TANZANIA'S insurance market has registered a steady growth over the last 10 years, reflecting 300 per cent increase in premium income from 34.5bn/- in 1997 to 115.4bn/- last year, reports show.
And according to the Chairman of the National Insurance Board (NIB) Mr Peter Ilomo, the market last year grew by 18 per cent in gross premiums written compared to the previous year's performance.
He said in Dar es Salaam that during the year under review, the Tanzania insurance industry had a total of 28 insurance companies including one reinsurance firm, 84 insurance brokers, 453 insurance agents and 33 loss assessors and adjusters.
He was speaking during the 16th Annual Insurance Day in Dar es Salaam yesterday, He said that during the year under review, the Tanzania insurance industry had a total of 28 insurance companies including one reinsurance firm, 84 insurance brokers, 453 insurance agents and 33 loss assessors and adjusters.
"From an investment point of view, general insurers attained investment income amounting to 9.5 per cent of net premium earned in 2012, having decreased compared to an investment income of 17.9 per cent of net premium earned in 2011," he said.
Speaking at the event, Deputy Minister of Finance Ms Janet Mbene said that insurance sector provides the much needed capital for long term investments and infrastructure.
The Deputy Minister used the opportunity to reiterate the government's will to continue giving a conducive environment for all investors in the insurance sector for enabling them to come up with appropriate covers and packages that suit to majority of Tanzanians.
She said that insurance sector provides the much needed capital for long term investments and infrastructure. "In addition to its core function of helping corporate and households manage the risks. The role of the insurance sector in economic growth is moreover complementary to that of banks and non financial institutions in many respects," she said.
She noted that as a result, sector served as an important function of financial deepening alongside banking and insurance also facilitates the purchase of long term assets which are always financed by the banking industry.
Ms Mbene added that the financial stability in the insurance industry to some degree is in fact influenced by the same foundational factors as those required by the banking and financial institutions. "These factors include; stability in the macro-economy, customer due diligence and an efficient regulatory infrastructure,' she explained.
She further said that the increases of trade and investment that require insurance would enhance the demand in the sector and provide opportunities for Tanzania to widen the scope of domestic demand and attract financial inflows into the industry.
Ilomo said that despite the various challenges facing the insurance industry, the sector has good prospects for growth and improvement in the future for the benefit of all stakeholders. Following the enactment of the Insurance Act of 1996, and thus liberalizing of the industry, local and foreign private players were allowed in the country.
Recently, the Commissioner of Insurance, Mr Israel Kamuzora said insurance companies grew from two to 17, including one re-insurance firm, while brokers rose to 58 from one. There are around 400 insurance agents operating in the market at present.
"The contribution of the industry to the economy had also been satisfactory during the last decade," he said. Mr Kamuzora said the ratio of gross premium to gross domestic product (GDP) is currently at 1.0 per cent, which compares favourably well with other sectors of the economy such as mining which is at 2.3 per cent.
"Our projects are that the contribution of insurance to GDP will double by the end of 2009," he said. The insurance industry is regulated by the Insurance Act, 2009, which was preceded by the Insurance Act of 1996, following liberalisation of the sub-sector.
The insurance business in Tanzania was nationalised in 1967, after the Arusha Declaration, which was then the country's blue-print of economic, social and political development, under which the commanding heights of the economy were placed under the hegemony of the state.
Between 1967 and 1996, the National Insurance Corporation (NIC) and Zanzibar Insurance Corporation (ZIC) dominated the scenario in the domestic insurance market. The latest TIRA market report shows that Tanzania insurance industry grew by 20.0 per cent to 344.7bn/- in 2011, from 287bn/- in 2010.