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Inclusive Insurance and Risk Financing in the United Republic of Tanzania

Challenges Faced by the Inclusive Insurance Sector in Tanzania

The inclusive insurance sector in Tanzania faces several challenges that hinder its growth and development. Some of these challenges include:

  • Limited funding: The National Disaster Management Fund (NDMF) has seen a significant decrease in budgetary allocations over the years, with minimal funds allocated to it.
  • Insufficient research: There is a lack of research on the insurance sector, which hinders market development.
  • Low consumer awareness and trust: This is identified as a key challenge for inclusive insurance.
  • Regulatory framework: The microinsurance regulation is 10 years old and has not resulted in much increase in inclusive insurance penetration.
  • Limited access to insurance: Microinsurance outreach was estimated by TIRA at just over 77,000 policies in 2021.

Recommendations to Address the Challenges

To address these challenges, several actions are recommended:

  • Enhance market-based research and development activities: This will help to better understand the market and identify opportunities for growth.
  • Support sector-wide consumer education efforts: Educating consumers about the benefits of inclusive insurance can increase demand and trust in the sector.
  • Improve understanding of the market/enhancing demand: This involves creating a more favorable environment for the provision of inclusive insurance services.
  • Assist TIRA to develop a more effective enabling environment: Facilitating partnerships between insurers, distributors, and other stakeholders can help increase insurance uptake among underserved populations.
  • Facilitate a partnership distribution model: By partnering with local organizations and community leaders, it is possible to reach more people and provide them with access to inclusive insurance services.

Conclusion

The development of the inclusive insurance sector in Tanzania requires a multifaceted approach that addresses the various challenges facing the industry. By enhancing market research, supporting consumer education, improving understanding of the market, assisting TIRA in developing a more effective enabling environment, and facilitating partnerships, it is possible to increase access to inclusive insurance services and promote its growth and development.