Initial Market Assessment

World Bank

Initial Market Assessment

Autores

World Bank

Editor

Washington, DC

Descripción

Catastrophe exposure in Tanzania is limited and the key perils are drought and flood. These events have minimal impact on GDP but severe impacts on individuals in the agriculture sector, increasing their vulnerability. Thus, while there are merits to developing the agriculture insurance market in Tanzania, less of a case can be made to develop the catastrophe insurance market. Engagement in Tanzania to develop private sector catastrophe risk and agriculture insurance should be seen as a medium to long term engagement. Banking penetration is low, as is insurance and micro-insurance penetration, even when compared to regional countries. In addition, the insurance industry has struggled in recent years with profitability, indicating that insurance technical capacity within the country may be limited. There are low levels of local reinsurance capacity, with the majority of risks being reinsured off-shore. Thus development of catastrophe and agriculture insurance in Tanzania shall involve a multi-year engagement. Initially it is of paramount importance that insurance companies can manage insurance risk correctly (before beginning to think about adding covariate risks to their balance sheets). Expansion of disaster risk insurance into Tanzania could be seen as a second phase of an engagement looking to develop these markets in Eastern Africa, with Kenya targeted in the first phase. Given the comparative advantages of engaging in Kenya (see Kenya note), a potential course of action would be to use Kenya as a demonstration case in east Africa to spark interest in the Government for development of catastrophe and agriculture insurance markets. Using Kenya as a model example, lessons learnt can be applied in Tanzania to look to stimulate the catastrophe and agriculture insurance market. This strategy will also leverage private sector insurance companies that have headquarters in Kenya and field offices in Tanzania (Jubilee for example).

Palabras clave

RISKS, EQUIPMENT, ECONOMIC GROWTH, EARLY WARNING, AGRICULTURAL CREDIT, RISK REDUCTION, FINANCIAL MANAGEMENT, FARMER, MANMADE DISASTERS, INCOME, INTEREST, LIFE INSURANCE, PUBLIC INVESTMENTS, CREDIT AVAILABILITY, GUARANTEES, EXCHANGE, FINANCIAL RESOURCES, PORTFOLIO, INSURANCE POLICIES, INSURANCE SOLUTIONS, MODELS, DISASTER, GOVERNMENT ASSETS, PRICE, CASH TRANSFER, MARKET INFRASTRUCTURE, INSURANCE RISK, VOLCANIC DISASTERS, REGULATORY AUTHORITY, INTERNATIONAL BANK, DISASTER EVENTS, RELIEF SUPPLY, RURAL BANKS, INSTRUMENTS, INSURANCE MARKET, BUDGET, CATASTROPHE INSURANCE, CROP INSURANCE, INTERNATIONAL FINANCE, MORTGAGES, LEVEL OF RISK, RELIEF, NATURAL DISASTER, DISBURSEMENT, FEASIBILITY, INSURANCE MARKETS, INSURANCE PRODUCT, ACCESS TO INSURANCE, FLOODS, PRICE VOLATILITY, OPTIONS, EMERGENCIES, NATURAL DISASTERS, FINANCIAL INSTITUTIONS, VOLCANIC ERUPTIONS, MARKETS, LOCAL GOVERNMENT, INTERNATIONAL DEVELOPMENT, DISASTERS, DISASTER COMMUNICATION, INSURERS, LENDERS, FIRE, FARMERS, RESERVES, FINANCE, BROKER, PUBLIC INVESTMENT, BROKERS, BANKS, MICRO-CREDIT, REINSURANCE, MORTALITY RISK, DROUGHTS, EMERGENCY, EARTHQUAKE, RURAL COMMUNITIES, FOOD SECURITY, ECONOMIC COSTS, MICRO- INSURANCE, POLICIES, DISASTER RISK, CLIMATE CHANGE, DROUGHT, VALUE, MOBILE PHONE, POLICY MAKERS, BANK, LOCAL MARKET, DISASTER RISK FINANCING, BUDGETS, AGRICULTURAL INSURANCE, CLIMATE, DEMAND, MICROINSURANCE, SAFETY NET, BAILOUTS, CONSUMER PRICE, DAMAGE, INTERNATIONAL REINSURANCE, PROPERTY, BIDS, INSURANCE INDUSTRY, DISASTER PREPAREDNESS, MICRO-INSURANCE, DISASTER MANAGEMENT, BALANCE SHEET, MARKET, FLOOD, CREDIT GUARANTEE, POLICY, SOLVENCY, INSURANCE, SOCIAL CAPITAL, MICROFINANCE, SUBSISTENCE FARMERS, MARKET SHARE, SECURITY, INVESTMENT, CREDIT GUARANTEES, RISK, SHARE, BALANCE SHEETS, POVERTY, TREATY, ALLOCATION, FINANCIAL CAPACITY, SUPPLY, INSURANCE SECTOR, DISASTER RISK REDUCTION, EXTERNAL SHOCKS, INVESTMENTS, RISK MANAGEMENT, CONSUMER PRICE INDEX, LENDING, EMERGENCY PREPAREDNESS, EPIDEMIOLOGY, INSURANCE COMPANIES, PRICE INDEX, FINANCIAL SECTOR, SAFETY, INSURANCE PENETRATION, ERUPTIONS, INTERNATIONAL MARKETS, PRICES, GUARANTEE, RISK ASSESSMENT, REINSURER, RISK ANALYSIS