What do you need to know about insurance in Tanzania?
Posted: Nov 26, 2018
The insurance theme is newly introduced in FSDT. It is quite an exciting focus area. The main concerns in the insurance theme are insurance, coping mechanisms and risk management. Here, its main role is to acts as the market facilitator. Acting as the market facilitator will help in improving capacity. It also helps in achieving sustainability in the insurance sector so that the needs of poor women, men and MSMEs can be met. The growth in this health sector covers mainly health insurance which has contributed to the growth of the Community Health Funds and National Insurance Health Fund. There is low penetration for certain insurance products like personal accident covers, education insurance and so on.
The growth in the insurance sector has barricades. Mainly, there are two problems. First one is related to the demand issues as there is very low demand for the insurance in Tanzania. The reason behind this low demand for insurance is due to the negative perceptions along with the low understandings.
This negative attitude of the potential customers is the hindrance for the insurance sector. The second one is related to the limited number of distribution channels along with the limited skilled personnel related to the insurance. Furthermore, there are very limited products and limitations are present for the enabling environment.
Along with the National Financial Inclusion Framework (NFIF), the insurance product stands at 30% in 2016 in terms of insurance penetration target. In order to achieve the target and get access to the vast number of people, innovative approaches are adopted along with measures to change the thinking will help in removing the constraints.
Its associated projects are mentioned below:
- Execution of the NMAP - National Microinsurance Action Plan
National Microinsurance Coordinator (MICOORD) was recruited by the FSDT in 2015 for working with TIRA, TWG, SC and industry in order to facilitate the execution of NMAP. It is the main key to the development of indicators for key performance in microinsurance.
- Microinsurance Acceleration Fund (MIAF)
BIMA challenge is coined by the Miaf which is the key to relate the problem of low growth of the MI in Tanzania. It will drive the innovations and it will be driven by the insurers. Its main objectives are to promote the insurance specifically the microinsurance as the effective risk management tool. In addition, it helps in promoting the significance of the management of shocks which have great effects on the livelihoods of the individuals.
- The Insurance education through the National Insurance Education Strategy (NIES)
The National Insurance Education Committee (NIEC) has taken the initiative of this project. It works with the different government organizations and industry along with the private sector for addressing the reasons related to the low demand for the insurance in Tanzania.
- Capacity building for the industry
MI specialists facilitate the MI-based modules and curricula for the comprehensive insurance training. The training sessions are designed in such a way that they meet the market needs. It will assure the application and relevance in the workplace.
Financial Sector Deeping Trust is a Tanzanian based financial services offering company. With more than 10 years of experience in offering digital finance, Insurance, Agricultural & Rural Finance.