Insurance firms rebound from Covid slowdown

Tira commissioner for insurance Musa Juma

By Gadiosa Lamtey

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Dar es Salaam. Tanzania’s insurance industry made an impressive recovery from the adverse effects of the Covid-19 pandemic last year, with data showing that the

country’s top ten general insurance companies registered a 34 percent growth in total profits.

Financial statements of insurance firms for the year ending December 2021 show that the ten largest firms - measured by market share, assets and gross premiums – registered a total of Sh69.8 billion in net profits last year, up from Sh46.3 billion in 2020. Analysts say the introduction of Tira-Mis — a portal that manages motor insurance stickers and their respective cover notes online, companies managing expenses – and increased investments were some of the factors that contributed to the performance.

The companies are Alliance, National Insurance Corporation (NIC), Britam, Reliance, Strategis, Heritage, Phoenix, Assemble, Jubilee and Meticulous. NIC accounted for 70.6 percent of the profits.

While general insurance performed well, the situation was not as good for life assurance last year as two of the largest companies – Sanlam Life and Jubilee Life – recorded losses, with experts saying the impact of Covid-19 started to be seen in the area.

Speaking to The Citizen yesterday, the Tanzania Insurance Regulatory Authority (Tira) acting director for planning, research and market development, Mr Muyengi Zakaria, said there were a number of factors behind last year’s growth in profits, including the introduction of online motor vehicles stickers which has helped to curb forgery of documents.

“However, despite the good performance, both the authorities and the stakeholders still have a role to play in ensuring the public is aware of insurance services. We are happy for the industry growth but we call on companies to invest more in awareness,” he said.

Mr Muyengi added that the future is bright for the industry as the introduction of bancassurance and Islamic insurance (takaful), among others, will help in reaching more people. “We call on public now to change the mindset and take the insurance as a priority in their lives and not a luxury,” he said.

The chairman of the Association of Insurers Tanzania (AIT), Mr Khamis Suleiman, said last year’s performance might be good for some companies because investment increased and others managed to minimise costs.

“In 2020, profits were made, but revenue did not increase because investment in the tourism industry was low, with facilities such as hotels closing and many people parked their motor vehicles. But last year, businesses started to recover, and that is what increased profits,” he said.

He said despite the fact that the industry is still facing the challenge of fraud, especially in motor insurance, people are still creating fake damages that lead to the companies to pay huge claims.

“So more work needs to be done in that area,” Mr Suleiman said.

Dr Flora Minja, Strategis Insurance acting group CEO, said among the factors that contributed to growth and profitability of the company is focus on excelling in customer service.

“We believe human resource is a major asset, and we will continue to ensure that staff work in a conducive environment, grow and develop their skills to support the desired growth and direction of the company,” she said