By Favour Nnabugwu
High management costs are eating into the profits of insurance companies in Tanzania, according to Mr Khamis Suleiman, chairman of the Association of Tanzania Insurers (ATI).
Data provided by industry players show that the claims and management expense ratios are higher in Tanzania compared to Uganda and Kenya, reported The Citizen. For instance, in Tanzania, the management expense ratio stands at 46 percent while the claims ratio is 54 percent, amounting to a total of 100 percent
In Uganda and Kenya, the management expense ratio is 52 percent and 32 percent respectively, while the claims ratio stands at 42 percent and 62 percent respectively. The total for each market is 94 percent, leaving a profit margin of 6 percent.
Mr Suleiman revealed that, based on the data, an actuarial analysis was conducted and the advice arising therefrom is that players in Tanzania’s insurance industry should undertake steps to slash claims and expenses so as to increase profitability