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Tanzania approves microinsurance regulationNew opportunities in a growing marketOver 120 insurance experts participated in the Learning Session Tanzania, which took place on 24 and 25 March 2014 in Dar es Salaam. The Tanzanian Insurance Regulatory Authority has just approved new regulations for microinsurance. |
With around 7% of the country’s population having access to insurance, Tanzania is one of the insurance leaders in Africa. However, the country still has an enormous untapped potential to improve access to financial products. One of the key drivers of action to change the situation is the Tanzanian Insurance Regulatory Authority (TIRA), which has just approved new regulations for microinsurance. Over 120 insurance experts participated in the International Microinsurance Conference – Learning Session Tanzania, which took place on 24 and 25 March 2014 in Dar es Salaam. Around 20 speakers from all over the world presented findings on topics important for the Tanzanian market. Case studies on how to develop microinsurance in Nigeria and Zambia, new developments in agricultural insurance and a discussion of the business case for microinsurance were key components of the agenda. The findings of these sessions were used to devise recommendations on how to support the market in Tanzania. Important milestones reached Most importantly, TIRA has approved a new microinsurance regulation, which was presented by the Insurance Commissioner, Mr. Israel Kamuzora, at the event. The new regulations include comprehensive educational requirements for agents (distributors of microinsurance) with the goal of providing customers with value. The rapid settlement of claims is one of the most challenging requirements in the regulation. Insurers will be required to settle microinsurance claims within three working days from the date of receipt of the claim. If more time is needed to settle a claim, the insurer will have to obtain an extension of not more than five days from the Commissioner. It remains to be seen how the industry will respond to these requirements, which are indeed consumer friendly but very challenging for the industry. How can the development of microinsurance be accelerated? Among the various takeaways from the Learning Session Tanzania – produced by the participants in an “outlook session” – were the following: Microinsurance is an interesting market that plays an important role in the fight against poverty, but it needs long-term investment. Building upon existing infrastructure and exploiting existing distribution channels such as microfinance organisations may be a way to develop a successful business more rapidly. One of the key factors for success is the implementation of cost-effective distribution and servicing channels. The use of mobile phones in that context seems to be promising. In the long run, microinsurance requires a sustainable business model and products have to achieve scale. Providing products that are really needed and provide value is a first important step towards attracting microinsurance customers. However, timely and reliable payment of claims is a key factor in retaining them. Only if clients can rely on their insurance will the trust that is so important for the development of an insurance culture be built up. In his closing remarks, Mr. Kamuzora thanked the organisers and stressed the importance of involving development partners in carrying the microinsurance agenda forward. “MFIs and other stakeholders should team up with insurance players in the market to help Tanzanians get access to financial services through micro-lending and microinsurance” said Kamuzora. Looking back at what Tanzania has achieved in the past 18 months, the Munich Re Foundation will certainly take up this responsibility and support the process whenever we are asked to do so. _________________________________________________________________ _________________________________________________________________ |
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