When discussing why life insurance remains underutilised in Tanzania, one explanation usually comes first: people cannot afford it.
It is an understandable assumption. Household incomes are under pressure, many Tanzanians work within the informal economy, and insurance premiums must compete with immediate priorities such as food, housing, education, transport and healthcare.
But affordability may not tell the whole story.
Through TSMR's engagement with insurance-sector stakeholders and broader assessment of Tanzania's life insurance market, another challenge repeatedly emerges: many potential customers do not sufficiently understand life insurance, its benefits, how products work, or why they should buy cover before they actually need it.
This raises an important question for Tanzania's insurance industry:
Is affordability really the biggest obstacle to life insurance uptake—or is the market also facing an awareness, understanding and trust gap?
A Growing Market, But an Uneven One
Tanzania's insurance industry is growing.
According to the Tanzania Insurance Regulatory Authority (TIRA), total life insurance premiums reached approximately TZS 309 billion in 2024, compared with TZS 263 billion in 2023—representing growth of approximately 17.6%.
However, looking beneath that headline reveals something important.
Group life accounted for approximately 85.4% of life insurance premiums in 2024, while individual life contributed only 14.6%.
Chart 1: Tanzania life insurance premiums grew by approximately 17.6% in 2024. Source: TIRA, Annual Insurance Market Performance Report 2024.
Chart 2: Most life insurance business remains concentrated in group schemes rather than individually purchased policies. Source: TIRA, Annual Insurance Market Performance Report 2024.
This distinction matters.
A market dominated by group life can grow significantly while voluntary individual participation remains comparatively limited. Employees may encounter life insurance through employers, lenders or other institutional arrangements without necessarily becoming active individual purchasers.
For insurers looking for the next phase of growth, the opportunity may therefore lie not only in increasing premiums, but in deepening individual participation.
The Awareness Gap
During TSMR's engagement with stakeholders in Tanzania's insurance sector, awareness emerged as an important theme.
The issue is not simply whether someone has heard of insurance. There is a significant difference between recognising the word insurance and understanding:
- what life insurance actually covers;
- how premiums are paid;
- when benefits become payable;
- who receives the benefit;
- whether policies can include savings or investment elements;
- what happens when payments are interrupted; and
- how claims are made.
This distinction between awareness and understanding is important.
Someone may know that life insurance exists while still lacking enough information or confidence to purchase a policy.
TIRA itself has recognised low insurance awareness as an industry challenge and has continued initiatives aimed at expanding insurance education and inclusion.
Infographic 1: The Insurance Awareness Journey — awareness alone does not automatically translate into insurance uptake.
Affordability Matters — But How Do Consumers Define Affordable?
Affordability remains a genuine constraint.
However, insurers may need to think about affordability differently.
The question should not simply be:
“Can this customer afford life insurance?”
It should also be:
“Does the customer believe the value of this protection justifies spending money on it today?”
A household may technically be able to accommodate a modest premium but still prioritise other expenditures if the benefit of insurance is unclear or perceived as distant.
This creates a relationship between awareness, perceived value and affordability.
A premium can feel expensive when the benefit is poorly understood.
The same premium may be perceived differently when the customer clearly understands what risk is being protected, who benefits and what financial consequences the household could face without protection.
Therefore, improving affordability through lower premiums alone may not solve the uptake challenge.
Product simplicity, payment flexibility and clearer communication need to move together.
Life Insurance Competes With Today's Priorities
Life insurance presents a unique behavioural challenge.
Consumers are being asked to spend money today to protect against an event they hope will not occur for many years.
Meanwhile, household expenditure is immediate.
Food is needed today.
School fees have deadlines.
Rent must be paid.
Transport is required tomorrow morning.
The financial value of life insurance, by comparison, may appear distant.
This means insurers are not simply competing against other insurance companies.
They are competing for a place within the household budget.
For life insurance to gain that place, consumers need to understand its relevance to problems they already recognise: protecting children's education, maintaining household income, covering financial obligations and preventing dependants from experiencing severe financial disruption following the loss of an income earner.
There Is Also a Cultural Conversation
Life insurance involves something many people naturally find uncomfortable:
talking about death.
Stakeholder discussions undertaken during TSMR's market assessment highlighted the importance of cultural perceptions surrounding conversations about death and financial preparation for it.
Products centred entirely around death can therefore face an additional communication challenge.
The industry may need to shift the conversation from:
“What happens when you die?”
toward:
“How will the people who depend on you remain financially protected?”
The underlying insurance principle remains the same, but the consumer conversation changes from fear and mortality toward family protection, continuity and financial resilience.
Trust Matters Too
Awareness without trust is unlikely to produce sustainable insurance growth.
A potential policyholder may ask:
Will the insurer actually pay?
How difficult will the claims process be?
What documents will my family need?
Are there exclusions I do not understand?
What happens if I miss a payment?
These questions matter because insurance is essentially a promise about the future.
Unlike many consumer products, customers cannot immediately experience the principal benefit when they purchase a life insurance policy. They are paying today in exchange for confidence that a financial commitment will be honoured later.
For this reason, claims experience, transparency, customer service and clear communication are not merely operational issues.
They are market-development tools.
Distribution May Be Part of the Problem — and the Opportunity
Another question is where Tanzanians encounter life insurance.
The dominance of group life suggests that workplaces and institutions remain powerful channels. But significant opportunities exist beyond formal employment.
Banks, microfinance institutions, mobile platforms, agents, brokers, community organisations and other partnerships could help bring appropriate products closer to customers.
Tanzania already has extensive digital financial-service usage and a population increasingly accustomed to making transactions through mobile channels.
That creates an important opportunity.
The future life insurance customer may not necessarily want to visit an insurance office, complete lengthy forms and make large annual payments.
They may expect insurance to be simple, understandable, accessible and compatible with the financial channels they already use.
Infographic 2: Expanding insurance participation may require meeting customers through channels they already know and trust.
The Opportunity Is Larger Than Selling More Policies
The long-term opportunity for Tanzania's life insurance sector should not simply be measured by the number of policies sold.
It is about expanding the number of households that understand and use insurance as part of their financial planning.
That requires several things to happen together:
Education — explaining insurance in language consumers understand.
Product relevance — designing protection around real household financial risks.
Accessibility — reaching customers beyond traditional insurance offices.
Affordability — creating premiums and payment structures appropriate for different income patterns.
Trust — ensuring transparent products and reliable customer and claims experiences.
Distribution — building partnerships capable of reaching both formal and informal-sector consumers.
From Awareness to Adoption
TSMR Framework: The Life Insurance Adoption Pathway.
This framework highlights why affordability should not be considered in isolation.
Reducing premiums may help. But if consumers do not understand the product, see its relevance, trust the provider or know how to access it, lower prices alone may produce limited change.
So, Is Awareness a Bigger Barrier Than Affordability?
The answer is unlikely to be the same for every Tanzanian household.
For some consumers, income genuinely makes life insurance difficult to afford.
For others, however, the barrier may occur much earlier in the adoption journey: they may not understand the product sufficiently, perceive an immediate need for it, trust the proposition, or encounter an appropriate product through an accessible channel.
The distinction matters.
If the industry's diagnosis is simply “people cannot afford insurance,” the response will primarily be cheaper products.
If the challenge is instead a combination of awareness + understanding + relevance + trust + affordability + accessibility, then the solution becomes much broader.
And therein may lie one of Tanzania's most important life insurance opportunities.
The market does not only need more products.
It needs more people who understand why those products matter.
Sources: Tanzania Insurance Regulatory Authority (TIRA), Annual Insurance Market Performance Report 2024; TSMR insurance-sector stakeholder engagements and market research.
