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Capital and skills gap hamper deepening insurance in Tanzania

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By Gadiosa Lamtey

Dar es Salaam. Lack of capital, skills gap and mismatch in the insurance sector have been reported among the challenges facing the sub-sector which is still lagging behind in contributing to the economy due to a low penetration.

The Managing Director of the National Insurance Corporation (NIC), Dr Elirehema Doriye, said the capacity of underwriting companies is still low, which means that part of the insurance business is going overseas as it is not cannot afford to pay claims on time.

He said Friday night at the event organized by Mwananchi Communications Limited (MCL) to celebrate 60 years of financial industry independence. The theme of the event was: Growth, challenges and future of the financial sector.

“Before independence, most users of insurance products were foreigners and much of the insurance business went abroad, but even after independence challenges remain, including skills, capital and knowledge, ”said Dr Doriye.

However, to meet the challenges, the government has developed the Financial Sector Master Plan 2020/2030 which, for the first time, provided the framework for what should be achieved over the next ten years.

“For many years, insurance was a sub-sector with no goals, but now we have it,” he said.

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In addition, the insurance market still does not have an insurance policy that would create a framework for how to conduct insurance business, he said. “So something must be done to ensure that the implementation of insurance schemes produces the desired results,” he argued.

One of the goals, he stressed, is to increase the number of insurance users from 20% currently to 50% adults over the next ten years. He observed that a large number of users were currently based in urban areas, with stakeholders calling for inclusion of all, i.e. extending services to rural areas.

The insurance sector is still somewhat conservative distribution channels. We must do more to ensure accessibility, distribution to be more efficient and affordable. We are now taking up the challenge in bancassurance. Bank it has a great attraction of customers. The best way is to produce more products based on microinsurance.

On the other hand, Tanzania Insurance Regulatory Authority (Tira) Insurance Commissioner Dr Musa Juma shared the same comment: Capital is a challenge for the insurance company so that it can provide better products and pay indemnities to clients. “Capital is a very important factor. It is necessary to consider how capital can be obtained using capital markets and other means. “


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