Insurer’s Profitability: A Study of Tanzania Insurance Industry
Keywords:
Insurance, life insurance, non life insurance, ProfitabilityAbstract
Insurance is an instrument of security, savings and peace of mind. There is remarkable prospective for growth in the insurance industry because of diversity and depth of the market. Profitability of insurance companies were further eroded due to losses on investments in volatile capital markets and higher cost of guarantees as well as lower revenues from administration fees. General insurance business in Tanzania experienced a growth of 11. 76% in gross premium income from Tsh.410.7bn/- to Tsh. 459bn/ during the nine month period in 2015 and 2016 respectively. The insurer’s investment portfolio was in favour of term deposits and government securities to shares in the equity market and remained by profitable supported by underwriting income. Total investments increased by 10.61% , the largest share of insurer’s investment assets comprised of bank deposits(49.16%), followed by government securities (18.79%), real estate(16.42%), shares (9.2%), and other monetary investments (0.96%). Insurance sector remained profitable supported by underwriting income. Return on income for general insurers were 8.3%.
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