Maendeleo Bank to extend market reach with Bancassurance Regulations

19Sep 2019
Prosper Makene
Dar es Salaam
The Guardian
Maendeleo Bank to extend market reach with Bancassurance Regulations

With the launch of new Bancassurance Regulations in Tanzania recently, bankers including Maendeleo Bank Plc’s Managing Director, Ibrahim Mwangalaba believe that the development will help speed up penetration of insurance products in the country.

Managing Director, Ibrahim Mwangalaba.

Our Correspondent PROSPER MAKENE spoke to Mwangalaba as his bank marks six years since starting operations, read on:

In May this year, Bancassurance Regulations were introduced in the market to guide how financial institutions led by banks work with insurers to provide various products to clients, how important are the regulations to the growth of the industry?

The concept of bancassurance is not new in the world because it is a practice which allows insurance companies and commercial banks work as business partners in serving consumers. With the launch of new Bancassurance Regulations in the domestic market, I can say this will help to increase insurance penetration but also encourage introduction of new product which will provide financial protection to large groups of customers with links to banks.

As the banking network is well established and distributed widely in the country, insurance companies will leverage on utilising the network and reach many at minimal cost.

Can you tell us when did Maendeleo Bank start providing bancassurance services?

Maendeleo Bank has not yet started providing bancassurance services yet but it has been distributing insurance as a registered agent of three principal insurance companies since July 2014. With the new regulations, banks will have to register with Tanzania Insurance Regulatory Authority to distribute insurance products after approval by Bank of Tanzania.

What is market share is Maendeleo Bank targeting once it starts providing bancassurance services in the crowded market?

The philosophy behind establishment of Maendeleo Bank Plc is to offer financial services to underserved population such as Micro Small and Medium Size Enterprises, Savings and Credit Cooperative Societies and Village Community Banks.

The bank is also considering to establish solution based products which will address insurance needs for the various clients, groups as mentioned earlier. In this context, we aim to contribute to insurance penetration target of 50 percent targeted by the government by 2028 through sensitization of consumers and actual selling of insurance products.

What is Maendeleo Bank’s broad strategy to exploit the bancassurance domestic market?

With coming of Bancasurance Regulations, we consider this as an opportunity for Maendeleo Bank to extend its market reach because currently, as I said earlier, we are agents for three insurers only but now we will be able serve up to 10 insurers.

This gives our customers a wide range of choices as to which company they prefer to be served by, but also enjoy a range of addition insurance products. As a bank, our priority is to serve clients with affordable product which will address their financial protection.

How much importance does the bank place on bancassurance? And what steps are being taken to boost your presence in banking sector?

We place a lot of importance on bancassurance because it is enablers the bank to be a one stop shop centre for financial services provision to customers as well as boosting our revenue from non-interest income.

The bank has a strong team of professional insurers with business and banking knowledge but also has designed a marketing program which aims at raising awareness to customers and the public at large on importance of insurance services. We believe that with the kind of team that we have and plans in place, we have will broaden our presence and reach in the market.

What challenges will you likely face in providing bancassurance services?

As pointed out earlier, Maendeleo Bank being one of the players in the insurance industry participated in one way or another in the process of coming up with the regulations which means that bancassurance is an enabler towards successful participation in the insurance business in the country.

The bank in partnership with insurance companiesn, will have to gather information on what the customer need and share with the insurers so as to package or develop product which will address market needs.