Dar es Salaam, Tanzania The insurance sector in Tanzania is on the brink of a significant transformation following the enactment of the Universal Health Insurance (UHI) law in 2023. Experts are urging service providers to reconfigure their offerings in response to this legislative change.

Surprisingly, the industry reported a 26.7 percent market growth, significantly increasing its contribution to the national economy.

President Samia Suluhu Hassan recently signed the UHI Bill into law, a pivotal step aimed at ensuring comprehensive health insurance coverage for all Tanzanians, striving towards universal access to healthcare services.

Initially tabled in Parliament in September 2022, the Universal Health Insurance Bill faced rejection by Members of Parliament (MPs) concerned about the financial provisions for economically disadvantaged citizens. It was subsequently recalled for review following analysis by the House committee and public feedback on certain sections of the proposed law.

Among the contentious issues was the absence of explicit financing mechanisms for those unable to afford insurance coverage.

Addressing these concerns, Health Minister Ms. Ummy Mwalimu presented a revised bill in October. The revised version outlined revenue sources to cover contributions from economically challenged Tanzanians.

Ms. Mwalimu revealed the government’s plans to establish an equity fund to cover insurance premiums for underprivileged Tanzanians. Additionally, the fund aims to finance the treatment costs of chronic diseases like cancer, kidney, and heart ailments, as well as emergency services such as accident treatment.

“We’ve received numerous complaints about the unaffordable treatment costs for these chronic diseases. The government will bear these expenses,” highlighted Ms. Mwalimu during a parliamentary session.

Regarding the fund’s financing sources, she indicated levies on carbonated drinks, liquor, cosmetic products, gaming taxes, motor vehicle insurance fees, and electronic transaction levies.

However, stakeholders anticipate challenges, acknowledging the complexity of health insurance. They suggest several factors for the government and insurers to consider during the UHI implementation, including designing accessible, affordable, and uncomplicated insurance products for the public.

Regulatory Preparedness

Dr. Baghayo Saqware, the Commissioner for Insurance and head of the Tanzania Insurance Regulatory Authority (TIRA), emphasized the regulator’s readiness to invest in information technology systems to enhance service delivery and curb fraud.

“We’re tasked with preparing a comprehensive work plan demonstrating our readiness to manage the scheme. We’ll soon submit it to the Ministries of Finance and Health. We’ve aligned priorities, including IT infrastructure,” stated Dr. Saqware.

TIRA is poised to establish a dedicated unit to handle the UHI scheme, with allocated budget provisions. The preparations are slated to commence shortly.

“We anticipate rapid growth in the insurance sector with the advent of this universal scheme. It will not only ensure improved health services for citizens but also stimulate economic activities by fostering good health,” Dr. Saqware added.

TIRA intends to expand its regional offices by including specialists for health insurance regulatory services while intensifying citizen awareness campaigns.

Learning from Past Experiences

Dr. Anselmi Anselmi, an insurance expert from the Africa College of Insurance and Social Protection (ACISP), stressed the importance of learning from past experiences, notably citing the Community Health Fund’s (CHF) challenges, which faced a drastic drop in enrollment after initially covering 25 percent of the population by 2020.

He advocated for technological solutions to prevent insurance abuse, recognizing the complexity of health insurance. Additionally, he emphasized the significance of a public-private partnership (PPP) framework and a robust distribution system reaching rural areas.

Performance Overview

The insurance market’s robust growth of 26.7 percent in 2022, reaching Sh1.158 trillion in gross written premiums (GWP) from Sh911 billion previously, reflects the sector’s promising performance amidst favorable global and local economic conditions.

Dr. Saqware highlighted that Tanzania’s overall insurance penetration, encompassing both the public and private sectors, increased by 1.99 percent.

Acknowledging the insurance companies’ contribution to economic growth, he commended their stability, signaling a positive trajectory for the sector.

Dr. Saqware noted an increase in the number of insurance companies to 40 from 36, with Tanzanian firms owning 70 percent of the market share, followed by Kenyan (20.9 percent) and South African (3.5 percent) companies, among others.