Business report

Banks now control 20% of insurance business (report)

By Gadiosa Lamtey

Dar es Salaam. Banks now turn to 19.9% ​​of insurance premium transactions, just two years since lenders ventured into the business through bancassurance.

Some 20 commercial banks were approved to sell insurance products on behalf of companies in December last year, according to the Insurance Regulatory Authority of Tanzania (Tira).

According to Tira’s quarterly performance report for the three months of April 1 to June 30 of last year, the total insurance premiums written against long-term and general insurance companies was 202, 7 billion shillings.

The report states that of this amount, 40.361 billion shillings (19.9 percent of transactions) were processed through bancassurance agents.

The report reveals that the quarterly market increased 16.57 percent of gross premiums written to 202.7 billion shillings during the period ended June 2021, compared to 173.8 billion shillings for the similar period of l ‘last year.

The performance exceeded the set target of 10.5% annual premium growth for the industry.

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The report indicates that the authority will continue to focus substantial supervisory resources on the bancassurance sector to improve compliance, as well as to facilitate strategies for further development of the bancassurance business into a more dynamic and effective intermediary force.

“During the interim period, general insurance bancassurance activities, a total of 15.969 billion shillings of general insurance premiums were collected through bancassurance agents, which is equivalent to 9.6 % of industry gross written premiums ”, part of the report reads.

In addition to this, a total premium collected by bancassurance agents in respect of long-term bancassurance business amounted to 24.392 billion shillings, contributing 66.7% of the industry’s GPW.

Speaking to The Citizen yesterday, Tira Acting Director for Market Planning, Research and Development Mr. Zakaria Muyengi said, “Bancassurance is one of our distribution channels that we prioritize. “

He said that despite the progress, the level has not yet reached the target because out of more than 40 banks, only 20 banks are licensed for bancassurance.

“This means that more effort needs to be made to ensure that others seize the emerging opportunity,” he said.

He called on already licensed banks to expand their services to rural areas so that more people can easily access insurance services, especially farmers and herders.