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Interview With Dr. Baghayo Saqware Commissioner of the Tanzania Insurance Regulatory Authority

Interview With Dr. Baghayo Saqware Commissioner of the Tanzania Insurance Regulatory Authority

TanzaniaInvest had the pleasure of interviewing Dr. Baghayo Saqware, Commissioner General of the Tanzania Insurance Regulatory Authority (TIRA), in charge of coordinating policy and other matters relating to insurance in Tanzania.

Dr. Saqware talks about the latest performances of the sector, the innovations taking place, and the opportunities available for current and new players.

Tanzania’s insurance industry brought gross premiums amounting to TZS 912 billion for the year ending 2021, representing a nominal increase of 11% compared to 2020. Can you highlight the performances of 2022?

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In 2022, we had another good year in insurance performance. Gross Written Premiums (GWP) reached TZS 1,158 billion in 2022, marking a 26.7% increase from TZS 911.5 billion written in 2021.

There has been a growth of over 19.9% in general insurance and 46.7% in life insurance.

The penetration rate increased from 1.68% in 2021 to 1.99% in 2022.

We released the TIRA 2022 Annual Market Performance Report on December 6, 2023, with all the figures and analysis for the year.

Gross Written Premiums (GWP) reached TZS 1,158 billion in 2022, marking a 26.7% increase from TZS 911.5 billion written in 2021.

What is your strategy to future expand the reach of insurance in Tanzania?

Our target is for the insurance sector to contribute at least 3% to the GDP by 2030. We are trying to widen the reach of insurance protection for our people to cover their properties, assets, life, and health.

This is why we introduced mandatory marine cover in 2022 to protect imported goods. It is now mandatory for all imported goods to be insured with a locally registered insurance company to avoid issues with compensation that can arise with foreign companies.

Apart from introducing new mandatory covers, we wish to see more companies engaging policyholders, deploying awareness programs, and developing new products that are in line with the needs of the people.

We wish to see more companies deploying awareness programs and developing new products.

If you have a new insurance product that you think will address the people’s needs, especially low-income earners, those in the informal sector, or in sectors like agriculture, mining, and fishing, we, as regulators, are ready to accept and make it easier for you to develop these new products.

We also encourage new channels of distribution. If you are thinking of any channels that are not currently in use, we will look at them and see if any regulation hinders them.

So, we are encouraging companies, brokers, and practitioners in the insurance sector in Tanzania to develop a new product each year, or at least an improved product, just to keep pace in terms of innovation and product development.

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A major boost to the insurance industry is expected with the Universal Health Insurance law that was passed in parliament on 1st November 2023. Can you comment on its financing and the impacts it will have on the sector?

The health insurance law that was passed recently requires all Tanzanians and residents in Tanzania to have health insurance coverage. This will significantly increase the market, especially for health insurance.

The Universal Health Insurance will significantly increase the market.

The Minister of Health has designed the health insurance package. There will be both public and private health insurance companies providing such a package, and citizens or residents will have to choose their preferred provider. The financing for those with no income will be supported by government subsidies, partly from taxes on alcohol and betting firms as may be determined annually by the Ministry of Finance.

How are you ensuring the public understands the value of insurance and health coverage?

In July 2023, we made it compulsory for insurance agreements and policies to be written in both English and Swahili. We’ve received positive feedback, and insurance uptake has increased significantly. Our goal is to have at least 50% of the population with medical insurance by 2030.

Can you tell us about the consortiums for the energy and agriculture sectors that were established this year under your coordination?

These initiatives aim to retain a significant portion of the risk premiums within the country and support strategic farming activities.

The Tanzania Co-insurance Energy Consortium was established by 22 insurance companies who put together their capital and expertise so that the consortium would be able to deal with all energy-related risks emanating from Tanzania.

We expect them to retain not less than 45% of the energy risk premiums with support from reinsurance arrangements.

With the Tanzania Co-insurance Energy Consortium we expect to retain not less than 45% of the energy risk premiums.

The Consortium for Agriculture was established by 15 insurance companies with the support of the regional reinsurance companies, namely Tan-Re, Africa-re, and Zep-Re.

Few companies have an appetite to insure agricultural risks. For this, we have successfully lobbied the Tanzanian Minister for Agriculture to subsidize some of the premiums related to strategic farming activities.

On the demand side, we are fortunate that all significant farming activities are part of an association, commonly referred to as Agricultural Marketing Cooperative Societies (AMCOS).

Through these organizations, we engage with farmers, emphasizing the importance of insurance, and we expect most farmers to voluntarily opt for insurance coverage. They also have the support of the Ministry of Agriculture, which provides essential resources like quality seeds and farming facilities.

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Our focus initially is on these strategic crops that require protection. These include both food-related crops like maize and business-related crops such as cashew nuts, coffee, and tea. There are about 15 such crops that we are starting with.

Are there any other sectors TIRA is focusing on?

We are analyzing the mining value chain and aiming to develop life insurance further, including establishing our mortality tables.

We are analyzing the mining value chain and aiming to develop life insurance further.

There are now 33 insurance and 3 reinsurance companies licensed in Tanzania, serving a population of 62 million. Is there any room for new entrants in the industry?

Yes, there’s no limitation on the number of companies. We encourage new companies to enter the market and offer products that meet the community’s needs.

Tanzania is a vast country with diverse needs. The insurance participation in the country’s GDP is about 2%, and we are confident we will reach and surpass our objective of 3% by 2030.

The working class is graduating to medium-level income earners. Therefore, the disposable income for services like insurance is high and increasing.

The Tanzania working class is graduating to medium-level income earners. Therefore, the disposable income for services like insurance is high and increasing.

The population spreads across numerous regions, each with at least 3 million people. This presents a unique opportunity for insurance companies to serve just two or three regions.

Currently, most insurance companies are concentrated in Dar es Salaam. However, there’s a need for more companies, and we encourage them to establish their headquarters in various parts of the country, including the far south, west, and east.

We also need more companies in the reinsurance sector to provide technical support to direct insurers. Additionally, there’s a demand for other service providers in the insurance ecosystem, such as brokerage agencies.

This is why we warmly welcome investors to Tanzania. Our regulatory philosophy ensures a profitable market, professionally run, free from fraud and mismanagement.

In addition, from Tanzania, they will be able to serve the regional markets of SADC and EAC in southern and eastern Africa thanks to the business protocols in place.

We also encourage our companies to take advantage of AfCFTA and trade areas. Some companies are already establishing offices outside Tanzania. We aim to sell insurance products and services beyond our borders.

Investors will realize high returns on investment in Tanzania, and we are committed to maintaining a market environment that supports this. If you put your money here, you won’t regret it.

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