Tira set to introduce bancassurance regulations

Dar es Salaam. The Tanzania Insurance Regulatory Authority (Tira) is finalising regulations to guide bancassurance in the country.

Bancassurance, which entails the selling of insurance products and services by banking institutions, is largely operated in Tanzania without regulations and only a few lenders participate.

“The regulations will allow banks to sell insurance products across the country, and we hope this will make the market more attractive and competitive,” the Insurance Commissioner, Dr Baghayo Saqware, told The Citizen.

The move is part of efforts to stimulate the growth of the insurance sub-sector whose contribution to gross domestic product is estimated at below one per cent for now.

Last week, the regulator announced indicative motor vehicle insurance premium rates, restricting the minimum rate at 3.5 per cent to protect the industry.

Insurance premiums are forecast to increase by 11 per cent this year, up from Sh670 billion recorded in 2017. The regulator also targets market penetration to reach 50 per cent in the next ten years from the current 15 per cent of adults.

“A team of experts are currently working on the regulations for bancassurance, and we hope they will be rolled out before the end of the year,” said Dr Saqware.

“Banks are scattered throughout the country, and it is our hope that their network will help more people access insurance services. This is also an opportunity for the lenders to make money,” he added.

Dr Saqware said Tanzania will be the second East African nation to introduce bancassurance regulations after Kenya.

In another development, Tira will in November introduce insurance awards to encourage firms and stakeholders to continue to provide innovative and quality products.

“These awards will involve various categories of insurance stakeholders, including journalists who will report and write good stories that are aimed at improving the industry,” the authority said.