Life assurance business volume in the country has increased by 21.6% from Tsh135.7 billion in 2020 to Tsh165.0 billion in 2021, the Tanzania Insurance Market Performance Report from 1st January 2019 to 31st December 2021 by Tanzania Insurance Regulatory Authority (TIRA) said.
TIRA’s report also said that five insurers, that transacted life assurance business in 2020 experienced expansion of their business portfolios while one life assurance company recorded a decrease in business volume. In the year 2019 gross premium written for the life assurance business was Tsh119.6 billion.
“The largest growth in business for the year 2021, was recorded by Metro Life with a growth of 233.7 percent compared to the year 2020. BUMACO life recorded growth of 83.1 percent followed by Jubilee Life by 43.6 %, Alliance Life by 24.8 percent and Sanlam Life by 16.3 percent,” the report said.
It noted: “Another notable growth in life business was experienced in group life assurance with a growth of 15.5 percent from Tsh113.8 billion of premium recorded in the year 2020 to Tsh131.4 billion during the year 2021.”
“The individual life assurance had a growth of 53.6 percent from Tsh21.9 billion to Tsh33.7 billion from the year 2020 to 2021 respectively,” the report observed.
However, there was a decline of 55.4 percent in the volume of business for other life classes of business from Tsh57.0 million to 25.4 million in year 2020 and 2021 respectively.
The report went on to say that the growth of the life assurance business was mainly attributed to an increase in awareness following different awareness creation campaigns and sensitization programs. Further growth is anticipated as a result of the introduction of bancassurance agents which is among the sales channels distributing life assurance products.
“Life assurance portfolio comprises of different products namely term assurance, endowment assurance, funeral insurance and group credit insurance which constitute of the largest share in the market,” it said.
It adds: “Life insurance companies also exercise an important role in managing superannuation funds. Therefore, business is categorized into three groups Individual life assurance, Group life assurance as well as Superannuation or pension which is also known as other life assurance.”
The report pointed out that the evolvement of individual life products with saving elements and educational guarantees to beneficiaries has impacted the response of many individuals to purchase insurance for savings and protection of the assured in event of the death of the policyholder.
“Premium ceded for life assurance business increased by 26.4 percent from Tsh18.6 billion during 2020 to Tsh23.6 billion in the year 2021. Premium ceded was Tsh17.3 billion in the year 2019. The ceded premium includes reinsurance ceded to local insurers, reinsurers and foreign reinsurance companies,” the report said.
On Long Term Assurance Key Performance Indicators, the report said that life assurance companies earned an investment income of Tsh17.2 billion in 2021, being 1.8 percent lower compared to an investment income of Tsh17.5 billion recorded in the year 2020. Investment income recorded in the year 2019 was Tsh10.0 billion.
“Total income including net premium written, investment income, and other income recorded by life assurance companies amounted to Tsh160.6 billion in 2021 being higher by 17.7 percent compared to income of Tsh136.4 billion in 2020. In the year 2019 total income was Tsh114.2 billion,” it reported.
The report stressed that the total policyholders’ benefits amounted to Tsh95.7 billion in 2021, being higher by 39.5 percent compared to Tsh68.6 billion paid in 2020. Policyholder benefits paid in year 2019 amounted to TZS 50.6 billion.
Life insurers’ total income after deducting policyholders’ benefits and operational expenses stood at negative Tsh5.5 billion in 2021, representing a significant decrease of 180.6 percent compared to income of Tsh6.8 billion recorded in 2020, the report said.
The report revealed that life assurance business's gross premium income has increased by 21.6 percent, from Tsh135.7 billion in 2020 to Tsh165.0 billion in 2021. The Authority is committed to maintaining growth in life assurance business by providing conducive environment for investors in life assurance business.
Here’s what the Commissioner of Insurance Dr. Baghayo A. Saqware said
In his statement, while releasing a report that covered 2019, 2020 and 2021, Commissioner of Insurance Dr Baghayo A. Saqware said that the COVID-19 pandemic changed the business environment with serious socio-economic disruptions in the economy and industry.
“Despite the impact of COVID -19 and economic slowdown the Insurance industry wrote gross premium amounting to Tsh 912 billion for the year ended 31 December 2021, representing a nominal increase of 11 percent from Tsh824 billion written in 2020. Growth for 2020 was 1.2 percent,” Dr Saqware said.
He also said that the financial soundness of the industry was enhanced as a result of minimum capital improvement which increased by 4.3 percent from 2020 to 2021.
He disclosed that the total assets for the insurance industry increased by 8.4 percent from Tsh1,180 billion in 2020 to Tsh1,279 billion as of 31 December 2021. Total assets grew by 12.6 percent in 2020 compared to the value of total assets in 2019.
Investment Performance
Dr Saqware went on to say that investment assets increased by 7.8 percent from Tsh872 billion in the year 2020 to Tsh940 billion in 2021. During year 2019 investments assets were Tsh751 billion.
“Investments in Government securities increased significantly by 16.9 percent from Tsh273 billion in 2020 to Tsh319 billion in 2021. The increase was due to the high yield in the Government securities,” he said.
He concludes: “The major share of insurers’ investment assets comprised Bank Deposits including term deposit and cash and bank balances being 42.5 percent, 46.8 percent and 53.5 percent of total assets in 2019, 2020 and 2021 respectively.”
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