Regulatory Authority (TIRA) contemplates making property insurance compulsory as a strategy to increase awareness and penetration of insurance products in the market.
TIRA also plans introducing professional indemnity insurance to provide mandatory cover for all professional service providers like lawyers, medical doctors and engineers.
“With property insurance, the regulator aims at capturing all owners of commercial buildings and homes to buy insurance cover that winitially voluntary,” Commissioner of Insurance Dr Mussa Juma told the ‘Daily News’ in an interview in Dar es Salaam, recently.
He said compelling owners of homes and commercial buildings to buy insurance products, TIRA intends to transform more insurance products which were initially voluntary into compulsory.
Dr Juma argued that increasing number of compulsory products in the market will lead to more people having access to insurance cover that will contribute to improvement of their living standards.
Currently, majority people have in mind motor insurance as the only mandatory insurance product although health insurance, especially the National Health Insurance Fund (NHIF) is gradually becoming obligatory as well.
Majority people with NHIF cover are employees of formal organisations that provide health insurance cover to their workers.
“Compulsory insurance is likely to boost penetration and awareness of insurance into the wider market, consequently increasing the number of Tanzanians with access to various insurance products,” said Dr Juma.
NHIF system did not come overnight but with the government’s concerted efforts, including significant investment that enabled the product to reach many Tanzanians.
Insurance sector’s penetration and contribution to the Gross Domestic Product (GDP) remains as low as one per cent.
According to Tanzania insurance market performance report for the nine-month period of 2018, the total volume of business, in terms of gross premium written for both general and life assurance businesses increased by 7.7 per cent from 490,364m/- during the period ended 30 September, 2017 to 527,962m/- in September last year.
This implies that during the period, the market recorded favourable results attributed to new systems in place—Tanzania Insurance Import Portal (TIIP) and Motor Insurance Stickers (MIS)—the aggressive marketing and public awareness programmes.
Furthermore, the general insurance product mix shows a share of motor insurance business at 34 per cent followed by health at 23 per cent while fire and accidents stand at 20 and eight per cent, respectively. Other classes shared the remaining 15 per cent of total general insurance business.
Life assurance, on the other hand, was dominated by group life class at 79.2 per cent, followed by individual life 19.4 per cent.
Most of the classes performed well during the period under review compared to similar period in 2017, with exception of four classes—engineering, marine, health and other general—that registered a slight decrease.
Oil and Gas classes improved significantly during the period under review with a 422.6 per cent increase as compared to previous year.
Aviation class improved with 90.4 per cent rise compared to the previous year, with the rejuvenated Air Tanzania Company Limited credited with the expansion