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Tanzania Insurance Sector Market Report 2024

Tanzania Insurance Sector Market Report 2023

Global Insurance Market Performances

In 2022, the global insurance market witnessed a modest increase, growing by 0.3% compared to 2021, reaching a total value of USD 6,782 billion. This growth rate represents a slowdown from the 7.5% growth observed in 2021.

The global insurance penetration, which is the ratio of gross direct insurance premiums to GDP, stood at 6.7% (6.9% in 2021 and 7.2% in 2020).

The United States and Canada, which accounted for 46.2% of the global insurance business, saw an increase in GWP of just 0.7% (inflation-adjusted).

In contrast, other regions saw declines, with the EMEA (Europe, Middle East, and Africa) region experiencing the most significant drop of -7.86%.

The global non-life insurance sector saw a growth of 3.8% in 2022, down from a 7.3% growth rate in 2021, reaching USD 3.97 trillion in premiums. Here again, the Americas led with an 8.4% growth, while the EMEA and Asia-Pacific regions experienced declines. The growth in the Americas was attributed to strong premium growth and the appreciation of the USD. While premium growth in advanced markets was flat compared to the previous year, emerging markets saw a 2.8% increase. The ongoing conflict in Ukraine contributed to at least a 1% contraction in premiums in these emerging markets.

The global life assurance sector faced challenges and declined by -4.3% to USD 2.8 trillion in 2022, down from USD 2.9 trillion in the previous year. This downturn, from a 7.8% growth rate in 2021, was largely due to high inflation and reduced purchasing power in Europe, as well as negative impacts on property markets in Asian countries like South Korea and Australia. Despite this global decline, the Americas region still posted a positive growth of 8.7%, buoyed by higher interest rates in the US market. The EMEA region, however, continued to struggle. China’s life insurance premiums grew by only 1.4%, affected by prolonged lockdowns and reduced demand for life assurance.

Africa Insurance Market Performances

In 2022, Africa’s insurance premiums amounted to USD 70.2 billion accounting for 1.0% of the world’s insurance premium and an insurance penetration of 2.4%. This is a decline of 2.6% (real terms) from USD 73.3 billion in 2021 when premiums increased by 6.1% from 2020.

Africa’s long-term (life) insurance premium decreased by 4.2% in real terms to USD 46.90 billion (2021: USD 50.39 billion) whereas general insurance recorded a growth of 1.2% to USD 23.26 billion (2021: USD 22.90 billion).

The African market is highly fragmented and inconsistent, with 91% of premiums concentrated in just ten countries.

Collectively, the six largest insurance markets in Africa–South Africa, Morocco, Egypt, Kenya, Nigeria, and Algeria–accounted for approximately 85 % of the total insurance premiums written premiums.

South Africa accounts for 70% of total premiums, while other regions have different levels of maturity and product mix.

The decline in the African continent’s insurance premiums occurred against a backdrop of 3.8% economic growth across Africa.

The primary factor behind this decline was a slowdown in the insurance market of South Africa, the continent’s largest insurance market. Here, cumulative premiums fell by nearly USD 4 billion to USD 45.8 billion, a significant decrease of 7.9% (or -4.5% inflation-adjusted) from the previous year’s figure of USD 49.7 billion.

However, the rest of Africa saw a positive trend, with direct premiums growing from USD 23.5 billion in 2021 to USD 24.3 billion in 2022, an increase of 3.4%.

In terms of specific insurance sectors, life insurance in Africa experienced a notable decline. Inflation-adjusted life insurance premiums fell by 4.2%, from USD 50.4 billion in 2021 to USD 46.9 billion in 2022.

In contrast, the non-life insurance sector showed resilience, with an inflation-adjusted increase of 1.2% from USD 22.9 billion in 2021 to USD 23.3 billion in 2022.

Overall insurance penetration in Africa, measured as premiums as a percentage of GDP, decreased to 2.4% in 2022, down from 2.7% in 2021. This decline was particularly evident in the life insurance sector, where penetration dropped from 1.8% to 1.6%. However, non-life insurance penetration remained stable at 0.8% throughout the year.

These figures reflect a mixed picture for the African insurance industry in 2022, with significant regional variations and differing trends between life and non-life insurance sectors. The decline in South Africa’s market significantly impacted the continent’s overall performance, while other regions showed growth, indicating a diverse and evolving insurance landscape across Africa.

Nonetheless, Africa remains one of the world’s hot regions for insurance, with steady economic growth and a largely underdeveloped insurance sector.

According to TIRA, the African insurance market is expected to grow at compound annual growth rates (CAGRs) of 7% per annum between 2020 and 2025, nearly twice as fast as North America, over three times that of Europe, and better than Asia’s 6%.

East Africa Insurance Market Performances

The largest economies in East Africa (Kenya, Tanzania, and Uganda) demonstrated solid growth in GDP and GWP and managed to reflect positive performance across most parameters of the insurance business. (Note: Recent data are not available for Ethiopia).

Kenya

Kenya’s GDP grew by 4.8% in 2022 (7.6% in 2021 and -0.3% in 2022). Meanwhile, Kenya’s GWP at the end of 2022 was KES 310.27 billion, representing an increase of 13.4% from KES 273.71 billion reported in 2021 (KES 235.3 billion in 2020).

Insurance penetration increased to 2.29% in 2022 from 2.25% in 2021.

The general insurance business contributed 54.6% of the total gross premium income which increased by 12.9% to KES 165.74 billion in 2022 compared to KES 146.78 billion in 2021.

The long-term insurance business premiums (life assurance, annuities, deposit administration, group life, group credit, investments, personal pensions, and permanent health)  grew by 14.0% in 2022 to KES 140.95 billion (KES 123.69 billion in 2021).

Uganda

Uganda’s GDP grew by 4.6% in 2022 (3.5% in 2021 and 3% in 2022). Meanwhile, Uganda’s insurance GWP grew by 21.69% from UGX 1183.86 billion in 2021 to UGX. 1,440.69 billion in 2022 (UGX 1,065 billion in 2020).

Insurance penetration slightly improved from 0.8% in 2021 to 0.885% in 2022 (0.7% in 2020).

Non-Life GWP grew by 22.01% in 2022 to reach UGX 898,097,830 versus UGX 736,087,296 in 2021 (UGX 664.975 billion in 2020).

Life insurance GWP grew by 26.31% in 2022 to reach  UGX 501,622,323 from UGX 397,128,972 in 2021 (UGX 324.35 billion in 2020).

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