Tanzania's insurance industry has witnessed substantial growth, with annual average growth rates of approximately 12.8 percent, driven by initiatives like insurance consortiums and increased public awareness.
The gross premiums collected in the sector reached an impressive 1.2 trillion Tanzanian shillings (TZS) in 2022, marking a significant increase from the 691.9 billion TZS reported in 2018. Moreover, the insurance sector's contribution to the country's Gross Domestic Product (GDP) expanded from 0.56 percent in 2020 to 1.68 percent in 2021.
Dr. Baghayo Saqware, the Commissioner of Insurance at the Tanzania Insurance Regulatory Authority (TIRA), made these revelations during a meeting with editors organized by the Treasury Registrar Office in Dar es Salaam on Monday. He attributed this impressive growth to several key factors, including the establishment of insurance consortiums and heightened public awareness of insurance products and services. TIRA has successfully set up the Agricultural Insurance Consortium and the Oil and Gas Insurance Consortium, aimed at bolstering the insurance industry's effectiveness and resilience in the face of sector-specific challenges.
"The contribution of the insurance sector to the GDP rose from 0.56 percent in 2020 to 1.68 percent in 2021, as well as increased dividends paid to the government by paying a total of 2.9 billion TZS from July 2022 to June 2023," noted Dr. Saqware. He emphasized TIRA's objective to create a competitive insurance market characterized by professionalism and integrity. The Agricultural Insurance Consortium, comprised of 15 local companies and three regional firms, namely Tanzania Reinsurance Company (TAN-RE), Africa Reinsurance Corporation (Africa Re), and PTA Reinsurance Company (ZEP-RE), has set aside 300 billion TZS to protect the agricultural sector against risks and strengthen the capital capacity of the insurance market.
Additionally, the newly formed Insurance Consortium for Oil and Gas, consisting of 22 local insurance companies, is poised to cover the risks associated with large-scale projects, particularly in the oil and gas sector. The consortium retains a minimum of 45 percent of fees generated from gas and oil projects. Dr. Saqware stressed that these consortiums are pivotal for pooling resources and enhancing liquidity and capital resilience to better safeguard major projects against unforeseen events."All energy risks from Tanzania, including those from the Liquefied Natural Gas (LNG) project, will be insured through the Tanzania Oil and Gas Insurance Consortium," he affirmed.
Moreover, TIRA continues to provide crucial advice to the government on matters related to mandatory insurance, state property insurance, and Universal Health Insurance (UHI). The regulatory authority is also committed to educating the public, to reach 80 percent of Tanzanians aged 18 and above by 2030. Currently, only 12 percent of Tanzanians are covered by various insurance services. TIRA is actively implementing education and awareness strategies to promote compliance with insurance laws and procurement regulations. Furthermore, Dr. Saqware emphasized that TIRA maintains strict supervision of insurance companies to ensure prompt and fair claims processing. In recent years, the sector has seen significant improvements, with a 95 percent rate of claim payments and life insurance benefits.
The insurance commissioner highlighted, "The payment of claims and eligible compensation for insurance customers has reached 95 percent, meaning that complaints have greatly been addressed in the sector. For instance, payment of ordinary insurance claims increased by 10.1 percent from 301.9 billion TZS in 2021 to 332.09 billion TZS in 2022."
TIRA, established under Insurance Law No. 10 of 2009, plays a pivotal role in managing and developing the insurance market in Tanzania, ensuring compliance with the country's insurance laws and regulations.