Why insurance premiums hit 1.2tri/-

Why insurance premiums hit 1.2tri/-
Why insurance premiums hit 1.2tri/-

Africa-Press – Tanzania. TANZANIA : TANZANIA’S insurance sector is growing by leaps and bounds at an average of 12.8 per cent annually, with gross premiums passing the 1tri/- mark, thanks to the establishment of among others insurance consortiums and heightened education awareness.

The gross premiums reached 1.2tri/- in 2022 from 691.9bn/- registered in 2018, while the insurance sector’s contributions to the Gross Domestic Product (GDP) grew from 0.56 per cent in 2020 to 1.68 per cent in 2021

Speaking during a meeting with editors organised by the Treasury Registrar Office in Dar es Salaam, on Monday, Tanzania Insurance Regulatory Authority (TIRA)’s Commissioner of Insurance, Dr Baghayo Saqware said that the authority has succeeded in establishing the Agricultural Insurance Consortium as well as Oil and Gas Insurance Consortium.

“The contribution of insurance sector to the GDP rose from 0.56 per cent in 2020 to 1.68 per cent in 2021, as well increased dividends paid to the government by paying a total of 2.9bn/- from July 2022 to June 2023,” he said, insisting the authority’s objective is to have in place a competitive insurance market, which observe professionalism and integrity.

On TIRA’s achievement of the agricultural insurance consortium, Dr Saqware said that the aim is to ensure the effectiveness of the implementation of the National Agricultural Insurance Scheme (NAIS) and increase the capital capacity of the insurance market in the country and protect the industry against agricultural sector disasters.

“The benefits and expectations of the agricultural insurance consortium include increasing the availability of capital needed and used in the payment of compensations and insurance claims in the agricultural sector,” he pointed out.

He said the agricultural insurance consortium is formed by 15 companies that are registered in the country and three regional companies namely Tanzania Reinsurance Company (TAN-RE), Africa Reinsurance Corporation (Africa Re), and PTA Reinsurance Company (ZEP-RE). He said the capital of 300bn/- has been set aside to protect the agri-sector from risks.

Likewise, the commissioner said that the consortium is accelerating the implementation of the national plans and strategies including the Agricultural Sector Development Programme (ASDP II), Financial Sector Development Master Plan (FSDMP-2030), National Five-Year Development Plan (FYDP and the implementation of the ruling party CCM’s election manifesto (2020-2025).

Dr Saqware noted that several Tanzanian insurance companies recently established a consortium for insuring large and valuable projects in the country without having to rely on foreign insurance companies.

In fact, a total of 22 local insurance companies joined hands to create a fund that will cover the risks of large projects, particularly for investment in the oil and gas sector, namely Insurance Consortium for Oil and Gas. The consortium is entitled to retain not less than 45 per cent of the fees resulting from gas and oil projects.

Dr Saqware reiterated that the move to have a special consortium for oil and gas is to join the forces of insurance companies, so that they can protect projects against disasters together as the muscles of liquidity and capital become stronger.

“All energy risks from Tanzania including risks from the Liquefied Natural Gas (LNG) project will be insured through the Tanzania Oil and Gas Insurance Consortium,” he further said.

In addition, the insurance commissioner said that authority has continued to advise the government in various matters including the area of mandatory insurance, State property insurance and Universal Health Insurance (UHI).

In the same vein, TIRA continues with its strategy of providing education to the public by involving all stakeholders with the goal of reaching 80 per cent of all Tanzanians aged 18 and above come 2030. So far, he said only 12 per cent of Tanzanians are covered by various insurance services.

“The authority continues with the implementation of the education and awareness strategies for ministries and public institutions to implement the Insurance Act Chapter No. 394 of 2009 and Procurement Act No. 7 of 2011,” Dr Saqware pointed out.

Explaining further, the commissioner said that the authority has continued to supervise insurance companies to ensure that they pay claims and rightly compensate the eligible in a timely and fair manner.

“We will continue to monitor the performances of the insurance companies for the benefit of the citizens and investors in the country,” he insisted.

He added: “The payment of claims and eligible compensation for insurance customers has reached 95 per cent and that means complaints have greatly been addressed in the sector. For instance, payment of ordinary insurance claims increased by 10.1 per cent from 301.9bn/- in 2021 to 332.09bn/- in 2022.”

Dr Saqware said that claim payments and life insurance benefits increased by 29.3 per cent from 95.7bn/- in 2021 to 123.71bn/- in 2022.

TIRA is a government institution established under Insurance Law No. 10 of 2009, to carry out the duties of managing the market and developing the insurance business in the country and issues related to insurance in accordance with the country’s law.

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