How Tanzania can improve its rate of insurance penetration
Old Mutual Limited regional managing director, Clement Chinaka. PHOTO | FILE
What you need to know:
- Tanzania’s insurance penetration is estimated to be below one percent of the gross domestic product (GDP)
Dar es Salaam. An insurance expert has advised that increasing awareness about industry products is a sure way to improve its contribution to the country’s economy.
Tanzania’s insurance penetration is estimated to be below one percent of the gross domestic product (GDP). But, the Old Mutual Limited regional managing director, Clement Chinaka, said the country has the potential to grow with more efforts needed in expanding awareness.
Old Mutual is the parent company of UAP which entered the Tanzanian insurance market in 2013 after acquiring 60 percent shareholding in the Century Insurance Company.
“There is a very low insurance penetration, however there is even more potential to catch up with the rest of the world. Because people own property, and loss of those things can cause damage to personal finance and that is where insurance comes in,” said Mr Chinaka who visited Tanzania this week.
The Tanzania Insurance Regulatory Authority (Tira) - speaking through its Financial Master Plans official - is targeting to reach 20.3 million adults with at least one insurance cover by 2030. It also targets to increase penetration to five percent of the economy.
Currently, around 6.47 million adults use insurance products, according to Tira.
On the other hand, UAP Tanzania’s managing director, Donald Muthe, said there were several areas to grow in the insurance sub-sector, including agriculture and small and medium enterprises which are “currently underserved.”
“Providing insurance coverage for agriculture is important because every country is now trying to be self-sufficient in food supply,” Mr Muthe said.
The UAP chief finance officer, Mr Nelson Rwihule, also indicated that the firm has been a pioneer in providing insurance for the agricultural sector regardless of the low awareness among farmers.
“But, we are improving as partners like banks who lend these farmers help to attach them with insurance products. As we grow more understanding, awareness also grows,” Mr Rwihule noted.
