Why uptake of insurance services in Tanzania rose two-fold in the last year three years

Dar es Salaam. The Tanzania insurance market has witnessed a remarkable surge in recent years, driven by increased awareness and a favourable regulatory environment, according to the Tanzania Insurance Regulatory Authority (Tira).

The industry regulator says the number of policy holders in Tanzanians has more than doubled since 2021, reaching 13.8 million as of September 2024.

This growth has propelled insurance penetration to 2.01 percent last year, up from a mere 0.56 percent three years ago. Tanzania is now approaching Kenya’s insurance contribution to GDP, which stands at 2.5 percent.

The Commissioner for Insurance, Dr Baghayo Saqware, attributed steady growth to the government’s policy reforms aimed at facilitating business and boosting the sector.

“Although we have made commendable progress, we have not yet reached our ultimate goal. I am confident that with the continued efforts of various stakeholders in raising awareness and developing targeted products, we will achieve our target of a three percent penetration rate by 2030,” Dr Saqware said.

He was speaking at the 27th Annual Insurance Day, organised by TIRA in collaboration with the Insurance Institute of Tanzania (IIT) in Dodoma recently.

Dr Saqware highlighted the fact that the insurance market is growing at an average annual rate of 12.8 percent.

Over the past five years, from 2018 to 2022, the industry’s gross premiums rose from Sh691.9 billion to approximately Sh1.2 trillion.

In the financial year 2022/23, around 95 percent of all insurance claims were settled, while the remaining five percent faced delays due to incomplete documentation or fraudulent submissions.

The Financial Sector Development Master Plan has set ambitious targets, aiming to have 10 percent of retirement plan beneficiaries using pension products by 2029/30.

Other objectives include introducing ten new insurance products into the market, achieving 90 percent health insurance coverage, increasing insurance literacy among 80 percent of the population, and ensuring that at least 50 percent of Tanzanian adults use at least one insurance product.

“To meet these targets, we must develop effective strategies, adhere strictly to existing laws and regulations, and enhance our use of innovation and technology,” Dr Saqware emphasised.

During the event, managing director of the National Bank of Commerce (NBC) and the chairperson of the Tanzania Bankers Association (TBA), Mr Theobald Sabi, delivered a keynote address highlighting the need for greater technological integration in the insurance sector.

He noted that while progress has been made, there remains significant potential for growth through digital technologies.

Mr Sabi advocated for increased penetration by leveraging digital platforms to reach underserved populations, such as farmers and low-income groups, particularly women.

He stressed the importance of partnerships with mobile platforms to make insurance more affordable and accessible, especially in remote areas.

“Insurance companies are collaborating with mobile money providers to facilitate premium payments and claims via mobile wallets, which enhances accessibility in rural areas,” he said.

NBC is working with ten insurance companies to offer a broad range of services, and its mobile banking platform simplifies the purchase of insurance covers.

He also called for strategic alliances with insurers specialising in weather-related and agricultural insurance to better serve the agriculture sector.

“Digital solutions present a significant opportunity for growth. By embracing these technologies, we can substantially increase insurance demand,” Mr Sabi added.

In her official opening remarks, the minister for Community Development, Gender, Women and Special Groups, Dr Dorothy Gwajima, urged TIRA to engage community development and welfare officers to educate citizens about the importance of insurance.

She noted that many Tanzanians, particularly in rural areas, lack awareness and access to media, making community officers crucial in disseminating information.

“Community officers have daily interactions with rural populations and can effectively promote insurance,” Dr Gwajima said. She emphasised that farmers, who often return home too exhausted to engage with media, would greatly benefit from information provided by these officers.

The introduction of innovative strategies and enhanced community engagement is expected to further drive the growth of Tanzania’s insurance sector, aligning with broader national goals and contributing to the overall economic development of the country.