Dar es Salaam. The insurance industry grew by 7 per cent to Sh660 billion in 2016 compared to the previous year, a new report shows.
It was quoted at Sh618.9 billion in 2015, according to the report dubbed ‘Annual Insurance Market Performance Report for the Year Ended 31st December 2016,’ which was launched last December.
The Tanzania Insurance Regulatory Authority (Tira) attributed the performance to its strong initiatives including, public relations, insurance week celebrations and capacity building for industry stakeholders. Also in a pipeline are supervision of the authority’s zonal offices operations and consumer education through seminars and workshops.
Tira, according to the report was and still is committed towards promoting micro insurance work for Tanzanians by launching the regional business case sessions in Mwanza and Iringa to create direct linkages with the rural communities. “Total volume of business, in terms of gross premiums written for both general and life assurance businesses, increased by 7 percent in 2016, well below by 80 per cent of the industry’s projected growth of 15 per cent, “ reads a report in part.
Report indicates significant improvement in performance in medical and health classes of insurance, with in 2016 alone a total of 702,598 members and 3,377,023 beneficiaries reportedly to have been covered by the National Health Insurance Fund (NHIF).
The Community Health Fund took the lead by covering 1,452,855 members and 8,717,130 beneficiaries.
During the period total contributions of NHIF amounted to Sh354.4 billion, with total benefits payment to the fund beneficiaries amounting to Sh218.7 billion. Going by the report figures, insurers’ total investments increased by 14 percent to Sh518.6 billion during the period under review compared to 2015.
The largest share of insurers’ investment assets comprised bank deposits, accounting for 47 per cent.
It was followed by government securities and real estate investments and shares, contributing 20.8 per cent, 16.1 per cent and 13.3 per cent, in that order.
Investments in related parties and other financial investments accounted for 1.8 per cent and one per cent respectively.
Meanwhile, insurers’ net worth increased by 9.2 percent to Sh268.1 billion compared to Sh245 billion at end of prior year. The country’s insurance penetration (premiums as a percentage of Gross Domestic Product (GDP) has remained largely at 0.7 percent during the last five years, 2012-2016.
This is attributed to parallel growth recorded in the national economy during the period under review. The contribution of the insurance companies to the wider Financial Sector GDP -premiums as a percentage of financial and insurance GDP, slightly decreased from 19 percent in 2015 to 18 percent in 2016.
Over the past ten years, the lowest ratio was recorded during 2016; while the highest ratio was recorded in 2014.
The insurance companies contributed to the government through payment of corporate taxes amounting to Sh10 billion in 2016 compared to Sh9.97 billion in 2015.
Other sources include Value Added Tax (VAT), Withholding Tax and Levies to the Government.
Apart from the tax benefits enjoyed by the government, insurance industry during the period was reportedly to have created jobs for more than 4,000 people.
Under the period of reference, the Tanzania insurance premium per capita- the ratio of insurance premium to country population, grew by 6.6 percent to Sh13, 807.7 in 2016 from Sh12, 946.84 in the previous year.
The total number of insurance companies registered under the Insurance Act, as at 31st December 2016 (including one reinsurance company, Tan Re) was 31.
Out of these, 24 insurance companies are privately owned with at least one third Tanzania citizen ownership, two companies are 100 percent state owned by the government, while five companies are 100 percent owned by Tanzanians.