Insurance Brokers Oppose Rate Hikes

The President of the Tanzania Insurance Brokers Association (TIBA) Dr. Sebastian Ndege.

Commissioner of Insurance, Mr Israel Kamuzora.

Local insurance brokers have challenged insurance companies to justify the proposed hike on premiums for motor vehicles.

The brokers said they were not involved in formulation of the new rates.

The proposed premiums are between 3.5 and 9 per cent of total value of the insured motor vehicles, up from the current rates of between 1.5 to 2.5 per cent.

The President of the Tanzania Insurance Brokers Association (TIBA) Dr. Sebastian Ndege, also questioned the urgency of introducing the new rates without conducting adequate public awareness.

Dr. Ndege said we want insurers to come up with data to back-up their bid as to why we should change the current premiums to the proposed rates.

Insurance companies have through the Association of Tanzania Insurers (ATI) proposed new premiums to the Tanzania Insurance Regulatory Authority (TIRA) which they want to be implemented from March 1, this year.

However, it is now apparent that the new premiums are unlikely to come into force starting March 1, this year, as industry players are still discussing the proposed rates.

Insurers argue that apart from ensuring stability of the insurance industry, the new premiums are aimed at curbing malpractices such as premium undercutting.

However, brokers are of a different opinion, challenging insurance companies to ‘clean their house first’ as rising premiums alone will not check abuses in the industry.

Dr Ndege stressed that the best solution to malpractices is adhering to ethics and code of conducts to which ATI and TIRA as professional organizations must emphasize.

Pricing will not address the abuses.