Tanzania gets second local reinsurance company
What you need to know:
- Grand Re becomes the second local reinsurance company joining Tanzania Reinsurance Company (TanRe) whose 45pc stake is owned by pension funds
Dar es Salaam. Newly registered reinsurance firm is determined to cut Tanzania’s dependence on foreign firms for covering local insurance companies.
Reinsurance allows local insurance companies to share risk by purchasing insurance policies from other insurers to limit their own total loss in case of a disaster. Grand Re becomes the second local reinsurance company joining Tanzania Reinsurance Company (TanRe) whose 45 percent of its shareholding is owned by pension funds.
By 2019, Tanzania had accredited 17 reinsurance companies but only one was local, creating the possibility that most businesses went outside the country.
“We will continue to create a conducive environment for investment so that more companies can come to the country. In order for a foreign company to invest in reinsurance it must have a capital of Sh9 billion,” said Tanzania Insurance Regulatory Authority’s (Tira) licensing and marketing manager Hilard Maskini.
He said the increasing number of reinsurance firms is a good step in ensuring the risks are retained locally. A Tira report shows that reinsurance recorded premiums worth Sh329.1 billion equivalent to 50 percent of all the general premiums, during 2020.
Grand Re Group managing director Tatenda Katoma said the firm will develop local skills and serve the local market.
“Before Grand Re, there was only one reinsurance company in Tanzania and as a result, more reinsurance premiums were exported. That is really draining the forex of the country,” said Mr Katoma during a training session of the local experts.
He said goal is to create Pan African reinsurance companies that are able to tell specific products suitable for the continent.
“Our aim to bridge that gap. We deployed capital and full-fledged capitalised. We’ll increase underwriting capacity locally and improve the retention level of premiums that will intend to assist the country in terms of reducing the amount of forex that used to pay premiums outside that one is the major reason why we have opened the office in Tanzania,” he said.
The firm has also offices in Botswana and Zimbabwe .
