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Tanzania Insurance Sector Market Report 2024

Tanzania Insurance Sector Market Report 2023

Tanzania Insurance Market Performances

ln 2022, the financial service activities including insurance contributed TZS 5,720.8 billion to the GDP of Tanzania, representing 3.6% of the total GDP; whereas, in 2021, the said sector contributed TZS 5,259.8 billion to the GDP which comprised 3.5% of the total GDP.

As one of the financial subsectors, insurance, in terms of gross premium underwritten contributed 21.0% to the sector in 2022.

In 2019, 2020, and 2021 its contribution was 16.5%, 16.4%, and 16.9%% respectively.

Contribution of lnsurance to Tanzania Financial Sector GDP, 2013-2022

Tanzania Insurance Contribution to Financial Sector

As of 31 December 2022, the insurance industry in Tanzania recorded a total of 3,952,085 policyholders and 13,879,199 beneficiaries nationwide, encompassing both commercial and public insurance.

In terms of commercial insurance, there were 2,297,107 policyholders and 9,800,144 beneficiaries. On the other hand, public insurance recorded 1,654,978 policyholders and 4,079,055 beneficiaries.

ln 2022, the insurance market in Tanzania recorded an improvement in its penetration ratio which increased from 1.68% in 2021 to 1.99%.

Specifically in commercial insurance, the penetration ratio increased to 0.68% in 2022. This represented an improvement from 0.58% in 2021, 0.56% in 2020, and 0.58% in 2019.

Meanwhile, the penetration ratio for public insurance also demonstrated improvement, reaching 1.27% in 2022, compared to the 1.1% recorded in the preceding year, 2021.

The penetration ratio is expected to further increase in conjunction with economic growth supported by the implementation of National Economic Strategies such as; Vision 2025, the National Financial lnclusion Framework lll, the Financial Sector Development Master Plan, and the National Climate Change Response Strategy 2021-2026.

The Bank of Tanzania (BoT) explains that in 2022 the insurance sub-sector remained sound, as depicted by the gross premium and profitability increase, coupled with adequate capital and liquidity.

The growth was further supported by post-pandemic business rebound related to transport, tourism, accommodation, and increased marketing. Additionally, policy interventions by the Government to improve insurance outreach, such as improvement of regulatory frameworks, development of automated systems for tracking premiums, and public awareness, contributed to the growth.

Tanzania Commercial Insurance Penetration as Contribution of GDP, 2013–2022

Tanzania Insurance Penetration 2013-2022

Tanzania Insurance Sector Key Performance Indicators, 2022

The following is the performance of 31 insurance companies for the year 2022. lt covers key indicators of the insurance industry, namely gross written premium (GWP), underwriting profit or loss, profit after tax, assets, liabilities and net worth, investment income, and retention ratio. Motor insurance was the leading class under general insurance, followed by Fire and Health insurance.

Tanzania Insurance Sector Performance, 2020-2022

Tanzania Insurance Sector Performance, 2020-2022

Gross Written Premium  (GWP)

GWP reflects the total premium collected by an insurer, signifying its market size and share. ln 2022, the total GWP surged by more than 25%, soaring to TZS 1,138 billion, up from TZS 911.5 billion in 2021.

TIRA explains that is much higher than the expected growth rate of 10.3% and attributes the growth to several factors, including heightened compliance with statutory requirements, the adoption of new systems like TlRA MlS, robust marketing efforts, and persistent public awareness initiatives.

The life insurance segment was the most impressive, as it grew by 46% from TZS 165 billion in 2021 to TZS 242 billion in 2022.

The general insurance segment also contributed a large amount of TZS 895.1 billion to the total GWP in 2022, marking a strong 20% increase from TZS 746.4 billion in 2021.

Tanzania Insurance Gross Written Premiums (TZS Billion), 2020-2022

Tanzania Insurance Gross Written Premiums (TZS Billion), 2020-2022

The gross written premium recorded by local reinsurers by assuming risks from outside the country was TZS 17.7 billion in 2022. This accounted for 1.5% of the total GWP in 2022.

The highest GWP was achieved by Sanlam Life at TZS 163,114 million, followed by NlC with TZS 139,980 million, and Strategis with TZS 93,325 million. These top three insurers accounted for 34.9% of the total GWP.

Market Share For Gross Written Premium in Tanzania As Per Business Class, 2021-2022

Market Share For Gross Written Premium in Tanzania As Per Business Class, 2021-2022

Underwriting Profit or Loss

Underwriting profit or loss represents the financial efficiency of an insurer’s core business. ln 2022, only 14 out of 31 insurers reported a positive underwriting profit.

The highest underwriting profit was reported by NlC at TZS 14,632 million, followed by Alliance with TZS 5,047 million, followed by MO Assurance with TZS 1,864 million, and ZlC with TZS 1,676 million.

Profit After Tax

Profit after tax signifies the overall profitability and performance of an insurer. Out of the 31 insurers, 25 reported a positive profit after tax in 2022.

NlC achieved the highest profit after tax at TZS 29,324 million, followed by Sanlam Life with TZS 6,845 million, followed by Strategis with TZS 5,646 million, and Britam with TZS 4,067 million, accounting for 83.4% of the total profit after tax of TZS 63,849 million generated by all insurers.

Assets, Liabilities, and Net Worth

The net worth of insurance companies rose by two-thirds (66.0%) to TZS 690.5 billion in 2022, compared to TZS 416.0 billion in 2021. Their total assets also grew by almost a third (32.7%) to TZS 1,697.0 billion from TZS 1,278.6 billion in the previous year. However, their liabilities increased by a smaller rate of 7.5% to TZS 1,006.5 billion in 2022, from TZS 862.5 billion in 2021. (See the attached Table 5C for more details).

Investment Income

Investment income reflects an insurer’s ability to generate returns from investments. The total investments of the insurance sector reached TZS 1,169.7 billion, showcasing a steady increase from TZS 939.7 billion in 2021.

The total investment income of all 31 insurers in 2022 was TZS 81,544 million. NlC led in this category with TZS 19,989 million in investment income, followed by Sanlam Life with TZS 8,841 million, and Strategis with TZS 7,852 million.

lnvestment income earned by general insurance companies reached TZS 64.0 billion in 2022, a notable 17.9% increase from TZS 54.297 billion in 2021.

The rate of return on investments increased to 9.2% in 2022 for general insurance compared to 8.8% in the previous year. The increase in return has partly been attributed to an increase in bank deposit rates and investment in government securities.

However, the rate of return on investments for life insurance remained at 5.0% in 2022. Life assurance companies earned an investment income of TZS 17.5 billion in 2022, 1.7% higher compared to an investment income of TZS 17.2 billion recorded in 2021.

Tanzania GWP, Assets, Liabilities, Net-Worth, Investments, 2020-2022

Investment Portfolio

ln 2022, the industry continued to display prudence and diversification in its investment strategies. As of December 31, 2022, the investment portfolio consisted of various asset classes, each contributing differently to the sector’s investment profile.

Asset Allocation (2022):

a)          Bank Deposits (48.4%). The largest portion of insurers’ investment assets was allocated to bank deposits, which encompassed term deposits and cash balances. This category accounted for 48.4% of the total investments. The focus on bank deposits underscores insurers’ cautious approach to liquidity management and the safeguarding of capital.

b)          Government Securities (27.6%). Government securities represented a significant portion of insurers’ investments at 27.6%. This asset class, characterized by stability and reliability, remains a key component of insurers’ portfolios, offering a balanced risk-return profile.

c)          Real Estate (10.9%). lnvestments in real estate constituted 10.9% of the total investments. The allocation to real estate assets signifies insurers’ interest in income–generating properties, diversifying their investment streams, and capitalizing on long-term value appreciation.

d)          Shares (9.2%). Shares in various companies comprised 9.2% of the investment portfolio. The presence of shares in the portfolio indicates insurers’ participation in equity markets, aiming to benefit from capital gains and dividends from well-performing companies.

e)          Related Parties (1.7%). lnvestment in related parties accounted for 1.7% of the total investments. This category represents strategic investments made by insurers in associated entities.

f)           Other Financial lnvestments (2.1%). Other financial investments include investment pools, mutual funds, unit trusts corporate bonds, policy loans, and other investments. These investments offer insurers flexibility and opportunities for portfolio optimization.

Tanzania Insurance Companies Investment Portfolio, 2022

Tanzania Insurance Companies Investment Portfolio, 2022

ln comparison to the previous year, asset allocation in 2022 displayed a few changes. While Bank Deposits remained the largest component, there was a slight shift in the composition of the portfolio. Government Securities, though still significant, saw a decrease from 34.0% in 2021 to 27.6% in 2022. On the contrary, Shares and Real Estate maintained their positions, reflecting insurers’ commitment to diversification.

Retention Ratio

The retention ratio indicates an insurer’s risk appetite and capacity. The overall retention of the insurance industry was 57.1%  in 2022, representing a slight decrease from 58.7% in 2021. The industry retention ratio was 49.4% and 85.7% for the general and life assurance businesses, respectively. The ratio was within the prudential requirement of 30% to 70% and 50% to 90%, for general and life respectively.

The highest retention ratio was achieved by NlC Life at 100.0%, followed by Bumaco Life at 96.3%, followed by Sanlam Life at 89.6%, followed by Bumaco General at 87.7%, and Milembe at 86.4%.

TIRA continues to put more effort into enhancing retention strategies through the establishment of insurance consortiums and retention mechanisms stipulated under the newly issued Retention and Reinsurance Management Guidelines.

Tanzania Insurance Companies Key Performance Indicators, 2022

CompanyGPW (TZS million)Underwriting Profit or Loss (TZS million)Profit After Tax (TZS million)Investment Income (TZS million)Retention Ratio
Alliance90,3095,0477,3375,34955.60%
Alliance Life33,761-9007141,07163.90%
Assemble30,106-4,162-2,16495585.00%
Britam32,854-2424,0672,76348.90%
Bumaco16,3484221,6651,95687.70%
Bumaco Life327-290-14714396.30%
First15,150-25216178374.80%
GA11,0932567484343.80%
Heritage55,2881042,1152,50327.90%
ICEA Lion18,699-7904841,39848.60%
IGT2,433-1,979-1,97814166.30%
Jubilee Allianz71,542-2,9567624,11544.10%
Jubilee Health31,702-3,1302993,76861.50%
Jubilee Life14,286-9521,1681,97476.30%
Maxinsure7,190-2,161-1,44214452.80%
Mayfair33,4688701,4351,45045.60%
Meticulous25,5256301,08694839.40%
Metro Life11,54240863122481.90%
MGen5,406572016468.00%
Milembe5,425-7831750086.40%
MO Assurance24,2411,8642,3401,49941.60%
NIC139,98014,63229,32414,69220.10%
NIC Life19,135-6,082-3685,297100.00%
Phoenix (MUA)42,057-2,0561,7404,38425.70%
Reliance40,664-2,5241,5714,38160.00%
Sanlam General34,297599691,20044.70%
Sanlam Life163,1142116,8458,84189.60%
Strategis93,325-1295,6467,85281.70%
Tanzindia16,5838886484637.20%
UAP16,530-5,927-5,9171,97751.20%
ZIC34,9101,6763,66628673.30%

Financial Stability and Strength

During 2022, general insurers’ solvency ratio was 66.7%, above the minimum prudential requirement of 25.0%. Likewise, life insurers’ solvency ratio was 46.8% compared to the minimum prudent standard of 8.0%.

TIRA has in place mechanisms for the protection of policyholders by ensuring that companies fulfill their contractual obligations while implementing the appropriate remedial plans vetted by the Authority for companies facing challenges.

The profitability of the general insurance business increased from TZS 39.2 billion to TZS 55.0 billion, representing an increase of 40.2%. Whereas return on equity increased from 11.1% to 12.9% due to the increase in underwriting income.

General insurers’ combined ratio, which measures the profitability of insurance underwriting, slightly improved to 100.0% in 2022 from 100.7% recorded in the previous year. The ratio was within the maximum prudential limit of 100.0%, implying a sufficient ability to cover policy acquisition expenses and generate reasonable profits.

General insurers’ liquidity ratio increased to 115.9% during the year ended 2022 compared to 111.5% recorded in the preceding year.

The life insurance liquidity ratio increased to 83.3% from 63.6% in the same period. Liquidity ratios for general insurers and life insurers exceeded the minimum prudential requirement of 95.0% and 60.0%, respectively.

New Insurance Products

The innovation and development of new and suitable insurance products have significantly contributed to insurance uptake, particularly in general insurance.

Sixteen (16) new insurance products were approved during 2022 compared to eleven (11) approved products in 2021. Out of the products approved in 2022, three (3) were life insurance products while the remaining thirteen (13) were general insurance products.

NAME OF THE PRODUCTCLASS OF BUSINESSCOMPANY
1Weather Insurance PolicyAgriculture InsuranceGA Insurance
2Safari Salama BimaTravel InsuranceGA Insurance
3Medical Insurance ProductHealth InsuranceFirst Assurance
4Video Graph InsuranceAll Risk InsuranceBritam Insurance
5Dukani PackageAll Risk InsuranceJubilee Allianz General Insurance
6Livestock InsuranceAgriculture InsuranceMGEN Insurance
7Pamoja AfyaHealth InsuranceJubilee Health Insurance
8Medical ProductHealth InsuranceBumaco Insurance
9Kibo (Individual, Family, Dada Card)Health InsuranceStrategis Insurance
10Amani Family Finance Plan ProductLife InsuranceSanlam Life Insurance
11Beam LifeLife InsuranceNIC
12Facilitation of Loan to Individual Endowment PolicyCredit LifeNIC
13Malkia Insurance ProductFire InsuranceAssemble Insurance
14Machinga Insurance ProductAll Risk InsuranceBumaco Insurance
15Mtumbwi Salama Insurance ProductMarine InsuranceJubilee Allianz General Insurance
16Container Insurance ProductMarine InsuranceStrategis Insurance

The registration of actuarial firms by TIRA as well as expansion of actuarial functions in insurance companies is expected to foster the innovation and development of new and suitable insurance products in the country.

Tanzania General Insurance Sector Performance, 2022

The general insurance sector exhibited dynamic trends in business volume, underwriting, claims experience, and financial indicators in the year 2022. This section provides a comprehensive overview of the sector’s performance across various key parameters.

Tanzania General Insurance Results, 2020-2022 (TZS Million)

Tanzania General Insurance Results, 2020-2022

Volume of Business

The general insurance business displayed resilient growth, with a total gross premium of TZS 895.1 billion in 2022, marking an impressive 19.9% increase from TZS 746.4 billion in 2021.

This growth reflects the sector’s robust response to evolving market dynamics and rising demand for insurance solutions. The surge in gross premiums was a notable improvement over the previous year’s growth rate of 8.4%.

According to TIRA, the increase is attributed to several factors, including the following:

a)          lncrease in public awareness of insurance matters;

b)          lntroduction of new distribution channels;

c)          Development of demand-driven insurance products;

d)          Continuous enforcement of the law; and

e)          lntroduction of insurance management systems

Portfolio

The portfolio mix of general insurance products continued to evolve in 2022. Motor insurance business took the lead with a share of 37.5%, followed by Fire at 23.9%, Health at 17.2%, Accident at 8.2%, Aviation at 5.1%, Marine at 4.5%, Engineering at 2.6%, and Oil & Gas at 0.1%.

The “other general class” of business with a share of 11.4% was further categorized into various subclasses and the premium distribution as a percentage of the total premium collected appeared as follows; Miscellaneous, 2.0% (2021; 1.4%), Theft insurance, 2.1% (2021: 1.2%), Bond, 2.9% (2021: 1.2%), Liability insurance, 3.5% (2021: 0.9%) and Agriculture insurance, 0.3% (2021: 0.2%).

Tanzania General Insurance Financial Highlights 2020-2022 (TZS Million)

Tanzania General Insurance Financial Highlights 2020-2022

Premium Ceded

Premium cession is the process of sharing risk between different insurance parties, such as local insurers, local reinsurers, regional reinsurers, and foreign reinsurers. ln 2022, the amount of premium ceded by the insurance industry in Tanzania increased to TZS 452.8 billion from TZS 352.5 billion in 2021.

In 2022 a total of TZS 34.7 billion was ceded to local reinsurers and a small portion to accredited reinsurers. Similar period last year, the cession was TZS 23.6 billion.

This shows that the insurance industry in Tanzania has improved its cooperation and collaboration with various insurance partners. lt also shows that local reinsurers have played a bigger role in providing reinsurance capacity within the country.

Reinsurance Recoveries

Reinsurance recoveries are the amounts that insurers receive from their reinsurers for the claims that they have paid to their policyholders. ln 2022, the amount of reinsurance recoveries by the insurance market increased to TZS 127.9 billion from TZS 116.9 billion in 2021.

This shows that the insurance industry has benefited from the reinsurance arrangements that they have made with their reinsurers. lt also shows that the insurance industry has managed to reduce its net claims ratio by transferring some of the losses to its reinsurers.

However, the ratio of reinsurance recoveries to premium ceded decreased to 28.3% in 2022 from 33.2% in 2021. This means that the insurance industry has recovered less from their reinsurers than they have paid to them, which implies a higher net cost of reinsurance. Moreover, this appears to be low because many of the risks that are externalized are specialized and have high loss ratios.

Commissions Received

Commissions received are the amounts that insurers receive from their reinsurers for the business that they have ceded to them. ln 2022, the amount of commissions received by the insurance industry increased to TZS 78.2 billion from TZS 72.2 billion in 2021. This shows that the insurance industry has earned more income from their reinsurance partners for the premiums that they have ceded to them.

However, the ratio of commissions received to premium ceded decreased to 17.3% in 2022 from 20.5% in 2021. This means that the insurance industry has received fewer commissions from their reinsurers than they have paid to them, which implies a lower income from reinsurance. This may be because some of the reinsurance contracts have lower commission rates or higher profit–sharing arrangements.

Claims Paid

ln 2022, the Tanzanian insurance sector exhibited its financial resilience by disbursing a total of TZS 266.8 billion in gross claims, reflecting a robust commitment to policyholders’ financial protection needs.

Motor insurance emerged as the dominant class of business, with claims amounting to TZS 115.1 billion, showing a substantial increase compared to the previous year’s TZS 101.8 billion. This highlights the vital role of motor insurance in addressing accidents and related incidents.

Fire insurance contributed TZS 50.1 million to the overall claims pool, showcasing the sector’s unwavering support during fire-related losses, and experiencing an increase from the previous year’s TZS 49.8 million.

Health insurance dropped from TZS 100,6 million in 2021 to TZS 46.4 million in 2022, maintaining its role in providing financial protection for healthcare expenses.

Engineering insurance demonstrated steady growth, with claims of TZS 16.5 billion, compared to TZS 15.1 billion in the previous year, highlighting its importance in managing risks related to construction and engineering projects.

Claims in the Aviation category remained relatively stable at TZS 7.5 million, compared to TZS 7.0 billion in 2021, indicating consistent support in aviation-related claims.

Other General insurance, however, experienced a slight decrease, with claims totaling TZS 7.5 billion, compared to TZS 8.6 billion in the previous year.

Marine insurance recorded a significant increase, reaching TZS 10.9 billion from TZS 6.6 billion in 2021, reflecting the sector’s responsiveness to marine-related claims.

Notably, the Oil & Gas category reported no claims in 2022, in contrast to TZS 608,710 million claims during 2021, reflecting a stable year for this sector in terms of claimable events.

General Insurance Underwriting Results

The underwriting landscape witnessed shifts, resulting in diverse performance across classes of business. The sector reported an underwriting loss of TZS 0.1 billion in 2022, a significant improvement from the underwriting loss of TZS 2.2 billion in 2021.

During  2022, on a class-by-class basis, the Motor, Aviation, Fire and Accident classes of business realized underwriting profits of TZS 24.6 billion, TZS 10.9 billion, TZS 5.3 billion, and TZS 3.7 billion, respectively.

However, Other General, Health, Engineering, Marine, and Oil & Gas classes of business recorded underwriting losses of TZS 27.2 billion, TZS 7.2 billion, TZS 5.2 billion, TZS 4.1 billion, and TZS 0.8 billion respectively.

Tanzania General Insurance Underwriting Results by Class, 2022 (TZS Million)

Tanzania General Insurance Underwriting Results by Class, 2022 (TZS Million)

In terms of class-wise growth, the Tanzanian insurance sector had varying performance trends in 2022, reflecting the dynamic nature of the industry. The most remarkable change was in Oil & Gas, which rebounded from a steep decline of 81.4% in 2021 to a staggering increase of 999.2% in 2022.

Engineering also showed a remarkable recovery, growing by 259.6% after a drop of 13.7% in the previous year.

Other General and Accident classes also displayed strong growth, at 45.6% and 25.5%, respectively.

Fire class grew by 11.0%, slightly higher than the 8.8% growth in 2021.

Marine and Health classes had modest growth rates of 7.8% and 1.5%, respectively.

However, Aviation and Motor classes experienced slowdowns in 2022, with Aviation declining by 6.3% after a surge of 34.4% in 2021, and Motor growing by only 8.5%, half of the 16.5% growth in the previous year.

General Insurance Business Profit Results

lnvestment income earned by general insurance companies reached TZS 64.0 billion in 2022, a notable 17.9% increase from TZS 54.297 billion in 2021.

The industry’s management expense expenses as the percentage of the gross written premium showed slight changes, with the ratio increasing slightly to 45.4% in 2022 from 45.2% in 2021. These ratios were far above the international benchmark of 25.0%.

The net income after tax in 2022 amounted to TZS 55.0 billion, reflecting a 40.2% increase compared to TZS 39.2 billion in 2021.

Tanzania Life Insurance Sector Performance, 2022

Tanzania’s insurance market comprises six (6) insurance companies transacting life assurance business. These insurance companies for the year 2022 had underwritten 130,701 policies with more than 6,692,890 beneficiaries.

The life assurance business exhibited a remarkable growth of 46.7% in 2022, with gross written premiums rising to TZS 242 billion from TZS 165 billion in 2021. On average for the past five years, the life industry has experienced a growth of 25.1%.

The growth was mainly attributed to the increase in awareness following the deployment of awareness campaigns and sensitization programs. Further growth is anticipated as a result of the introduction of bancassurance agents which are among the sales channels distributing life assurance products.

Tanzania Life Assurance Gross Written Premiums, 2018-2022 (TZS Million)

Tanzania Life Assurance Gross Written Premiums, 2018-2022 (TZS Million)

Products

Life assurance encompasses three main categories: individual life assurance, group life assurance, and superannuation or pension (also known as other life assurance). These categories offer a range of insurance products tailored to different needs.

Individual life assurance includes whole life and term insurance, providing lifelong coverage and coverage for a specific term, respectively. lndividual life assurance experienced a growth of 12.1% from TZS 33.7 billion in 2021 to TZS 37.7 billion in 2022.

Group life assurance extends similar benefits to a group, typically provided by employers or organizations. Group life assurance showed the strongest growth of 55.6% in premiums recorded from TZS 131.3 billion in 2021 to TZS 204.4 billion in 2022.

Superannuation or pension plans offer retirement income, while annuities provide periodic payments. They increased by a staggering 42.9% from TZS 25.4 billion to TZS 36.3 million in 2020 and 2021 respectively.

Tanzania Life Assurance Product Mix, 2022

Tanzania Life Assurance Product Mix 2022

Various specialized products like endowment, funeral, credit, and annuity in both individual and group life assurance further cater to specific customer needs, making life assurance a versatile tool for financial security and planning.

Life assurance products in the industry are designed to serve the dual purpose of protection and savings. These products are designed to provide financial security to beneficiaries in the event of the policyholder’s death while also accumulating savings over time.

They are often customized to ensure that they can cover future education expenses for the beneficiaries, offering a crucial financial safety net for the policyholder’s family in times of need.

Tanzania Life Assurance Companies

Tanzania’s insurance market comprises six (6) insurance companies transacting life assurance business.

The largest growth in business for the year 2022, was recorded by Bumaco Life with a growth of 111.6 % compared to 2021, followed by NlC Life (74.1%), Alliance Life (66.1%), Sanlam Life (48.2%), Metro Life (10.1%), and Jubilee life: (9.7%).

Tanzania Life Assurance Gross Written Premiums By Company, 2022 (TZS Million)

Tanzania Life Assurance Gross Written Premiums By Company, 2022 (TZS Million)

Premium Ceded

The largest portion of the life assurance business was locally placed to complement the localization requirement. For the year ended December 31, 2022, a total of TZS 34.7 billion was ceded to local reinsurers and a small portion to accredited reinsurers. Similar period last year, the cession was TZS 23.6 billion.

Commissions Received

Commissions received are the amounts that insurers receive from their reinsurers for the business that they have ceded to them. ln 2022, the amount of commissions received by the insurance industry increased to TZS 4.5 billion from TZS 3.2 billion in 2021. This shows that the insurance industry has earned more income from their reinsurance partners for the premiums that they have ceded to them.

However, the ratio of commissions received to premium ceded decreased to 13.1% in 2022 from 13.4% in 2021. This means that the insurance industry has received fewer commissions from their reinsurers than they have paid to them, which implies a lower income from reinsurance. This may be because some of the reinsurance contracts have lower commission rates or higher profit-sharing arrangements.

Policyholders’ Benefits

ln 2022, life assurance companies disbursed a total of TZS 122,160 million in benefits. Among these payouts, 78.7% were made under Group life assurance policies, totaling TZS 96,133 million an increase from the prior year’s figure of TZS 76,162 million. The remaining 21.3% were attributed to individual life policies, amounting to TZS 23,021 million, up from TZS 19,520 million in the preceding year. Conversely, other life benefits saw a decrease from TZS 15 million in 2021 to TZS 7 million in 2022. This rationale positive trend in benefit payments suggests that companies are fulfilling their financial commitments responsibly.

Life Insurance Underwriting Results

Life insurers experienced an underwriting loss of TZS 11.1 billion in 2022 compared to income of TZS 5.5 billion recorded in 2021. The life industry continued to experience the backload of COVID-19 impacts, particularly on death claims.

Life Insurance Key Performance Indicators

Life assurance companies earned an investment income of TZS 17.5 billion in 2022, 1.7% higher compared to an investment income of TZS 17.2 billion recorded in the year 2021.

Total income (including net premium written, investment income, and other income) recorded by life assurance companies amounted to TZS 226.2 billion in 2022, 40.8% higher than TZS 160.6 billion in 2021.

The total policyholders’ benefits amounted to TZS 122.2 billion in 2022, being higher by 27.7% compared to TZS 95.7 billion paid in 2021.

The management expenses as the percentage of the gross written premium improved by 3.2% on account of growth in gross written premium from 15.8% in 2021 to 12.6% in 2022.

TIRA explains that is it collaborating with the Association of Tanzania Insurers (ATl) to ensure that acquisition costs in life business are manageable by prescribing the maximum intermediary commission rates for group business.

The insurers’ total life fund increased by 25.7% from TZS 187.3 billion at the end of 2021 to TZS 235.4 billion at the end of 2022.

Tanzania Life Insurance Financial Highlights, 2022 (TZS Million)

Tanzania Life Insurance Financial Highlights, 2021-2022

Tanzania Insurance & Assurance Intermediaries Performances

ln 2022, of the total gross written premium, which amounted to TZS 1,137.2 billion, 64.5% (TZS 733.7 billion) was conducted through intermediaries. Among these, insurance brokers took the largest share at 35.2% (TZS 400.5 billion), followed by bancassurance agents at 18.3% (TZS 208.4 billion), and insurance agents at 11.0% (TZS 124.8 billion).

The remaining 35.5% (TZS 403.5 billion) was directly transacted by the insurance companies. In 2021 and 2020, they directly transacted approximately 30% and 27%.

This indicates that the increase in business volume was primarily attributed to the effective utilization of distribution channels and the proactive initiatives of the insurance companies.

Tanzania Insurance GWP by Intermediary, 2020-2022

Tanzania Insurance GWP by Intermediary, 2020-2022

Brokers

ln 2022, out of the total gross written premiums for both long-term and general insurance businesses conducted within the country (TZS 1,137.2 billion), brokers facilitated 35.2% of the transactions, equivalent to TZS 400.5 billion. This is slightly less than 38.7% in 2021.

However, over the past five years, there has been a decline in the market share of brokers, while other business channels have experienced growth, particularly bancassurance agents, with the introduction of Bancassurance regulations, which has opened new distribution channels and intensified competition among intermediaries.

ln 2022, brokers transacted a total of TZS 318.6 billion in general insurance premiums, marking a 10.1% increase from the TZS 289.3 billion transacted in 2021.

The highest level of broker involvement was noted in Other General where 79% of the entire premium volume from this class was transacted through brokers followed by the Microinsurance class of business (64%), Fire (44%), Motor (34%), Marine (32%), Engineering (31%), Health (27%), Accident (26%) and Aviation (14%).

Tanzania Brokers Contribution by General Insurance Class, 2022

Tanzania Brokers Contribution by General Insurance Class, 2022

The dominant brokers in the general insurance business were African Risk & lnsurance Services, holding the largest share at 19.2% (2021: 18.9%), followed by MlC Global Risks at 13.5% (2021: 10.6%), and J.H. Minet & Co. at 11.6% (2021: 14.0%). Demeter Financial & lnsurance Services held 8.9% (2021: 6.8%), lmpex lnsurance Brokers accounted for 6.3% (2021: 5.9%), Titanium 5.9%, and Howden Puri lnsurance Brokers 5.7% (2021: 6.1%).

The seven listed brokers above, collectively managed approximately 71.0% of the entire general insurance broking industry’s business, showing an increase from 63.0% in 2021.

The remaining 29% of the market was handled by other brokers, down from 37.0% in the previous year.

At the end of 2022, a total of 28 brokers were engaged in transacting life assurance business, marking a significant rise from 16 in 2021. The total premium for life assurance business transacted by brokers increased to TZS 81.9 billion, indicating a remarkable 50.3% increase from the TZS 54.4 billion transacted in the preceding year 2021. This represents 33.8% of the whole life insurance GWP for 2022, slightly up from 32.9% in 2021.

The largest share of the life assurance business was held by Aris at 88.09%, a slight decrease from 91.5% in 2021, followed by FBN lnsurance Brokers which accounted for 4.04% (2021: 0.07%), Kangaroo lnsurance Brokers which held 2.78% (2021: 3.7%), and J.H. Minet & Co. which had a share of 1.49% (2021: 1.8%). Collectively, these brokers managed about 96.4% of the entire life insurance broking industry business, a slight decrease from 96.7% in 2021. The remaining 3.6% was transacted by other brokers, a slight increase from 3.3% in the previous year.

Insurance Agents

Out of the total gross written premium in 2022 for both life assurance and general insurance businesses, which amounted to TZS 1,137.3 billion, 11.0% (equivalent to TZS 124.8 billion) was transacted by insurance agents located across the country. This is a contraction compared to 2021 when 14.0% (TZS 127.4 billion) was transacted through insurance agents.

ln 2022, insurance agents transacted a total of TZS 105.5 billion in general business. This represented a 3.6% decrease compared to the TZS 109.4 billion transacted in 2021. In 2021, a total of TZS 109.4 billion of general insurance premiums was transacted through agents (14.6% of all general insurance premiums of TZS 746.4 billion).

The highest level of agent involvement was observed in the Motor class of business, accounting for 55.1% of the total gross premium transacted by agents. However, this was a slight decrease from 60.2% in 2021. Following closely was the Health class with 29.5% (2021: 13.3%), while Fire accounted for 5.7% (2021: 10.0%).

The remaining classes were as follows: Other General with 4.4% (2021: 6.9%), Engineering with 3.1% (2021: 4.5%), Marine with 1.1% (2021: 2.5%), and other classes of business collectively representing 1.1%. These other classes include Accident, Aviation, and Oil & Gas.

ln 2022, insurance agents had transacted TZS 19.3 billion gross written premium for life assurance business, reflecting a 7.2% increase from the TZS 18.0 billion transacted in 2021. This represents 7.9% of the total premium collected for life assurance, versus 10% in 2021.

ln 2022, insurance agents predominantly transacted the Group Life business, accounting for 51.5%, which was a significant shift from 99.6% in 2021. Followed by the lndividual Life segment, making up 48.5% of the total, indicating an increase from 0.4% in the previous year 2021.

Bancassurance Agents

Out of the total gross written premium during 2022 (TZS 1,137.2 billion), TZS 208.3 billion representing 18.3% was transacted through bancassurance agents. ln 2021, business transacted through bancassurance agents amounted to TZS 179.1 billion representing 19.7% of the total insurance written premiums.

During 2022, bancassurance agents contributed TZS 97.6 billion in general insurance business representing 10.9% of the total gross written premium. ln 2021, the amount was TZS 90.1 billion representing 12.1% of the total general insurance business.

Almost half of the bancassurance agents’ share of the general insurance business was held by Tanzania’s two largest banks: CRDB Bank with 28.7%, and NMB Bank with 24.2%­. They were followed by Exim Bank (9.5%), NBC Bank (5.6%), and Stanbic Bank (5.1%). The remaining bancassurance agents transacted each below 5%.

The highest bancassurance agents’ involvement was observed in Motor insurance where 50.0% of the entire premium volume was collected by bancassurance agents (2021: 51.0%). That was followed by Fire 17.1% (2021: 14.7%), Other general class 13.8% (2021: 16.1%), and Health 10.9% (2021: 11.2%).

Tanzanian Banks Contribution to General Insurance GWP, 2022

Tanzanian Banks' Contribution to General Insurance GWP, 2022

Total premium transacted by bancassurance agents in respect of 2022 life assurance business amounted to TZS 110.7 billion in life business representing 45.7% of the total life assurance premium.

ln the year 2021 the amount was TZS 89.0 billion representing 53.9% of the total life assurance business.

The highest bancassurance agents’ involvement in transacting life assurance products was in the Group Life business whereby 87.4% of the entire premium volume was transacted by bancassurance agents. This was followed by lndividual Life contributing 11.5%, and other life 1.1%. ln the year 2021 the largest portion was in group life with 90.9% followed by individual with 9.1%.

ln 2022, almost half of bancassurance agents’ share of life assurance business was held by Tanzania’s largest banks: CRDB Bank with 47.4% (2021: 25.9%). It was followed by MNB Bank with .3% (2021: 54.4%), and NBC Bank with 12.1% (2021: 9.4%). These bancassurance agents collectively handled about 80.8% (2021: 89.7%) of the entire bancassurance life assurance business in Tanzania.

Tanzanian Banks Contribution to Life Insurance GWP, 2022

Tanzanian Banks Contribution to Life Insurance GWP, 2022

Reinsurance Business

Reinsurance has been a critical area of focus for TIRA due to its contribution to providing the underwriting capacity of the Tanzanian insurance industry in both the life and non-life insurance business.

For this, the Authority issued Guidelines on Retention and Reinsurance Management in 2023, which among other things establishes a framework for retention, reinsurance, and management of specialized risks in the insurance industry in Tanzania.

Consequently, TIRA, in collaboration with the Association of Tanzania Insurers (ATl), established two consortiums: the Oil & Gas Consortium and the Agriculture Consortium. The consortiums underwrite business in the country to complement the industry’s efforts to enhance local retention for the said classes of business

During 2022, the industry retention ratio stood at 49.4%, a slight decrease from the 52.8% observed in 2021. Retention was significantly driven by the product portfolio mix whereby the observed results were influenced by the nature of the business underwritten by the companies.

The products transacted ranged from small, medium, and specialized whereas the retention ratio varies accordingly. The retention ratio was observed to be higher for companies with large portfolios in classes like motor, health, marine, and miscellaneous.

Tanzania Insurance Average Retention Ratio, 2018-2022

Tanzania Insurance Average Retention Ratio, 2018-2022

General Insurance Retention

Out of 27 general insurance companies operating in 2022, 13 had a retention ratio above the industry average of 49.4% while the remaining retained below the average. Bumaco had a retention ratio of 87.7%, the highest in the market for the year 2022, followed by Milembe, and Assemble with retention ratios of 86.4% and 85.0% respectively.

On a class-by-class basis, motor and health with retention levels of 84% and 80% respectively had higher retention levels compared to other classes. The retention of the said classes of business is largely contributed by the size of exposure per risk retained.

Life Insurance Retention

The average industry retention ratio for the life assurance business in 2022 stood at 85.7%, the same as in 2021. NlC Life, Bumaco Life, and Sanlam Life had retention ratios above the industry with 100.0% retention, 96.0%, and  90.0% respectively.

Given the relatively low levels of retention compared to the OECD average of 82.9% in 2022, the Tanzanian reinsurance market includes various reinsurance counterparties ranging from local reinsurers, regional reinsurers, local reinsurance brokers, and locally accredited reinsurance brokers.

Local Reinsurance Companies

ln 2022 and 2023, the insurance industry marked an entry of new reinsurance companies namely Pan Afrique Re, and East Africa Reinsurance Company (EARe), marking an increase in the number of reinsurers to four (4) including Tanzania Reinsurance Company (Tan-Re) and Grand Reinsurance Tanzania (Grand Re).

Tanzania Reinsurance Companies Performaces 2021-2022

Reinsurance Performances

The reinsurance companies reported gross written premiums of TZS 201.3 billion in 2022 representing an increase of 21.3% from 166.0 billion in 2021. Tan-Re contributed about 89.3% of reported reinsurance gross premium in the market followed by Grand Re 10.4% and Pan Re 0.4%.

The portfolio of reinsurance gross written premium in 2022 was contributed by Fire 30.5% (2021: 24.6%), Accident 15.5% (2021: 19.0%;), Motor 13.8% (2021: 15.2%), Aviation 11.6% (2021: 17.7%), Health 11.6% (2021: 11.8%), Engineering 8.4% (2021: 3.3%), Marine 4.7% (2021: 5.3%), Other General 3.1 % (2021: 2.6%), and Oil & Gas 0.8% (2021: 2.3%).

From an underwriting perspective, the reinsurance companies recorded an underwriting profit of TZS 5.0 billion in 2022 representing a decrease of 39.8% in underwriting results compared to TZS 8.4 billion in 2021.

ln 2022, the pre-tax profit reported by reinsurance companies was TZS 13.1 billion compared to a pre-tax profit of TZS 12.7 billion in 2021. Tan-Re and Grand Re reported pre-tax profit of TZS 11.8 billion and TZS 1.3 billion respectively whereas Pan Afrique Re reported pre-tax loss of TZS 40 million during the same period.

On the other hand, net assets grew by 23.2% from TZS 97.0 billion in 2021 to TZS 119.6 billion in 2022. The increase was a result of a remarkable increase in total assets compared to liabilities during the period under review.

Key Performance Indicators for Tanzanian Reinsurance Companies, 2021-2022

Key Performance Indicators for Tanzanian Reinsurance Companies, 2021-2022

Local Reinsurance Brokers

In 2022 five (5) reinsurance brokers carried out reinsurance broking business in Tanzania: Afro Asian Reinsurance Brokers, MlC Reinsurance Brokers, Tapex Reinsurance Brokers, Aris RE London, and Willmars Reinsurance Brokers. The number increased to 7 in 2023 with the addition of Lighthouse Reinsurance Brokers, and Minerva Risk Managers.

As of 31 December 2022, local reinsurance brokers recorded total assets of TZS 3.4 billion, representing an increase of 55% from TZS 2.2 billion recorded as in 2021. The increase was mainly caused by the increase in assets for some of the Reinsurance brokers specifically in property and equipment that amounted to a total of TZS 371 million in 2022 compared to the year 2021 where property and equipment were TZS 95 million.

Total liabilities reached TZS 4.9 billion during the year 2022 (2021: TZS 3.7 billion). The increase in total liabilities of 31% was mainly caused by the component of other non-current liabilities and trade & other payables.

Capital and reserves declared by the reinsurance brokers amounted to negative TZS 1.8 billion as of 31st December 2022 representing an increase of 15.8% from negative TZS 1.55 billion recorded in 202. The negative trend observed in capital and reserve was mainly due to the intermediation business, whereby a large part of payables is contributed by premiums yet to be ceded to reinsurers. 

Reinsurance brokers recorded revenue amounting to TZS 3 billion in 2022 representing an increase of 112% from TZS 1.4 billion recorded in 2021. The huge increase was mainly caused by the increase in the collection of commission income for some of the reinsurance brokers.

Operating expenses constituted 60.9% of the company’s revenue. In aggregate, reinsurance brokers incurred a loss of TZS 404 million in 2022 which is an increase from a loss of TZS 100 million in 2021, mainly due to the rise in administrative expenses.

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