TANZANIA: THE financial and insurance services have registered highest growth of 17.1 per cent in this year’s quarter one signals a transformative period for the industry.
National Bureau of Statistics (NBS) latest quarterly GDP report shows that the financial and insurance services was followed by information and communication 13.4 per cent, transport and storage 7.6 per cent and electricity 7.6 per cent.
Others are accommodation and food services 7.2 per cent, public administration and defense 6.6 per cent, construction 6.4 per cent and others services 8.6 per cent.
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Orbit Securities Portfolio Manager and Head of Research and Investments Ammi Mwamunyi said the rapid expansion not only reflects a thriving economic environment but also underscores the impact of strategic moves by these institutions.
“The broader financial and insurance sectors are also showing promising signs of vigorous growth”.
“This rapid growth indicates a vibrant sector environment and highlights the potential for CRDB’s recent expansions to contribute positively to its financial performance,” Mr Mwamunyi said yesterday through weekly synopsis report.
The overall financial and insurance activities increased by 17.1 per cent in the first quarter of this year, up from 10.0 per cent recorded in a similar quarter last year.
The activity covers financial services, insurance and reinsurance, voluntary pension funding and auxiliary to financial services.
It also includes the activities of holding assets, such as holding companies, trusts, funds and similar financial entities.
Additionally, insurance services slowed down by 4.0 per cent in the first quarter compared to 10.1 per cent in the corresponding quarter last year.
The synopsis reveals that insurance penetration among businesses reliant solely on commercial insurers stood at a modest 0.68 per cent.
On the other hand, the inclusion of public insurers such as NHIF, NSSF, WCF and iCHF has significantly enhanced the overall insurance penetration relative to GDP, raising it to a much more substantial 1.99 per cent.
In 2022 a Tanzania Insurance Regulatory Authority (TIRA) report showed that increased insurance penetration means more businesses and individuals are protected against risks, contributing to economic stability and resilience.
Two largest commercial banks were handling approximately 89.3 per cent of the entire life bancassurance business, with the remaining share distributed among other entities.
NMB Bank led with the largest share at 52.4 per cent in 2022, followed by CRDB Bank, with 36.6 per cent during the period from July to September of the previous year, according to the TIRA quarterly performance report.
The report indicates that the total premium collected by agents for long-term bancassurance business amounted to 36.3bn/-, equivalent to 76.5 per cent of the industry’s gross premium.
Since its inception in 2019, bancassurance has allowed commercial banks to sell insurance services.
In the non-life bancassurance sector, three commercial banks managed 74.6 per cent of the total business, while the remaining 25.4 per cent was handled by other institutions, according to TIRA report.