- The bulk of Tanzania’s population is not under any form of cover with industry statistics putting penetration at 1.68 percent.
- Gross premiums hit $486 million last year from $388 million in 2021, the Association of Tanzania Insurers (ATI) says.
- As of May 2023, a total of 34 insurers including three reinsurance companies had presence in Tanzania.
Insurance saves lives. This was how Sicola Enock, a mother summarised Tanzanian’s Community Health Fund (CHF), a social welfare cover that was introduced in 2001 to help families in rural areas.
“When my husband got sick, we incurred many consultation fees before treatment. But, when we acquired the CHF, things changed. Now the health insurance serves more than ten family members,” Sicola added.
Sicola is part of about 15 percent of Tanzania’s population now covered CHF health insurance.
However, the bulk of Tanzania’s population is not under any form of cover. Latest figures show an insurance market experiencing a seismic shift.
According to provisional statistics from the Association of Tanzania Insurers (ATI), gross premiums hit $486 million last year from $388 million in 2021.
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The insurance industry in Tanzania
Some of the big players in Tanzania’s cover industry include Alliance Insurance, Britam Insurance, Jubilee Insurance, Sanlam General, Sanlam Life and Tanzindia Assurance. As of May 2023, a total of 34 insurers had presence in Tanzania, including three reinsurance companies.
Life assurance grew at a record 41.74 percent in 2022 attributable to increased product uptake through group schemes and marketing campaigns. According to 2019-2021 report by Tanzania Insurance Regulatory Authority, the sector is on a growth trajectory.
Life assurance business volume increased by 21.6 percent or $70 million in 2021 compared to $57 million realised in 2020.
Overall, insurance penetration remains very low with industry data showing 1.68 percent penetration in 2021. “The ratio slightly increased compared to a penetration of 1.55 percent in 2020 and 1.58 percent in 2019,” the report explained.
However, like others, the industry experienced a capital increase (4.3 percent, 2021), which enhanced the sector’s performance. Further, in 2021 and 2022, significant changes in the sector’s legal framework were introduced to enhance sector stability and consumer protection.
The ATI lauded the National Insurance Corporation (NIC), Strategis Insurance, Alliance Insurance, Jubilee Insurance and Sanlam Life for their performance.
ATI chairman Khamis Suleiman said, “the market has grown by almost 25.5 percent. This is an indication we are heading in the right direction.”
Tanzania’s economic growth is on average 5.2 percent, a trend that is also boosting the demand for insurance, according to the ATI chairman.
The authority argued that the construction sector, through ambitious government projects, including the standard gauge railway (SGR) and revival of other delayed projects, have been critical in powering the insurance industry.
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Eliminating insurance fraud
Tanzania’s Financial Master Plan 2030 projects that the subsector will contribute 5 percent to the GDP with an ambitious 50 percent penetration.
The country’s insurance regulator is rolling out controls to sustain the sectors growth into the future. Part of the measures are meant to eliminate fraud and foster fair competition in the business.
Over the past years, Tanzania saw growth in the telecommunications sector, an expansion that benefits communities’ payment processes and communications.
Riding on this development, insurance firms such as Sanlam are collaborating with mobile network operators such as Tigo Tanzania to offer tailored services.
Insuring new smartphones
In 2021 for instance, Tigo partnered with Sanlam to insure smartphones. The service involved insuring new smartphones purchased from Tigo shops across Tanzania, for loss, accidental damage, and theft.
Insurance companies are adept at the adaptation and market shifts. Sanlam is now expanding through community-related networks by easily influencing the uptake of services and products.
Toll-free numbers, marathons competitions and influence deployment are core marketing angles that companies are using to promote services.
NIC is now adopting new approaches related to sensitisation and consumption. The state-owned company is currently executing a nationwide street-by-street activation dubbed “NIC-Kitaa”.
“NIC Kitaa is a project we developed to educate people and offer our insurance services and products. We want these services to be closer to our clients and this project the good action,” said Karimu Meshack, NIC Director of Marketing and Communications.
According to the NIC Communication director NIC seeks to achieve ambitious goal of 50 percent insurance penetration.
Rebuilding market trust
“Additionally, we have observed penalties and public exposure for insurers who have not operated in accordance with the policies. Due to the common concerns that insurers are not paying claims, this has helped to rebuild market trust,” Insurance industry expert Jumanne Mbepo told The Citizen.
Moreover, groundbreaking insurance services are now featured in the Tanzania space. Earlier this year, crop insurance was introduced by a fertiliser manufacturing company, Yara Tanzania, in collaboration with Jubilee Insurance.
The digital-based cover comes to the aid of thousands of farmers across Tanzania. With the growing population and expansion of other aggregate subsectors such as the banking and telecommunication industries, Tanzania can see insurance penetration and take up rise.
