Press reports have it that total profits in Tanzania’s insurance industry rose by a relatively whopping 46.9 percent in the 2018 year of business involving general insurance.
The was no doubt attributed in large measure to the increase in gross premiums written, which rose from Sh637.1 billion in 2017 to Sh691.9 billion in 2018.
In any case, general insurance – which is ‘non-life’ insurance, covering the likes of automobile and homeowners – constitutes the lion’s share of the insurance premiums in Tanzania. The sub-sub-sector grew by 5.6 percent, rising from Sh556.3 billion in year-2017 to reach Sh587.6 billion in 2018.
As revealed in these pages yesterday, 13 of the 26 companies which deal in general insurance together made a total of Sh27.149 billion in profits in 2018. This was a goodly Sh8.668 billion more than what they registered in profits in the previous year.
As of December 31, 2018, the Tanzanian insurance industry had a total of 31 insurance companies – including a reinsurance one – 109 insurance brokers (compared with 115 brokers in 2017), 635 insurance agents (c.f. 596 in 2017), and 55 loss assessors & adjusters (c.f. 54 in 2017).
In other words, the industry has been growing steadily over the years – doing so not only in the numbers of insurance operators, but also in premiums written and profits reaped.
Details of all this are available in the ‘Annual Insurance Market Performance Report for the Year Ended December 31, 2018’ by the Tanzania Insurance Regulatory Authority (Tira).
But – according to the chairman of the Tira board, Dr Yamungu Kayandabila – the growth overall is generally due to what he calls “good regulation of the sector, as well as the starting of new products such as ‘bancassurance.’ This later is, of course, the concept of selling insurance products and services by banking institutions as well.
More education needed on insurance benefits
Dr Kayandabila also says the industry already offers a range of growth and expansion opportunities in agriculture, mining, aviation, tourism and the oil and gas sectors of the economy.
But, when you get down to brass tacks and focus on the functional: exactly who has been benefiting from the insurance industry, pray – apart from the business operators themselves?
Even insurance policy holders and other potential beneficiaries ceaselessly complain about the trials and tribulations they are put through when it comes to claiming the benefits for which they were insured – and to which they are rightly entitled.
Indeed, the uptake of insurance products and services in Tanzania is still very low, relatively speaking. On analysis, year-2018 data showed that insurance penetration in Tanzania was less than one percent – compared to three percent in Kenya – and 13 percent in South Africa.
Also, the industry contributes less than one percent to Tanzania’s nominal GDP, the latter estimated at $62.22 billion in 2019.
Hence the dire need for increased education/sensitization among Tanzanians to the available and burgeoning opportunities in the country’s insurance industry. This would enable the people and the national Economy to benefit more fully – and as a matter of course – from what is arguably the fastest growing part of the financial sector.
Education, however, should also be coupled with the insurance companies’ increasing innovation on how to provide products and services which are affordable to all segmenta of Tanzanian society.