Dar es Salaam. Tanzania Insurance Regulatory Authority (Tira) suggested the review of taxes on insurance premiums as part of the solutions to boosting the growth of the industry and increase its contribution to the economy.
Tira commissioner for insurance Musa Juma said various taxes imposed by the government increase operating costs and ultimately the burden goes to the consumer and it becomes more expensive for a person to buy insurance.
“So, if something is done in insurance premium tax, it could help in one way or another and more companies are able to produce many products that are affordable,” he argued.
Dr Juma was speaking during the Mwananchi Communications Limited (MCL) symposium on the financial sector during the 60 years of independence of Tanganyika themed: Growth, challenges and future of the financial sector.
He mentioned another challenge as product innovation. There is a lot of work to be done to have products that meet the needs of the people. “Some see the products available in the market are not theirs. So, there is a need for product development work that is guided by professionals so as to make those products bring value in the market. There is a shortage of those professionals experts.”
He also hinted on the capital challenge facing some insurance firms something that hurts the quality of the products they provide, particularly in paying claims to clients. “Capital is a very important factor. There is a need to look at how capital can be obtained using capital markets and other means,” he said.
Meanwhile, he said plans were underway to introduce Islamic insurance known as Takaful that follows the Sharia principles, with the aim of accommodating the need of people who have interest in the area and ultimately the penetration will increase.
“Our aim is to ensure by 2030 at least 50 percent of the population is utilising at least one product.”
However, he challenged insurance firms to introduce products that will accommodate clients from all walks of life, adding there is general a feeling that insurance is only for people of certain income brackets.