Dar es Salaam — The year 2020 was relatively good for insurance firms, with reports showing that a number of them registered a rise in profits despite the Covid-19 pandemic.
The Tanzania Insurance Regulatory Authority (Tira) has a total of 22 firms on its register that deal with general insurance business.
However, a look at the financial statements of eight of the country's ten largest insurance firms reveals a rise in profitability by Sh2.5 billion.
This represents a 14 percent rise in profits that the firms garnered in 2020 compared to what they recorded in 2019.
Jubilee, AAR, Reliance, Phoenix, Icea Lion, Heritage and Strategis reported a total of Sh19.822 billion in net profits during the 2020 calendar year, up from Sh17.313 billion that the firms made in 2019.
At the same time, firms dealing with life insurance seem to also have gone unhurt by the Covid-19 pandemic, with financial reports of four of the five life insurance firms showing a rise in profits.
The lion's share of the Sh8.278 billion combined profit for the four life insurance companies was, however, taken Sanlam Life Insurance.
In 2019, Jubilee, Sanlam and Alliance Life registered a total of Sh4.927 billion.
Analysts say the rise in profits was largely due to the fact that for almost the entire first half of last year, people were afraid of going to the hospital and instead, they preferred staying at home and using traditional remedies to any disease which they deemed to be a symptom of the Covid-19 pandemic.
"In short therefore shows just how people preferred traditional remedies in the fight against the pandemic.
"Instead of making regular visits to hospitals, people resorted to eating lemons and conducting steam inhalation at home," said chairman for the Association of Insurers Tanzania (AIT) Mr Khamis Suleiman
As for the general insurance business, he said, risks were minimized because people decided to set themselves apart from risky areas.
"For the general insurance, there were some risks that had been minimized. If for example you have cars then all are parked or you have a hotel and guests do not come, it is not easy to claim anything from an insurance firm," he said.
The Tira acting director for Planning, Research and Markets Development, Mr Muyengi Zakaria, said the profit growth was good news to the regulator and an indication that Tanzanians had taken precautions to protect themselves from the pandemic.
"Our duty remains that of creating a conducive environment for more companies to invest more in line with our National Development Master Plan 2030," he said.
He said the fact that people had taken covers from Covid-19 risks was among the opportunities for insurance companies.
"For instance, during the Covid-19 pandemic, a number of people aged above 60 decided to take short term covers to insure certain properties like houses to hedge their families against possible losses in case the unavoidable comes to happen," he said.
In its statement, Strategis Insurance's acting Group chief executive officer and chief executive officer for the Medical Division, Dr Flora Minja, said that - despite the impact of Covid-19 which disrupted businesses around the world - the annual gross written premiums grew from Sh55 billion in 2019 to Sh65 billion in 2020.
The robust growth was well above the average 15 percent growth per year that the company had since 2018.