Commissioner for Insurance Baghayo Saqware,
Dar
es Salaam — Tanzania has seen a significant growth in insurance
coverage over the years, but a majority of low-income earners across the
country are yet to reap the benefits--more so, in micro-insurance.
Mr Mwale Doto, who
has been running his farm for about eight years, bears a testimony that
epitomises the reality of many farmers who are also a potential market
for investors in insurance business.
Mr Dotto has been earning about Sh1.5 million after each farming season and from this, he saves about Sh 800,000.
He spends the rest
on welfare and family expenditures as well as fuelling his rickshaw. Mr
Dotto places too much value on his farm, which is located at Masaki in
Kisarawe and the rickshaw. He spends most of his time tilling, but also
finding time to transport passengers in the evening.
His farm is about
38 kilometres from Dar es Salaam, but Mr Dotto transports his tomato
produce to the city using the tricycle, which is commonly known as
Bajaj.
My life not insured
"The bajaj is
insured, but I am also looking forward to insuring my small farm if this
kind of service is brought to us," said Mr Dotto in an interview with
The Citizen.
However, even as
his public transportation job has risks involved, Mr Dotto has not
ensured his life because he is not aware there are products of this sort
on the market.
Just like Mr Dotto,
many workers do not ensure their lives. Not that they do not care, but
because they cannot afford the services, experts say. He said: "When I
spend for my family, farm and tricyle requirements, I am always left
with little to pay for other insurance services."
Without life
insurance, experts further say that low income earners are exposed to
risks that threaten their wellbeing. According to the 2017 Tanzania
FinScopesurvey, the country still has a room for growth especially in
ensuring micro insurance reaches majority in rural areas.
Continentally,
micro insurance accounted for 1.1 per cent of the total insurance
premiums on the continent with South Africa leading, says a 2015 report
on the Landscape of Micro insurance in Africa.
To encourage more
low income earners into the insurance plan, Financial Sector Deepening
Trust (FSDT) launched a 12-month campaign in Tanzania, dubbed, 'Bima
Challenge Fund.'
This, according to
the FSDT Executive Director, Mr Sosthenes Kewe, was meant to accelerate
the development of the micro insurance sector in Tanzania with a primary
focus on the low-income market segment.
"There is a huge
gap in insurance penetration of the low-income market segment in
Tanzania and our hope is that the Bima Challenge can address this with
some innovative products that will touch the lives of individuals and
families who fall within this category," he said. It works by inspiring
innovation and putting in game-changing ideas that would drive and
overhaul the way the Insurance business works in the country.
Speaking to The
Citizen, the chairperson of the Micro insurance Technical Working Group,
Mr Julius Magabe said that the campaign is an opportunity to
revolutionize the insurance sector.
He said it would
open a lot of doors for both the consumers and companies to benefit. He
believes that the market players will grow, strengthen their product
offerings, offer more efficiency to their clients, and build more
capacity in terms of distribution channels and product delivery.
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