DAR ES SALAAM: TANZANIA’S insurance sector is experiencing significant growth, signalling a pivotal moment in both the industry’s evolution and the broader economy. The 2023 Annual Insurance Market Performance Report highlights a promising upward trend, underscoring the resilience and growth potential of the industry.
The report, unveiled in Dar es Salaam recently, reveals that premiums, a key indicator of market health, increased by 7.4 per cent, rising from 1.15tr/-in 2022 to 1.24tr/- in 2023.
This growth not only indicates a higher uptake of insurance but also suggests that more Tanzanians are recognising its value. Even more remarkable is the 30.4 per cent jump in total insurance registration, which soared from 201.3bn/- in 2022 to 262.5bn/- in 2023.
This surge signals a growing understanding of the importance of insurance among Tanzanians and a positive shift in public perception. Deputy Minister for Finance, Hamad Chande, attributes this success to the government’s strategic efforts to create an enabling environment for the sector.
These initiatives align with Tanzania’s long-term development plans, including the 2029/2030 Financial Sector Development Plan and the 2021- 2026 Five-Year Development Plan.
Through public awareness campaigns, expanded insurance products and improved customer service, the government, in collaboration with the Tanzania Insurance Regulatory Authority (TIRA), has fostered a thriving insurance market.
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Looking ahead, Tanzania’s insurance market is set for even more growth, driven by key factors like digital transformation, legal and regulatory improvements, climate risk coverage and financial inclusion, according to CPA Moremi Marwa, Chairman of the National Insurance Board (NIB).
He expressed optimism about the sector’s future, emphasising the importance of these drivers in shaping a market that not only offers financial security but also contributes to the country’s sustainable economic development.
“The digital shift, along with advancements in legal and regulatory frameworks, will strengthen Tanzania’s insurance landscape,” Marwa said.
“We’re also focusing on climate risk coverage and expanding financial inclusion, ensuring that we meet the diverse needs of the Tanzanian population.” He also highlighted the NIB’s commitment to creating a dynamic, transparent and inclusive insurance market. “Our goal is to develop a sector that not only serves individuals and businesses but also plays a crucial role in the country’s overall prosperity.” Dr Baghayo Saqware, TIRA’s Commissioner of Insurance, shared impressive figures showing that the number of insurance providers in the country grew by 33 per cent, from 1,165 in 2022 to 1,549 in 2023.
This expansion reflects the increasing interest in the insurance sector and the confidence investors have in Tanzania’s economic prospects. Employment in the sector also saw a notable rise, with the number of people employed in Tanzania’s insurance industry growing by 34.1 per cent, from 4,173 in 2022 to 5,595 in 2023.
This growth is a testament to the insurance sector’s increasing contribution to the economy, providing more jobs and creating greater economic value.
Dr Saqware also pointed to the sector’s growing financial resilience, with insurance assets increasing by 26.8 per cent and investment assets rising by 9.3 per cent, from 1.17tr/- in 2022 to 1.28tr/- in 2023.
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Claims paid by insurers also increased by 25.5 per cent, from 389bn/- in 2022 to 488.2bn/- in 2023, reflecting both the growing base of insured individuals and the industry’s ability to handle claims. One of the most notable developments is the improvement in retention rates for general insurance, which saw an increase from 49.4 per cent in 2022 to 55.5 per cent in 2023.
This 12.3 per cent rise indicates that local insurance companies are becoming more capable of absorbing risks, reducing their reliance on foreign reinsurers. However, life insurance retention saw a slight dip, from 85.7 per cent in 2022 to 83.2 per cent in 2023, signalling a need for stronger customer retention strategies in this segment.
The insurance sector’s contribution to Tanzania’s GDP grew to 2.01 per cent in 2023, up from 1.99 per cent in 2022. While the increase may seem modest, it reflects the growing role the sector plays in supporting the national economy.
The report also highlighted the importance of Takaful insurance, which complies with Islamic principles. Zanzibar’s Chief Secretary, Engineer Zena Ahmed Said, emphasised that promoting Takaful could help attract a significant portion of the population hesitant to engage with conventional insurance due to religious beliefs.
By embracing Takaful, Tanzania can tap into a previously underserved market, further expanding insurance coverage and financial inclusion. The future of Tanzania’s insurance market looks bright, with steady growth in premiums, expanded coverage, rising employment and improved risk absorption.
TIRA’s strategic efforts have laid a strong foundation for the sector’s continued development. However, the future success of the market will depend on innovation, inclusivity and building trust among the population.
Technological advancements and changing consumer behaviour are shaping the future of the industry. Digital technologies are transforming Tanzania’s insurance sector, enhancing efficiency, reducing costs and improving customer experiences.
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Insurers are leveraging these advancements to offer more accessible and efficient services, expanding their reach and providing more tailored products to meet evolving consumer needs.
The sector remains highly competitive, with the top six insurers by gross premiums written (GPW) in 2023 being Sanlam Life, Alliance, Strategies, National Insurance Corporation, Jubilee Allianz and Heritage. Together, these companies accounted for over half of the total GPW, amounting to 636bn/-.
As new entrants enter the market, competition will intensify, creating opportunities for insurers to strengthen their positions. Tanzania’s insurance market also faces growth opportunities through the introduction of the Universal Health Insurance Act (UHI Act) in 2023.
This legislation is expected to increase access to health insurance, particularly for underserved populations, creating new opportunities for insurers in both urban and rural areas.
Investment in digitalisation will continue to play a pivotal role in the sector’s growth. Embracing digital platforms allows insurers to expand their reach, enhance customer experiences and capitalise on rising consumer spending and economic development. There is also substantial potential for innovation, particularly in areas like ICT and agricultural insurance, which could help insurers tap into underserved markets and create new revenue streams.
The introduction of mandatory insurance covers under the Finance Act No 5 of 2022 such as for imported goods and commercial buildings is expected to boost insurance penetration in Tanzania.
This regulatory change will expand the market and drive demand for insurance products, particularly in the commercial and infrastructure sectors.
In conclusion, the 2023 Insurance Market Performance Report paints a positive picture for Tanzania’s insurance industry, with significant growth potential driven by digital transformation, regulatory changes and shifting consumer preferences.
However, insurers will need to navigate challenges like supply chain disruptions and fierce competition to maintain their growth trajectory.
