Insurance sectors seen as key economic driver

DAR ES SALAAM: THE government has identified the insurance sector as a critical driver of economic growth, emphasising its role in safeguarding assets, mitigating financial risks and supporting investment, reflecting a strategic focus on strengthening sectoral contributions to national economic stability.

The government’s renewed emphasis on the insurance sector reflects its strategic importance in safeguarding assets and strengthening economic stability, positioning it as a critical driver of national growth. The effective insurance coverage protects property, reduces business risk and secures economic activities, thereby supporting investment and long-term development across the country.

This was underscored by the Minister for Finance, Ambassador Khamis Mussa Omar on Monday during a meeting held in Dar es Salaam with a delegation from the Tanzania Insurance Regulatory Authority (TIRA) led by the Commissioner of Insurance, Dr Baghayo Saqware.

The meeting focused on the development of the insurance sector and its prospects in Tanzania.

“The insurance sector serves as a key pillar of economic resilience by protecting citizens and institutions against disasters and various risks, while also acting as a catalyst for investment and sustainable development,” he said.

He emphasised that a robust insurance sector serves as a cornerstone for economic stability, enhancing investor confidence, protecting both public and private assets and mitigating financial shocks for citizens during crises— thereby reinforcing the sector’s strategic role in risk management and sustainable economic development.

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He commended TIRA for its continued efforts in serving the public interest in line with Section 5(1) of the Insurance Act, Cap. 394, which mandate the Authority to protect the rights of insurance stakeholders, provide public education, handle complaints and develop a safe, sustainable and resilient insurance market.

Presenting an implementation report, Dr Saqware said that TIRA has continued to regulate the sector professionally, enabling it to record an average growth rate of over 10 per cent during the past four years.

He noted that insurance premiums rose from 1.24tri/- in 2023 to 1.52tri/- in 2024, representing a growth of 20.2 per cent, while the sector’s contribution to the national Gross Domestic Product (GDP) increased from 2.01 per cent to 2.08 per cent over the same period.

Further gains across key performance indicators signalled strengthening sector fundamentals, as improvements in claims payments, registration of service providers and assets, investment flows, employment levels and the expanding pool of insurance beneficiaries pointed to increased market confidence and operational efficiency.

Despite this growth, the Authority continued to remit dividends to the Government, with 5.1bn/- paid in the 2024/2025 financial year compared to 3.5bn/- in 2023/2024, an increase of 68.6 per cent.

The discussions highlighted both persistent challenges and emerging opportunities within the insurance sector, analysing how structural gaps, market awareness, and regulatory reforms could shape strategies aimed at deepening public and institutional participation in insurance services.

Legal and regulatory frameworks were scrutinised for their capacity to support a resilient insurance sector, with analysts highlighting the necessity of ongoing reforms to ensure alignment with dynamic economic trends, technological advancements, and evolving market complexities, positioning regulatory modernisation as pivotal for sectoral growth and stability.

It is noted that updating insurance laws and regulations is not only essential for compliance but also for fostering innovation, enhancing consumer protection, and attracting both domestic and foreign investment, thereby creating a more competitive and sustainable insurance market.

The sector’s significance extends beyond risk protection, as it is highlighted that a robust insurance industry can enhance investor confidence, promote financial inclusion and stimulate capital formation, positioning it as a vital component of broader economic development strategies.

The meeting was also attended by the Deputy Commissioner of Insurance, Ms Khadija Issa Said, Assistant Commissioner for Financial Sector Development, Ms Dionisia Mjema and TIRA Quality Assurance Officer, Ms Irene Horera.