The insurance industry in Tanzania is one of the poorest in the world. Its penetration is less than 1 percent of the GDP and the figure is much below the level of developed countries.
The informal bloc of industrialized democracies, Group of Seven (G7), accounts for two-thirds of the insurance premiums in the world even though it has managed to cover only little more than 10 percent of the world’s population.
The G7 comprises of the US, UK, Canada, Germany, France, Japan and Italy. These countries spent an average of US$3,910 on premiums per capita in 2012. Compared to this, the premiums in emerging market was US$120 in average in the same year.
In Africa the sector is underdeveloped and most of the African people are unable to afford even insurance premiums. They are still struggling to meet their basic food and other daily needs.
Apart from poverty there are other reasons too for the very slow penetration of insurance in the African nations. Inadequate incentive for multinational companies to enter the continent and less trust to financial service providers are the two major issues.
The judicial systems are very poor in most of the African nations, assessing creditworthiness of the people is way difficult, low human capital is prevailing and shallow financial markets also restricts the insurance companies to enter the market.
According to Tanzania Insurance Regulatory Authority (TIRA), there was a rise of 17 percent in the gross premiums for general and life as well in 2013 in the country and the highest growth was recorded in health class. It grew by 25 percent.