Tanzania Insurance Market Performances
While most of the East African countries adopted measures like economy lockdowns and curfews, Tanzania adopted a more relaxed approach whereas economic activities were allowed to proceed with no lockdowns, while preventive measures including observing social distancing, hand sanitization, masks wearing, and reduced non-essential movements and social gatherings were strictly observed.
As a result of such an approach, the country experienced economic growth, though at a lower rate of 4.9% in 2021 compared to an average growth rate of 6.7% attained in the previous five years.
Within this economic framework, the Tanzanian insurance industry GWP amounted to TZS 911.5 billion for the year ended 31 December 2021, representing a nominal increase of 11% from TZS 824 billion written in 2020. The growth in GWP in 2020 was 1.2%. The overall insurance penetration was 1.68% in 2021, 1.55% in 2020, and 1.58% in 2019.
The Eastern zone of Tanzania recorded 84.0% of the total premium written in 2021, followed by the Northern zone (5.6%), the Lake zone (4.4%), the Zanzibar archipelago (2.3%), the Central Zone (1.8%), and Southern Highlands zone (1.7%). The concentration of business in the Eastern zone is largely associated with the enormous volume of business conducted in the commercial city of Dar Es Salaam and the significant presence of insurance business undertakings.
Out of the total GWP of 2021, 40% was transacted directly by insurance companies, while 36.3% was transacted through brokers, 19.7% was transacted through bancassurance agents, and 4% was transacted through insurance agents located throughout the country. The trend of brokers’ share in the market has been decreasing over the past five years due to competition within the market, notably of bancassurance agents which are gaining market share since their introduction in 2019 and held 20% of the market in 2021.
The impact of COVID-19 on the insurance sector has also been counteracted by the execution of the country’s strategic development projects that have continued to see a good contribution to economic funding and thus the insurance sector as well.
The overall Insurance penetration ratio which includes public and private insurance as a percentage of Gross Domestic Product was approximately 1.68% in 2021. The ratio slightly increased compared to a penetration ratio of 1.55% for 2020. In 2019 the overall insurance penetration ratio was 1.58%.
The Tanzania insurance premium per capita for 2021 was TZS 15,334.1 compared to TZS 14,746.8
The insurers’ net worth increased by 4.3% to TZS 416.0 billion at the end of 2021 compared to TZS 399.0 billion at the end of 2020. The insurers’ net worth in 2019 was TZS 327.2 billion.
Total assets increased by 8.4% to TZS 1,278.6 billion from TZS 1,179.5 billion in 2020 while liabilities increased by 10.5% to TZS 862.5 billion in 2021 from TZS 780.6 billion at the end of 2020. At the end of 2019 total assets stood at TZS 1,047.0 billion while liabilities were TZS 719.6 billion.
Insurers’ total investments increased by 7.8% from TZS 872 billion in 2020 to TZS 940 billion in 2021. billion in 2021. During 2019 investment assets were TZS 751 billion, resulting in a growth of 16.1% in 2020.
In 2021, the largest share of insurers’ investment assets comprised of bank deposits including term deposits and cash and bank balances (42.5%), followed by government securities (34%), real estate investments (10.7 %), shares (9.9 %), investments in related parties (1.7 %), and other financial investments (1.3 %).
Investments in government securities increased significantly by 16.9% from TZS 273 billion in 2020 to TZS 319 billion in 2021 due to the high yield of these securities.
Contribution of Commercial Insurance
The total GWP of commercial insurance companies grew by 10.6% to TZS 911.5 billion in 2021 from TZS 824.3 billion in 2020. The growth was 1.2% in 2020 from TZS 814.5 billion in 2019. An increase was on account of an increase in the volume of economic activities which resulted in the purchasing of insurance for protection, an increase in compliance by the public, and aggressive marketing and continued public awareness programs.
The insurance penetration for the insurance business provided by insurance companies only (premiums as a percentage of GDP) for 2021 was 0.58% (GDP: TZS 157,798.5 billion; GPW: TZS 911.5 billion), representing an improvement from the position in 2020 which was 0.56% (GDP: TZS 148,522.1 billion; GPW: TZS 824.3 billion). The penetration stood at 0.58% during 2019 (GDP: TZS 139,641.9 billion; GPW; TZS 814.5 billion).
Contribution of Public Insurance
The National Health Insurance Fund (NHIF), the Workers Compensation Fund (WCF), and the National Social Security Fund (NSSF) altogether accounted for an insurance penetration in Tanzania of 1.1%.
NHIF’s penetration was 0.23% in 2021 with TZS 356.75 billion, 0.22% in 2020 with TZS 323.37 billion, and 0.22% in 2019 with TZS 309.23 billion.
WCF’s penetration was 0.07% in 2021 and 2020 with TZS 106.4 billion and TZS 108.9 billion, and was 0.08% in 2019 with 116.8 billion.
The Social Health Insurance Benefit’s (SHIB) penetration was 0.8% in 2021 with TZS 1,213.1 billion, and 0.7% in 2020 and 2019 with TZS 1,086.3 billion and TZS 926.0 billion.
Contribution of Insurance to the Tanzanian Financial and Insurance Sector Gross Domestic Product
During 2021, the financial services activities including insurance contributed TZS 5,720.8 billion to the GDP representing 3.6% of the total GDP; whereas, in 2020, the said sector contributed TZS 5,259.8 billion to the GDP which comprised 3.5% of the total GDP during the same period. In 2019, insurance and financial services accounted for TZS 4,927.6 billion representing 3.5% of the total GDP for the same period. As one of the financial sub-sectors, insurance, in terms of the gross premium underwritten for 2019, 2020, and 2021 contributed 16.5%, 15.7%, and 15.9% in financial and insurance activities, respectively. The increased cooperation between the insurance sector and financial sector including bancassurance is expected to impact the contribution of the insurance sub-sector as well as the financial sector to the GDP.
Contribution of Insurance to the Agricultural Sector
In 2021, the agriculture sector accounted for 27% of the country’s GDP and employed about 62% of the population. Considering the role of agriculture in the national economy, TIRA, in collaboration with other stakeholders, is increasing the farmers’ awareness of the use of agricultural insurance as a means of protection against various risks
As a result, a total of TZS 1,323.7 million was underwritten as GWP in 2021, versus TZS 159 million in 2020 and TZS 330.0 million in 2019. This constitutes 0.2% of the total general business underwritten during the same year. The largest part of the premium was from the crop insurance class of business (90.8%). Other classes included livestock and fisheries.
Contribution of Insurance to Government Revenue
Insurance companies contributed to Government revenue through payment of corporate tax amounting to TZS 15.3 billion during 2021 representing an increase of 4.8% from TZS 14.6 billion paid during 2020. The increase in corporate taxes is attributed to an increase in investment income.
Insurance companies also contribute to government revenue in terms of payment of Value Added Taxes, Withholding Taxes, and different levies imposed by the Government.
Tanzania General Insurance Market Performances
General Insurance – Underwriting Results
The general insurance business recorded a total GWP of TZS 746.4 billion in 2021, representing an increase of 8.4% compared to a gross premium written of TZS 688.6 billion in 2020. In 2019 gross premium written was TZS 694.9 billion.
General insurance companies recorded an underwriting loss amounting to TZS 2.2 billion in 2021, marking a significant decrease in general insurance business’s underwriting profit as compared to 2020 where there was an underwriting income of TZS 11.7 billion, and in 2019 with an underwriting profit of TZS 23.0 billion. The decrease in underwriting profit was a result of a huge decrease in the movement of unearned premiums by 526.7% between 2020 and 2021.
The change in the movement of unearned premiums has resulted from changes in reporting requirements where some companies have revalued their insurance contracts to reflect the actual values of insurance liabilities.
General Insurance – Class-by-Class Analysis
The insurance product mix in 2021 shows an increase in the share of the motor insurance business at 35.5% (2020: 33.0%, 2019:32.0%). This was followed by fire, 21.5% (2020: 21.4%, 2019: 20%); health, 18.4% (2021: 19.8%, 2019: 19.0%); accident, 7.0% (2020: 7.4%, 2019: 1.8%); aviation, 4.7% (2020: 3.8%, 2019: 4.3%); marine, 4.3% (2019: 4.5%, 2019: 4.2%); engineering, 3.7% (2020: 4.6%, 2019: 8.6%), and oil and gas, 0.1% (2020: 0.4%, 2019: 0.7%).
During 2021, the “other general class” of insurance business accounted for 4.9%, and was made of miscellaneous, 1.4% (2020; 1.9%, 2019: 1.5%), theft, 1.2% (2020: 1.1%, 2019: 3.6%), bond, 1.2% (2020: 0.9%, 2019: 1.7%), liability, 0.9% (2020: 1.1%, 2019: 2.6%) and agriculture, 0.2% (2020:0.02%, 2019: 0.1%).
Tanzania General Insurance Product Portfolio Mix 2021
During 2021, on a class-by-class basis, motor, marine, aviation, and accident classes of business realized underwriting profits of TZS 14. 4 billion, TZS 1.9 billion, TZS 1.1 billion, and TZS 0.9 billion.
However, engineering, fire, health, other general, and oil & gas classes of business recorded underwriting losses of TZS 6.3 billion, TZS 6.1 billion, TZS 5.7 billion, TZS 2.4 billion, and TZS 0.04 billion respectively.
General Insurance – Business Profit
The investment income earned by general insurance companies for 2021 amounted to TZS 54.3 billion, representing a 3.3% increase compared to TZS 52.6 billion earned in 2020. In 2019 investment income amounted to TZS 32.1 billion.
General insurers’ net income after tax amounted to TZS 39.3 billion in 2021, having decreased by 24.1% compared to TZS 51.9 billion recorded in 2020. A decrease in net income after tax was on account of the decrease in net operating income. Net income after tax amounted to TZS 45.8 billion in 2019.
General Insurance – Key Performance Indicators
General Insurance – Retention Ratio
During 2021 the industry retention ratio stood at 52.8%, a slight increase from 52.2% observed in 2020. In 2019 the retention level was 53.5%. The average retention ratio for the past ten years stood at 53.7%.
General Insurance – Loss Ratio
The general insurance net loss ratio increased to 49.7% in 2021 compared to a ratio of 43.5% in 2020. In 2019, the net loss ratio was 44.0%. Gross claims paid increased by 12.8% to TZS 301.9 billion during 2021, compared to claims of TZS 267.5 billion paid in 2020. Gross claims paid in 2019 amounted to TZS 268.4 billion. Taking into account the reinsurance claims recoveries, net claims paid by local insurers amounted to TZS 184.8 billion in 2021, being 10.3% higher compared to net claims of TZS 153.6 billion paid in 2020. Net claims paid in 2019 amounted to TZS 162.5 billion.
General Insurance – Expenses Ratio
The ratio of net expenses to net earned premiums increased to 45.2% in 2021 compared to 44.9% in 2020, and remained higher than the recommended 30.0%. In 2019, the ratio was 42.5%.
General Insurance – Combined Ratio
The industry combined ratio deteriorated to 100.7 % in 2021 compared to 96.8% in 2020. The ratio was above the international recommendable ratio of 100% is an indication of loss.
The deterioration is also shown by the performance of the industry in terms of profits in the general insurance business where during 2021 the industry had an underwriting loss amounting to TZS 2.2 billion which corresponds to a decrease of 119.1% compared to an underwriting profit of TZS 11.7 billion in 2020. In 202 and 2019, the insurance industry combined ratio was 96.8% and 93.7%.
It should be noted that the combined ratio does not take into account the investment income earned by general insurance companies which amounted to TZS 54.3 billion in 2021.
Tanzania Life Assurance Market Performances
Life Assurance GWP 2017-2021 (TZS Million)
As of 2022, six insurance companies transacted life assurance business in Tanzania. In 2021, life assurance companies had underwritten 531,768 policies with more than 4,704,270 lives insured (of a population of 61.7 million in 2022).
Life Assurance Products in Tanzania Market
Life assurance portfolio comprises different products namely term assurance, endowment assurance, funeral insurance, and group credit insurance which constitute the largest share in the market.
Life insurance companies also exercise the important role of managing superannuation funds. Therefore, business is categorized into the following three groups: i. Individual life assurance, ii. Group life assurance iii. Superannuation or pension is also known as other life assurance.
The evolvement of individual life products with saving elements and educational guarantees to beneficiaries has impacted the response of many individuals to purchase insurance for savings and protection of the assured in the event of the death of the policyholder.
Life Assurance – Underwriting Results
Life assurance business volume has increased by 21.6% from TZS 135.7 billion in 2020 to TZS 165.0 billion in 2021. In 2019, GWP for the life assurance business was TZS 119.6 billion.
The growth of the life assurance business was mainly attributed to the increase in awareness following different awareness creation campaigns and sensitization programs. Further growth is anticipated as a result of the introduction of bancassurance agents which is among the sales channels distributing life assurance products.
Life Assurance – Class-by-Class Analysis
Group life assurance experienced a growth of 15.5% from TZS 113.8 billion of premiums recorded in 2020 to TZS 131.4 billion in 2021. Individual life assurance had a growth of 53.6% from TZS 21.9 billion to TZS 33.7 billion from 2020 to 2021 respectively. However, there was a decline of 55.4% in the volume of business for other life classes of business from TZS 57.0 million in 2020 to 25.4 million in 2021.
Tanzania Life Assurance Distribution of Gross Written Premiums in 2021 (%)
Life Insurance – Business Profit
Life assurance companies earned an investment income of TZS 17.2 billion in 2021, which is 1.8% lower compared to the investment income of TZS 17.5 billion recorded in 2020. Investment income recorded in 2019 was TZS 10.0 billion.
Total income (including net premium written, investment income, and other income) recorded by life assurance companies amounted to TZS 160.6 billion in 2021, which is 17.7% higher than TZS 136.4 billion in 2020. In 2019 total income was TZS 114.2 billion.
The total policyholders’ benefits amounted to TZS 95.7 billion in 2021, which is 39.5% higher than TZS 68.6 billion paid in 2020. Policyholder benefits paid in 2019 amounted to TZS 50.6 billion.
Life insurers’ net income after deducting policyholders’ benefits and operational expenses stood at negative TZS 5.5 billion in 2021, representing a significant decrease of 180.6% compared to income of TZS 6.8 billion recorded in 2020.
Life Assurance – Key Performance Indicators
Life Assurance – Retention Ratio
The industry retention for life assurance business in the year 2021 ratio stood at 85.7% which marked a slight increase from 85.0% observed in 2020. The incremental trend of retention ratio in life business is a reflection of ongoing initiatives on localization of life assurance business undertaken in collaboration with the Association of Tanzania Insurers.
Life Assurance – Claim Ratio
Claims paid by the life assurance business increased by 39.5% from TZS 68.6 billion in 2020 to TZS 95.7 billion in 2021. The significant increase in claims/benefits was an account of the increase in death claims during the Covid-19 pandemic. In 2019 policyholder benefits amounted to TZS 50.6 billion.
Life Assurance – Management Expenses Ratio
Management expenses as the percentage of the GWP improved by 1.0% on account of growth in gross premium written from 16.8% in 2020 to 15.8% in 2021. The management expenses ratio was 21.0% in 2019.
Tanzania Insurance & Assurance Intermediaries Performances
Brokers Participation in Insurance Underwriting
Out of the total GWP of 2021 in respect of both life assurance and general insurance businesses (TZS 911.5 billion), 36.3% (TZS 339.6 billion) was transacted through brokers (2020: 46.8%, 2019: 43.4%). The trend of brokers’ share in the market has been decreasing over the past five years due to competition within the market, notably of bancassurance agents which are quickly gaining market shares.
General Insurance Business by Brokers
During 2021, a total of TZS 285.1 billion in general insurance premiums (38% of all general insurance premiums of TZS 746.4 billion) were transacted through brokers, having a decrease of 10.4% compared to TZS 318.2 billion transacted in 2020. Business transacted through brokers in 2019 was TZS 313.0 billion.
On a class-by-class basis, the level of involvement of brokers in underwriting general insurance business differs from one class to another. The highest brokers’ involvement was observed in micro-insurance whereby 100% of the entire premium volume from this class was transacted through brokers. This was followed by other general classes of business with (88.1%), fire (49.2%), engineering (47.2%), marine (46.2%), accident (31.0%), motor (30.9%), aviation (27.9 %) and health (27.8%).
Tanzanian Brokers Contribution to Each Class of General Insurance
Life Assurance Business by Brokers
At the end of 2021, 16 brokers transacted life assurance business (24 in 2020). The total premiums transacted by brokers in respect of a life assurance business amounted to TZS 54.5 billion (33% of all life insurance premiums of 165.0 billion) having decreased by 27.4% from TZS 75.1 billion transacted in 2020. In 2019 life assurance business transacted through brokers amounted to TZS 60.5 billion.
On a class-by-class basis, the highest brokers’ involvement in transacting life assurance products was observed in group life business whereby 41.4% of the entire premium volume of the class, was transacted through brokers (2020: 67.4%). This was followed by other life 10.6% (2020: 12.5%) and individual life 0.2% (2020: 0.3%).
Tanzanian Brokers Contribution in Each Class of Life Assurance
Agents Participation in Insurance Underwriting
Out of the total insurance premiums underwritten during 2021 in respect of both life assurance and general insurance businesses (TZS 911.5 billion), 14.0% (TZS 127.4 billion) was transacted through insurance agents located throughout the country.
General Insurance Business by Agents
During 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 position deteriorated compared to TZS 115.3 billion in 2020. Business transacted through agents in 2019 amounted to TZS 105.9 billion.
The level of involvement of agents in the underwriting of general insurance differed from one class to another. The highest insurance agent involvement in 2021 was observed in motor insurance whereby 60.2% of the entire premium volume collected by agents was from that class of business. The contribution increased compared to 54.1% in 2020. This was followed by health with 13.3% (2020:36.4%), fire with 10.0% (2020:3.5%), engineering with 4.5% (2020:1.2%), bond with 2.9% (2020:0.6%); miscellaneous with 2.9% (2020:0.6%); marine with 2.5% (2020:1.8%), liability with 1.1% (2020:0.5%), accident with 1.0% (2020:0.5%), and remaining classes namely aviation, oil and gas, theft and agriculture with less than 1.0%.
Life Assurance Business by Agents
At the end of 2021, the total premium collected by insurance agents in respect of the life assurance business amounted to TZS 18.0 billion (10% of all life insurance premiums of 165.0 billion). It increased by 95.7% compared to TZS 9.2 billion collected during 2020. During 2019 business transacted through agents amounted to TZS 15.7 billion.
On a class-by-class basis, the highest insurance agent’s involvement in transacting life assurance products in 2021 was observed in group life whereby 99.6% of the entire premium volume transacted by insurance agents was from this class of business. This was followed by individual life (0.4%). In 2020, 71.6% of the entire premium volume collected by insurance agents was from group life, followed by Individual life (28.4%).
Bancassurance Agents Participation in Insurance Underwriting
Out of the total insurance premium written during 2021 (TZS 911.5 billion), TZS 179.1 billion representing 19.7% was transacted through bancassurance agents. In 2020 business transacted through bancassurance agents amounted to TZS 92.5 billion representing 11.2% of the total insurance premiums written.
General Insurance Business By Bancassurance Agents
During 2021, bancassurance agents contributed TZS 90.1 billion in the general insurance business representing 12.1% of the total general insurance premium. In 2020 the amount was TZS 25.5 billion representing 3.7% of the total general insurance business.
On a class-by-class basis, the level of involvement of bancassurance agents in the underwriting of general insurance in 2021 differed from one class to another. The highest bancassurance agents’ involvement was observed in motor insurance with 51.0% of the entire premium volume collected by bancassurance agents. That was followed by fire (14.7%), other general (16.1%), health (11.2%), accident (3%), and remaining classes (less than 3.0%). In 2020 motor insurance accounted for 44.0% followed by miscellaneous at 28%, fire at 13%, health at 7.9%, and the remaining classes below 3.0%.
Life Assurance Business by Bancassurance Agents
Total premium transacted by bancassurance agents in respect of life assurance business in 2021 amounted to TZS 89.0 billion, representing 53.9% of the total life assurance premium. In 2020 the amount was TZS 72.9 billion representing 53.7% of the total life assurance business.
On a class-by-class basis, the highest bancassurance agents’ involvement in transacting life assurance products is observed in group life business whereby 90.9% of the entire premium volume was transacted by bancassurance agents. This was followed by individual life contributing 9.1%. In 2020 the largest portion was in group life with 94.9% followed by individual life with 5.1%.
Tanzania Reinsurance Market Performances
Reinsurance has been a critical area of focus for TIRA due to its contribution to capacitating the industry in both the life and non-life insurance business. The market has a number of various reinsurance counterparties ranging from reinsurance brokers, local insurers, locally accredited reinsurance brokers, and reinsurers advisors.
With its Circular 55/2017, TIRA identifies quality reinsurance players (brokers and reinsurers) and ensures adequate retention for local underwriters while providing guidance on how reinsurance arrangements are to be done.
A number of achievements have been observed in reinsurance since the inception of Circular 55, including:
i. Introduction of Reinsurance Portal which is an online platform that assists local facultative arrangements and regulatory approval processes.
ii. Enhancement of life assurance reassurance treaty programs which resulted in an increase in retention levels for life;
iii. Enhancement of reinsurance functions within insurance companies;
iv. Improvement of general reinsurance treaty arrangements;
v. Increase in the number of reinsurance counterparties
As a result, the number of reinsurance companies licensed in Tanzania has increased from only one, Tan-Re, to three with Grand Re and PanAfrique Re which were licensed in 2021 and 2022. In addition, 22 foreign reinsurance companies are accredited to transact reinsurance business in Tanzania.
Moreover, clause 29 of the circular requires life assurance businesses to be locally placed by 2023.
Retention Level for General Insurance Business
During 2021 the industry retention ratio stood at 52.8%, a slight increase from 52.2% observed in 2020. In 2019 the retention level was 53.5%. The average retention ratio for the past ten years stood at 53.7%.
Retention Level for Life Assurance Business
The industry retention for life assurance business in 2021 ratio stood at 85.7% which marked a slight increase from 85.0% observed in 2020. The incremental trend of retention ratio in life business is a reflection of ongoing initiatives on localization of life assurance business undertaken in collaboration with the Association of Tanzania Insurers.
Reinsurance – Retention Ratio
In the year 2021, reinsurers recorded a retention ratio of 43.5%. The ratio was lower than the retention ratio of 49.7% recorded in 2020 and significantly lower than the ratio of 63.3% recorded in 2019.
Reinsurance – Underwriting Results
The reinsurance companies reported GWP amounting to TZS 166.0 billion in 2021 representing an increase of 18% from 140.6 billion reported in 2020. In 2019 gross premium written was TZS 141.4 billion. During 2021, Tan-Re contributed to about 99.7% of the GWP in the market.
Tanzanian Reinsurance Companies GWP and Total Assets 2017-2021 (TZS Million)
The reinsurance companies recorded an underwriting profit of TZS 8.4 billion in 2021 which represented a slight increase in underwriting results compared to TZS 8.2 billion in 2020. The increase was a result of an increase in premium earned vis-a-vis a stable position in operating expenses during the period under review.
Investment income increased by 22.3% to TZS 4 billion in 2021 compared to 3.3 in 2020. In 2029 it reached TZS 1.9 billion.
In 2021, the pre-tax profit reported by reinsurance companies was TZS 12.7 billion compared to a pre-tax profit of TZS 11.6 billion in 2020, and TZS 8.8 billion in 2019.
Reinsurance – Class by Class Analysis
During 2021, the largest share of total GWP reported by reinsurance companies was fire with 24.6% (2020:32.8% 2019: 27.5%), followed by accident with 19.0% (2020:22.0%; 2019:17%), aviation with 17.7% (2020:7.9%; 2019: 8.3%), motor 15.2% (2020:16.0%;2019: 16.5%), health 11.8% (2020:11.0%;2019:22.4%), marine with 5.3% (2020:4.7%; 2019:4.2%), engineering with 3.3% (2020:5.5%; 2019: 4.1%), oil & gas with 2.3%, and other general with 2.6%.
Reinsurance – Loss Ratio
The net loss ratio of reinsurance companies increased to 52.9% during 2021 compared to 49.5% in 2020. In 2019 the reinsurance companies recorded a net loss ratio of 58.8%.
Reinsurance – Management Expense
During 2021 management expenses to GWP by reinsurance companies decreased to 16.1% compared to 18.7% in 2020, being below the recommendable ratio of 20.0%. During 2019, the ratio was 20.4%. On the other hand, management expenses to net premiums written decreased to 35.9% in 2021 from 38.5% in 2020 being above the recommended ratio of 30%. In 2019 the management expense ratio was 33.2%.
Reinsurance – Combined Ratio
The combined ratio for reinsurance companies in 2021 was 88.8% which represents a slight increase compared to a ratio of 88.0% recorded in 2020. In 2019 the combined ratio was 92.0%.
During 2021, four reinsurance brokers carried out the reinsurance broking business: Afro Asian Reinsurance Brokers, MIC Reinsurance Brokers, TAPEX Reinsurance Brokers, and Willmars Reinsurance Brokers. The number has increased to six with Aris London Reinsurance Brokers, and Minerva Reinsurance Brokers.
As of 31st December 2021, local reinsurance brokers recorded total assets amounting to TZS 2.1 billion which represents an increase of 91% from TZS 1.1 billion recorded as of 31st December 2020. The increase was mainly caused by the increase in cash and bank deposits that amounted to a total of TZS 1.09 billion in 2021 compared to 2020 where cash and bank deposits were TZS 0.24 billion.
Total liabilities comprised TZS 3.72 billion in 2021 (2020: TZS 2.53 billion). The increase in total liabilities of 47% was mainly caused by the component of loans from related parties and trade and other payables.
Capital and reserves declared by the reinsurance brokers amounted to negative TZS -1.60 billion as of 31st December 2021 representing a slight increase of 0.2% from TZS 1.59 billion recorded as of 31st December 2020. The increase was mainly caused by the increase in retained losses to some of the reinsurance brokers.
Reinsurance brokers recorded revenue amounting to TZS 1.07 billion in 2021 representing an increase of 180% from TZS 0.38 billion generated during 2020. The huge increase was mainly caused by the increase in the collection of commission income for some of the reinsurance brokers.
Operating expenses constituted 66.9% of the company’s revenue. However, in aggregate reinsurance brokers incurred a loss of TZS 82 million in 2021 versus a loss of TZS 1.03 billion in 2020. The decrease was due to the reduction of administrative expenses and finance expenses of the local reinsurance brokers.