The insurance sector in Tanzania is regulated by the Insurance Act of 2009 (as amended). The sector plays an important role within the national economy by providing the national underwriting capacity for risks and contributing towards mobilization of savings for sustainable economic development of the country. The true significance of the insurance sector lies in the fact that it enables the economy to operate efficiently and effectively. Without a reliable mechanism for risk mitigation, most of the economic activities would be exposed to risk. A safe and stable insurance industry is vital for underwriting stability and confidence in the country’s economic system. Therefore efforts for improving the performance of the economy and the living standards of the population must give particular attention to development of the insurance sector. According to the reports by TIRA by September 2016 the insurance business experienced a growth of 11.76% in gross premium income from TZS 410,741 million during the period ended September 2015 to TZS 459,036 million during the period ended September 2016.

The Insurance Act of 2009 as amended has regarded local participation in the sector as it has clearly stipulated the number of controlling shares, paid up capital or voting rights required to be held by Tanzanians in insurance companies and brokers. It further provides that all insurance cover effected by a Tanzanian resident or a Tanzanian resident company of any class or classes shall be placed with a Tanzanian insurer. According to TIRA reports there are 31 licensed insurance companies and 124 insurance brokers.

Despite having a good legal framework the sector still faces challenges such as low underwriting capacity to participate in key emerging sectors of oil and gas due to low technical and financial capacities. This will lead to fronting of significant insurance placements to offshore insurance companies thus reducing financing resources to be retained locally for economic development. There is also insufficiency of key insurance disciplines including actuarial science due to low capacity of training institutions to offer qualifications which meet international standards.Further, some of the multinational organizations do not disclose that they have insurance outside and repatriate premium as ‘other’ expenses discreetly. Some of the organizations also deliberately exaggerate the scope of cover taken outside the country in order to eliminate the capability of local insurer’s participation.