Why insurance industry’s growth in Tanzania is slow

Dar es Salaam. Tanzania’s insurance market is not growing at the required level due to lack of updated actuarial studies to ascertain market trends for designing new products and techniques of attracting new customers, stakeholder says.

President of the Tanzania Insurance Brokers Association Mohamed Jaffer said that the last time for the country to carry out actuarial studies was in 2013 which indicates that available market data are outdated.

“We have to carry out actuarial studies to know the way forward for improving insurance business through designing new products. We expect that our co-operation with KPMG will assist to build capacity through training of experts and carrying out actuarial studies,” said Mr Jaffer as the association signed an agreement for co-operation with the audit firm KPMG.

According him, actuarial studies are the insurance surveys which are conducted to predict market trends, occurrence of risks such as accidents, business mortality rates and forecast of insurance growth.

He also said although the University of Dar es Salaam has been training experts in actuarial studies, still they lack enough capacity due to lack of professional practices through specialized companies.

Clarifying on why the actuarial study reports are outdated, Mr Jaffer said they are very expensive and there are no companies in the country to hire for consultancy services on actuarial studies.

“A single actuarial study for one company costs not less than Sh100 million. Kenya and South Africa have companies with capacity to undertake actuarial studies, but Tanzania does not possess actuarial company,” he said.

The head of Insurance East Africa-KPMG, Mr James Norman said that they were committed to assist the local insurance companies to train experts so that the country can possess many experts with capacity to conduct actuarial studies.

“KPMG is committed to support Taba for the country’s growth of insurance market and businesses. We foresee big insurance business in Tanzania for the next two years. W gave strong expertise in product design, insurance business management and industry ethics,” said Mr Norman.

According to him, there is huge potential for development of insurance industry in the country but the missing link is capacity to transform the industry and maximize the use of such potential resources.