TANZANIA’S insurance sector is at a center point. Rapid economic growth and rising demand for risk protection are unlocking opportunities.

According to an FSD Tanzania Article on Tanzania’s Insurance Gap: Challenges, opportunities and Solutions dated December 2024, the industry continues to face challenges in public trust and financial strength. 

In recognition of these facts, the Tanzania Insurance Regulatory Authority (TIRA) has made independent credit ratings a regulatory requirement for all insurers and reinsurers, respectively. This move is not only formal, but it is central to building a stronger, more credible insurance market.

Meeting regulatory obligations

TIRA’s guidelines on support and re-insurance management mandate that every licensed insurer and reinsurer obtain an independent credit rating from a recognized rating agency. 

This requirement ensures that capital acceptability is transparent – ratings provide a clear, independent assessment of an insurer’s prosperity and ability to meet claims.

Reinsurance decisions are sound. By using ratings as a benchmark, both insurers and reinsurers can structure reinsurance programmes that meet prudential standards and protect policyholders.

Regulatory supervision is strengthened. Ratings give the regulator an objective tool to monitor financial health across the industry, which makes supervision more data-oriented and proactive.

Despite the passing, recent research shows that only 9 of the 38 licensed insurance and reinsurance companies currently have a public credit rating. This gap highlights the importance for the industry to line up with the regulatory framework and avoid potential compliance risks.

Restoring, growing market confidence

Independent credit ratings also work in a broader purpose: building trust in the insurance ecosystem. Historically, market confidence in Tanzanian insurance has been hampered by perceptions of slow claims settlement and operational inability. 

Surveys and academic studies on health and cooperative insurance schemes consistently find that low levels of trust reduce the interest of buyers to purchase insurance.

Credit ratings help reverse this perception by providing independent verification. A rating is a public statement that the insurer is financially stable and able to complete its obligations.

Attracting international reinsurers. Global reinsurers often require parties to have credible ratings. Rated insurers gain access to a wider pool of reinsurance capacity and better treaty terms.

Increasing policyholder trust. For consumers and businesses a rating is a helpful signal of reliability which supports greater understanding of insurance products.

A call to action for insurers and reinsurers

Obtaining and maintaining a credit rating is now both a regulatory crucial and a strategic advantage for insurers and reinsurers working in Tanzania. Beyond satisfying TIRA’s guidelines, a rating demonstrates transparency, strengthens stakeholder relationships, and can reduce capital costs also.

As the market grows and competition intensifies, those who embrace independent ratings early will be best positioned to capture new business, secure favourable reinsurance terms, and lead the industry toward sustainable growth.