Tira considers regulating insurance premium rates

Dar es Salaam. The Tanzania Insurance Regulatory Authority (Tira) will soon introduce new regulations that will allow suspension of an operator who undercut premium rates in effort to ensure the market sustainability. Premium undercutting is a practice where an insurance company secretly offers lower premiums to gain a competitive advantage and protect its market share.

However, the practice is said to be disruptive to the industry which penetration is still low.

“Let’s expect to have a market with a database that will deal with people who go against the procedures,” said Tira director general Dr Baghayo Saqware, during a meeting with stakeholders in Mbeya.

The meeting aimed at receiving the opinions of insurance stakeholders who gathered from the southern highland regions in which he responded to various concerns raised by the participants.

Speaking in the meeting, Bumaco Insurance representative, Mr Boniphas Mangomale said the reduction of rate in the field still exists but bringing evidence is sometimes a challenge. “When you tell customers the cost of insurance, they go to another company and are given lower rates. I don’t know how the authorities are dealing with this issue to ensure fair ground,” he said.

The deputy chairman of the Insurance Agents Association of Tanzania (IAAT) southern highlands Mr Evaristo Kipangula thanked the authority for taking the initiative to visit stakeholders across the country which he claims brings prosperity to the sector.

However, he said there are more than 1,200 insurance agents and asked the authority to take actions against some agents who spread negative messages to customers.

“We are professionals and we are registered with the authority. It is not fair for others to ignore what we are doing. Instead, everyone should do their work,” he said.

Responding to that, Dr Saqware encouraged the insurance agents and asked them to continue working hard because the government relies on them to distribute insurance products to the wider community. “Let me assure you that we respect you and we need more agents because it helps in increasing employment. I warned some bank insurance agents who insult other service providers. The insurance market is very wide and everyone should respect each other,” he emphasised.