State-owned NIC struggling for survival

THE National Insurance Corporation (NIC) Limited is still struggling for survival since the country’s financial sector was liberalised and entry of private insurers in the industry.

The Insurance Board said in a recent report that the going for NIC, which monopolised the country’s insurance market between 1967 and 1998, was now “rough and tough despite a lot of the government’s deliberate efforts to resuscitate the institution.”

The Board Chairman, Mr Peter Ilomo, said since the liberalisation of the industry NIC’s share had consistently dwindled reaching 4.2 per cent of the general insurance market and 27.1 per cent for life assurance business at the end of 2013.

TIRA expects the contribution of the insurance industry to the country’s GDP to grow from the current 1.0 per cent to 3.0 per cent within the next five years. According to a five-year strategic plan by TIRA gross premium in the market is expected to reach 526bn/- in 2014 and grow to 773bn/- in 2016 and up again to reach 1.4tri/- in 2019.

Mr Ilomo was briefing the Minister of State in the President’s Office (Special Duties), Prof Mark Mwandosya, who visited offices of the Tanzania Insurance Regulatory Authority (TIRA) recently.

Failure for NIC to recover was listed by the board as one of the challenges the country’s insurance industry faces. “We hope the government will continue with its efforts to clean the firm’s balance sheet,” he told Prof Mwandosya. Mr Ilomo said the performance of the country’s insurance market was quite satisfactory in 2013, where in general the industry grew by 17 per cent.

Premium underwritten during the year reached 475.8bn/- billion, up from 406.5bn/- in 2012. Assets of insurance firms also grew by 15.2 per cent from 450.5bn/- in 2012, up to 518bn/- last year, while investments were up by 16.3 per cent from 299.8bn/- in 2012, up to 348.6bn/- in 2013.

During the year, general insurance claims settled by insurers grew by 31.4 per cent to reach 218.8bn/-, up from 166.5bn/- in 2012. On the other hand, settled life assurence claims grew by 51.7 per cent from 14.3bn/- in 2012 to 21.7bn/- in 2013.

SOURCE: DAILY NEWS

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