Insurance companies profits tumble, general is worst affected

18Oct 2018
Francis Kajubi
Dar es Salaam
The Guardian
Insurance companies profits tumble, general is worst affected

PROFITS made by insurance companies fell by 68.6 percent from 18.2bn/- in 2016 to 5.7bn/- last year with general insurance being the worst hit.

Commissioner of Insurance

National Bureau of Statistics said in its 2017 Economic Survey report that general insurance sales also decreased by 5.2 percent to 555.3bn/- compared to 585.8bn/- while life assurance increased by 8.8 percent to 80.8bn/-.

“The sales of insurance market for 2017 decreased by 3.6 per cent from 660bn/- in 2016 to 636.1bn/- in 2017,” the NBS report stated.

According to the survey that was released recently, sales for general insurance contributed 87.3 percent of the total insurance sales while life assurance contributed 12.7 percent of the period.

“The decrease in profits was due to a decrease in income derivatives from investments in shares, securities and loans,” added the report signifying that insurance companies have paid indemnity to many casualties of bad loans, poor company performances caused by a slowdown in the economy.

The NBS report however stated that the value of insurance companies’ assets increased by2.9 percent to peak 859.3bn/- from 835.3bn/- during the period under review.

On the other hand, liabilities to insurance companies increased to 569.8bn/-from 567.2bn/- or an equivalent increase of 0.5 percent during the period.

“From that perspective the difference between assets and liabilities of insurance companies increased by 8 percent, rising to 289.5bn/- in 2017 from 268.1bn/- in 2016,” stated the NBS report. Some 31 companies were registered to do insurance business during the period.

In addition, 152 insurance broker were registered during the period compared to 136 brokers registered in 2016, 596 registered insurance agents compared with 575 agents in 2016, and with 55 registered assets and loss assessors compared to 52 officers in 2016.

In a bid to boost the uptake of insurance products in the country, Tanzania Insurance Regulatory Authority launched a ten-year sensitization programme aimed at increasing the percentage of insurance consumption from the current 15 percent to 50 percent by 2028 last April. The 18 months campaign is financed by Financial Sector Deepening Trust (FSDT).