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By FINNIGAN WA SIMBEYE, 18th December 2010 @ 12:00, Total Comments: 0, Hits: 116
Over 100,000 government vehicles are scheduled for insurance starting next financial year, after cabinet approves a proposal by experts from Tanzania Insurance Regulatory Agency (TIRA) and Institute of Finance Management (IFM).
A senior Treasury official who preferred not to be identified, said the initial plan was to have all government cars insured this financial year.
"As you know this was an election year with lots of changes in government," the official said.
He said the expert reports which was presented by TIRA to Ministries of Finance and Economic Affairs Infrastructure Development earlier this year, has clearly recommended that public cars be insured to reduce loss caused to taxpayers, once such vehicles get lost or are damaged in accidents.
Director General of TIRA, Israel Kamuzora said the exercise to insure government cars had already started in Zanzibar. "Effective this year in Zanzibar all government cars were insured," Mr Kamuzora said.
He said his office hopes that the government would make a final decision on the experts' proposals soon, but declined to state exactly what is contained in the report. Currently all government and donor funded projects' cars are not insured.
"We have done our expert work and are now waiting for policy makers to make final decisions," Kamuzora noted. The move will lead to an over 50 per cent growth in motor cover insurance premiums in a sector which is dependent on private car owners.
Insurance industry remains one of the fastest growing in the economy with a growth average of 33 per cent according to TIRA report covering 2007.
TIRA board Chairman, Prof Mgongo Fimbo, said in the report that the target growth was 15 per cent per annum.
In another development, National Insurance Company has said that deliberate move should be made to allow state owned National Insurance Corporation of Tanzania Limited insure the bulk of government cars when the exercise start next fiscal year.
NIC Acting Managing Director, Justin Mwandu told the 'Sunday News' that the corporation which is undergoing restructuring has the potential to compete with private insurance firms in the market.
"When the tender is floated we will bid and I am sure we will succeed because we are now strong," said Mr Mwandu.
The state owned insurance giant which has been in financial doldrums for several years, is burdened by a backlog of bad debts and stiff market completion following liberalization of the sector in which it once monopolized.
Mwandu, however, pointed out that as a way to support the struggling conglomerate strengthen its financial position as it restructures, the idea of giving NIC preferential treatment is not bad.
"It shouldn't necessary be exclusive rights to insure all government cars but some significant proportion will do," Mwandu argued.
During the period, the industry recorded a record improved in underwriting from 460m/- in 2006 to 2.75bn/-.
Once dominated by two state owned insurance companies, National Insurance Corporation Tanzania Limited and Zanzibar State Insurance Company Limited, the industry has more than 10 companies, 300 brokers and tens of hundreds of brokers.
Over 100,000 government vehicles are scheduled for insurance starting next financial year, after cabinet approves a proposal by experts from Tanzania Insurance Regulatory Agency (TIRA) and Institute of Finance Management (IFM).
A senior Treasury official who preferred not to be identified, said the initial plan was to have all government cars insured this financial year.
"As you know this was an election year with lots of changes in government," the official said.
He said the expert reports which was presented by TIRA to Ministries of Finance and Economic Affairs Infrastructure Development earlier this year, has clearly recommended that public cars be insured to reduce loss caused to taxpayers, once such vehicles get lost or are damaged in accidents.
Director General of TIRA, Israel Kamuzora said the exercise to insure government cars had already started in Zanzibar. "Effective this year in Zanzibar all government cars were insured," Mr Kamuzora said.
He said his office hopes that the government would make a final decision on the experts' proposals soon, but declined to state exactly what is contained in the report. Currently all government and donor funded projects' cars are not insured.
"We have done our expert work and are now waiting for policy makers to make final decisions," Kamuzora noted. The move will lead to an over 50 per cent growth in motor cover insurance premiums in a sector which is dependent on private car owners.
Insurance industry remains one of the fastest growing in the economy with a growth average of 33 per cent according to TIRA report covering 2007.
TIRA board Chairman, Prof Mgongo Fimbo, said in the report that the target growth was 15 per cent per annum.
In another development, National Insurance Company has said that deliberate move should be made to allow state owned National Insurance Corporation of Tanzania Limited insure the bulk of government cars when the exercise start next fiscal year.
NIC Acting Managing Director, Justin Mwandu told the 'Sunday News' that the corporation which is undergoing restructuring has the potential to compete with private insurance firms in the market.
"When the tender is floated we will bid and I am sure we will succeed because we are now strong," said Mr Mwandu.
The state owned insurance giant which has been in financial doldrums for several years, is burdened by a backlog of bad debts and stiff market completion following liberalization of the sector in which it once monopolized.
Mwandu, however, pointed out that as a way to support the struggling conglomerate strengthen its financial position as it restructures, the idea of giving NIC preferential treatment is not bad.
"It shouldn't necessary be exclusive rights to insure all government cars but some significant proportion will do," Mwandu argued.
During the period, the industry recorded a record improved in underwriting from 460m/- in 2006 to 2.75bn/-.
Once dominated by two state owned insurance companies, National Insurance Corporation Tanzania Limited and Zanzibar State Insurance Company Limited, the industry has more than 10 companies, 300 brokers and tens of hundreds of brokers.
