AfCFTA Offers Massive Opportunities for Tanzania’s Insurance Sector, PM Says

AfCFTA Tanzania Insurance Symposium 2022

From 30th November to 2nd December 2022 Arusha hosted the 1st Insurance Regulators Retreat for Africa under the theme: “Africa Insurance: Winning together in AfCFTA”.

The symposium was organized by the Africa College of Insurance and Social Protection (ACISP) in partnership with the Tanzania Insurance Regulatory Authority (TIRA) and the Association of African Insurance Supervisory Authorities (AISAA).

The purpose of the event was to discuss how insurance regulators across Africa can collaborate to facilitate trade in the continent while ensuring the industry’s growth.

Africa’s insurance industry is standing at a significant critical development juncture as the second fastest growing market in the world with a growth rate of 6%.

In the wake of the African Continental Free Trade Area (AfCFTA), Africa’s Gross Written Premium (GWP) potential is estimated to grow at the rate of 7% from about USD 115 billion to about USD 3.405 trillion in a span of 50 years, explained Sosthenes Kewe, Executive Chairman of ACISP.

For this to be realized, regulators in the continent must work together strategically and in partnership to address constraints and fast-track developmental best practices. This calls for regulators’ deep dialogues and heart-to-heart talks.

The topics that were covered during the symposium included: Data & Strategies for Developing Inclusive Insurance Market; Increasing Retention Levels in Africa; Framework for Building Regulatory Sandbox and Their Operations; Capacity Building Framework for the Continent; Implementing Risk Based Supervision (RBS); Complex and emerging risks: Political Risks (War & Terrorism), Cyber risks, Climate, Aviation, Oil & Gas, Pandemics; Excursions.

The guest of honor of this retreat, the Prime Minister of Tanzania Hon. Kassim Majaliwa, urged African insurance companies to cooperate and develop strategies to cover all risks on the continent.

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He stressed that AfCFTA, which Tanzania ratified in 2021, offers massive opportunities for the insurance business in an array of economic sectors including agriculture, oil and natural gas, and minerals.

He also asked insurance companies in Africa to continue providing education to stimulate awareness of the use of insurance products.

“Statistics about the understanding of insurance in Africa show that we are still far behind and we need to increase efforts and put together strategies so that the community understands the importance of insurance and use insurance services for their development,” he concluded.

For his part, Dr. Baghayo Saqware, Commissioner for Insurance of Tanzania, explained that the African continent has growing and converging risks that negatively affect economies, businesses, and communities, and that without financial resilience, the most vulnerable can be locked into a downward spiral of debt and poverty.

And that the absence of more affordable distribution ecosystems, low confidence of users to take up insurance, and failure to innovate exacerbate higher insurance exclusions.

Saqware also stressed that the Tanzania insurance market is ready to receive investors in the areas of agriculture, fishing, and other insurance activities.

The Insurance Sector in Tanzania

Despite the impact of COVID-19 and the economic slowdown, the Tanzanian insurance industry brought gross premiums amounting to TZS 912 billion for the year ending 2021 representing a nominal increase of 11% compared to 2020.

The growth of the sector was about 11% for general insurance and about 17% for life insurance. 

The growth of the sector was also assisted by new distribution channels such as bancassurance via banks, and digital platforms. 

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