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Finaccord’s report titled Bancassurance in Tanzania: Current State and Future Perspectives to 2020, plus the PartnerBASE™ and market data file that accompany it, provides comprehensive and detailed insights into the prospects for bancassurance in Tanzania.

In addition to offering a review of key macro-economic metrics in Tanzania, the research also provides a background to the banking sector through the following information: identification of the ten largest banks by number of retail banking customers; data to illustrate the development of the banking market including number of fully-licensed banks, deposit accounts, branches and ATMs and how each of these have developed since 2005; and review of the value and growth of the consumer mortgage and non-mortgage lending market.

The research then focuses specifically on bancassurance with commentary in several areas: the regulatory environment and general importance of banks as an insurance distribution channel; the insurance product range, operating models and bancassurance partnerships of the ten leading banks; and future outlook for the value of the life and non-life insurance market of Tanzania through to 2020.

Table Of Contents

Bancassurance in Tanzania: Current State and Future Perspectives to 2020
TABLE OF CONTENTS
0.0 EXECUTIVE SUMMARY ... 1
1.0 INTRODUCTION 3
What is this report about? .. 3
The development of the bancassurance channel in Tanzania is the focus of this report ... 3
Rationale . 3
Sub-Saharan Africa hosts a number of fast-growing financial services markets… 3
… with bancassurance poised to grow in several of these .. 4
Methodology ... 4
Macro-economics, banking and insurance sectors .. 4
Survey of banks .. 4
Market data . 5
Definitions ... 5
Investment-related life insurance ... 5
Retirement savings . 6
Risk life insurance ... 6
Accident insurance . 6
Health / hospital cash plans ... 6
Medical expenses insurance .. 7
Personal motor insurance .. 7
Household insurance .. 7
Creditor insurance ... 7
Travel insurance . 7
Agricultural insurance . 8
Commercial insurance 8
Mortgages and consumer finance . 8
Weighted provider share of partnerships .. 8
Operating models ... 9
Abbreviations and exchange rates 9
PartnerBASE .. 9
Finaccord .. 10
2.0 MARKET ANALYSIS ... 11
Macro-economic background .. 11
Gross domestic product and purchasing power parity (PPP) 11
The rapid growth of the Tanzanian economy is expected to continue up to 2020… 11
…although lower income groups have yet to benefit from the economic success ... 11
Total population, age structure and level of urbanisation ... 12
Tanzania's population will expand by a further 9.2 million between 2014 and 2020… 12
… although two thirds of all inhabitants will still be living in rural areas . 12
Political risk 14
The country's index of political stability has improved markedly in recent years… ... 14
Other key indicators .. 15
… as has life expectancy at birth for both men and women .. 15
Mobile phone subscriptions per 100 people surged from 7.6 in 2005 to 55.7 in 2013 . 16
Introduction to the banking sector ... 18
Structure of the banking sector 18
Tanzania's banking sector is characterised by the involvement of a variety of types of institution... 18
National Microfinance Bank lays claim to the largest portfolio of retail customers 18
Six of the ten largest banks are owned by overseas parents 18
Development of the banking sector . 20
Almost 400 new bank branches were opened between 2005 and 2013 .. 20
Consumer lending . 22
The top three lenders control around two thirds of mortgage balances outstanding 22
As elsewhere in sub-Saharan Africa, high interest rates limit faster growth… .. 22
… and non-mortgage lending remains by far the larger segment within total consumer lending 23
Introduction to the insurance sector 25
Premiums for life insurance have been outgrowing those for non-life insurance… .. 25
… although the latter still make up almost 90% of the market total ... 25
The bancassurance market . 28
Regulatory environment ... 28
The central bank and insurance regulator are likely to release new bancassurance regulations in 2014… ... 28
…which are especially likely to have an impact on the distribution of bundled insurance products . 28
Importance of bancassurance as a distribution channel 28
The distribution share of banks in Tanzania's life insurance market seems likely to be very substantial… 28
…although many banks are awaiting regulatory clarification before offering a wider product range ... 29
Product range, operating models and partnerships of the ten leading banks ... 29
Nine of the top ten banks offer insurance products in one form or another .. 29
Policies linked to mortgages and personal loans are available most commonly in Tanzania .. 30
CRDB Bank promotes the widest range of policies, including several stand-alone products .. 30
African Life benefits from partnerships with four banks including National Microfinance Bank 31
Kenyan Alliance also works with four of the top ten banks 31
Absa Life and Heritage are the only captive underwriters identifiable in Tanzania ... 31
Future outlook ... 34
In nominal terms, the Tanzanian insurance market is forecast to grow at a compound annual rate of 16.3% ... 34
This growth, plus new regulations, may help bancassurance to develop further .. 34

LIST OF GRAPHICS / TABLES

0.0 EXECUTIVE SUMMARY ... 1
Bancassurance in Tanzania: key data points ... 2
1.0 INTRODUCTION 3
2.0 MARKET ANALYSIS ... 11
GDP in current prices and PPP (purchasing power parity) per capita in Tanzania, 2008 to 2020 (forecast) ... 12
Total population and level of urbanisation in Tanzania, 2008 to 2020 (forecast) . 13
Population age structure in Tanzania, 2014 ... 13
Key economic indicators for Tanzania, 2008, 2014 and 2020 (forecast) (table) .. 14
Index of political stability, regulatory quality and rule of law in Tanzania, 1996 to 2012 .. 15
Life expectancy at birth in Tanzania, 2005 to 2013 16
Mobile phone subscriptions, fixed broadband subscriptions and fixed phone lines per 100 people in Tanzania, 2005 to 2013 ... 17
Other key indicators for Tanzania, 2005 to 2013 (table) 17
Ultimate holding companies and credit ratings of the ten largest retail banking organisations in Tanzania, 2014 .. 19
Total assets, number of customers and number of branches of the ten largest retail banking organisations in Tanzania, 2014 . 19
Number of fully-licensed banks and deposit accounts in Tanzania, 2005 to 2013 .. 20
Number of branches and ATMs per 100,000 adults in Tanzania, 2005 to 2013 .. 21
Key banking sector indicators for Tanzania, 2005 to 2013 (table) 21
Residential mortgage lending balances outstanding in Tanzania (absolute and per capita), 2009 to 2013 ... 23
Consumer non-mortgage lending balances outstanding in Tanzania (absolute and per capita), 2009 to 2013 .. 24
Key data points for the consumer lending market in Tanzania, 2009 to 2013 (table) .. 24
Gross written premiums for life and non-life insurance in Tanzania, 2009 to 2013 .. 25
Gross written premiums per capita and as percentage of GDP in Tanzania, 2009 to 2013 ... 26
Gross written premiums for life and non-life insurance in Tanzania, 2009 to 2013 (table) .. 26
(table) 26
Segmentation of non-life insurance gross written premiums in Tanzania, 2013 .. 27
Involvement in bancassurance of the ten largest retail banking organisations in Tanzania: provision of bundled and stand-alone products, 2014 ... 29
Overview of provision rates for different types of insurance offered by the ten largest retail banking organisations in Tanzania, 2014 . 30
Bancassurance in Tanzania: provision rates, weighted operating models and weighted provider share of partnerships, 2014 ... 32
Summary of use of captive and joint venture bancassurance partners by the ten largest retail banking organisations in Tanzania, 2014 . 33
Summary of use of external bancassurance partners by the ten largest retail banking organisations in Tanzania, 2014 . 33
Forecast for gross written premiums for life and non-life insurance in Tanzania to 2020 34

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