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.
Saqware talks about the latest performances of the sector, the innovations taking place, and the opportunities available for the current and new players.
Despite the impact of COVID-19 and the economic slowdown, the insurance industry brought gross premiums amounting to TZS 912 billion for the year ending 2021 representing a nominal increase of 11% compared to 2020. How do you explain those promising results?
Indeed, despite the COVID-19 pandemic in the world and in Tanzania, our sector was not particularly hit.
The growth of the sector was about 11% for general insurance and about 17% for life insurance.
The growth of the sector was about 11% for general insurance and about 17% for life insurance.
The growth in health insurance was connected to a decrease in people getting medical assistance, as with Covid-19 people restrained from going to hospitals apart from those with extreme cases.
The growth of the sector was also assisted by new distribution channels for example with bancassurance via banks, and digital platforms.
What are your expectations for future growth?
We are trying to widen the reach of insurance protection for our people to cover their properties, their assets, their life, and their health.
This is why we introduced mandatory marine cover in 2022 so we’re protecting imported goods. It is now mandatory that all imported goods are 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 which 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 answer the people’s needs, especially low-income earners, those in the informal sector, or agriculture, mining, fishing, and in all those sectors where people are working on the ground, we as a regulator, are ready to accept and make it easier for you to develop these new products.
We also encourage new channels of distribution, so if you are thinking of any channels which 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 and have each year a new product, or at least an improved product, just to keep pace in terms of innovation and product development.
The overall penetration of insurance services in Tanzania is 1.7% which is very low. What can make Tanzanians realize the benefits of insurance?
The key is to speak to the needs of the people with simple products. Also, payment of claims should be effortless and timely, when the claims are genuine, and also console the client after the accident. Those are the things that in our culture will make it very easy to increase sensitivity and acceptance of insurance products.
A major boost to the insurance industry is expected to come with universal health insurance. Can you tell us more about it?
Universal health coverage is about to be enacted in Tanzania. This means that every Tanzanian citizen, or resident in Tanzania, should have health insurance, whether working or not, which will take care of their health here. That law is currently being discussed in parliament. Once it is passed and enacted by our President, it will be enforced possibly in 2023 after six months of transition to prepare for the implementation.
Universal health coverage is about to be enacted in Tanzania.
Under the new law, you will be able to register as a medical insurance company only if you can provide a standard medical package as spelled out by the Minister of Health. 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.
How will universal health coverage be financed?
The end user will pay for it. Instead of paying out of their pocket when they need medical assistance, they pay for insurance that will cover that. Of course, there will be a mechanism to pay in installments.
The principle is that instead of raising money during the time of sickness, people will raise money before going to the hospital. It’s this is a game-changer for the industry.
There are now 33 insurance companies in Tanzania serving a population of 62 million. Is there any room for new entrants in the industry?
33 companies seem many, but compared to the population, insurance is highly encouraged, particularly medical insurance as we have few of them, life insurance, with only three companies currently, and also reinsurance with only two companies currently.
Insurance is highly encouraged, particularly medical insurance, life insurance, and reinsurance.
These are several vibrant markets in the world and throughout Africa. Why invest in Tanzania?
Tanzania has many competitive advantages. For once, we have political stability and strong laws that protect investors.
We have been stable politically since independence.
And we have a population of 60 million with a working class now graduating to medium-level income earners. Therefore, the disposable income for services like insurance is high and increasing.
Finally, from Tanzania, you will be able to serve the regional markets of SADC and EAC in southern and eastern Africa thanks to the business protocols in place. In a nutshell, Tanzania is the place to be and invest.
