforts to increase insurance penetration levels, which currently stands at below two percent. In Kenya, Insurance penetration is slightly above three percent.
“The potential for growth in the co-operative movement in Malawi is enormous and services like Sacco insurance will be a catalyst for the growth,” he said.