AS the world currently witnesses rapid socio-economic changes, the contribution of the insurance industry to the national economy cannot to be underestimated.
Today the insurance sector continues to play a critical role in the country’s economy by providing the national underwriting capacity and mobilisation of financial resources.
It is also good news that the growth of insurance as an important sector is consistent with the growth of national economic activities. However, insurance penetration -- premiums as percentage of the Gross Domestic Product – still remains below one per cent, an indication that there is plenty of room for further growth.
Provision of insurance services in Tanzania is hampered by many challenges that contribute to low penetration in the quest to make the sector inclusive by attracting many players.
Few specific challenges which deserve mention include the changing legal environment in the industry, the emergence of technological disruption for customer centricity, the rise of fraud in the industry, the emergent needs of a more sensitive customer and the need to embrace innovation for change.
Other challenges are lack of awareness among the populace on the role and benefits of insurance, lack of strong market-led initiative to contain claims fraud and corruption, legal constraints that inhibit insurance uptake and the stiff competition on the growth of the sector, just to mention few.
In enhancing and strengthening the insurance business it is crucial for industry stakeholders to come together and seek solutions to problems bedeviling the sector’s growth in this changed operational environment.
The Tanzania Insurance Brokers Association (TIBA), the body charged with empowering members by enhancing skills, knowledge, and exposure and championing customer rights, should continue to seek collaborative partnership with the Tanzania Insurance Regulatory Authority (TIRA), the Association Tanzania Insurers (ATI) and other relevant government bodies, to put in place instruments for smoother insurance uptake.
Collaborative efforts among key industry players would lead to expansion of insurance and other financial products where they are needed most in Tanzania.
The insurance industry is poised to grow at a time when Tanzania’s economy is starting to show signs of real growth on the back of recovering global commodity prices.