Insurance Sector: An Exclusive Interview with Dipankar Acharya of Jubilee Insurance Tanzania

Interview with Dipankar Acharya, CEO of Jubilee Insurance Tanzania

What is the history of Jubilee Insurance Tanzania?

Jubilee Holdings, which is the controlling office for Jubilee has presence in five countries. We are in Tanzania, Uganda, Kenya, Mauritius, and also Burundi. Out of these five countries, Jubilee is the number one insurer East Africa. In Tanzania, Jubilee has been here since 1998, ever since private enterprise was allowed in insurance. Over these last 20 or 21 years, it has created a good brand name for itself and a lot of people insure with Jubilee because of the Jubilee brand name. The brand is very strong. Here, about 95% of the business was corporate business, and today is the same, which is to say you insure companies rather than individuals. If you look into insurance companies in the rest of the world, you would find that about 60% to 65% is retail insurance, which we call non-corporate business. When I came here about five years ago, I tried to grow the retail part of the business. Now, we have 15% retail and 85% corporate. So, we have been able to change things. One of the main catalysts for doing that and the help that I got was the brand of Jubilee. Individuals wanted to put their money into Jubilee because they thought Jubilee is a very good brand, which may not be possible for some of the other companies in the industry.

What are some of the challenges you are facing in the sector and Tanzania specifically?

One of the major challenges is the fact that people need to have purchasing power for purchasing insurance. Our penetration here is about 0.6% of the GDP. In order to increase the penetration of insurance in the country, and thereby increase the market size of people who are willing to buy insurance, we have to bring about a lot of awareness. I have to invest into publicity, to invest into creation of knowledge. Not only that, there has to be also creation of capability, the skill formation. When you combine all these things, only then can you grow the market. Now, as market leaders, one of the challenges that we face on a day to day basis is how we are able to increase our footprint and threshold into the country. The majority of insurance actually comes out of four cities in the entire country. The biggest challenge here is to convince the person who is in a small town that if he pays the premium, he is actually going to get a service which is worth spending that money on. In the end of 2019, the regulator introduced bancassurance. We are now going to use the bank branches to sell insurance. Some of these banks have about 250 branches so you are going to get a huge footprint. We also want to grow the agency force because these agents come from smaller places and if you are able to sell through those agents, you will be able to reach the far corners of the country.

What is your assessment of the insurance sector and the recent trends?

One of the prime things which we have decided as a company, as Jubilee, is to make people aware of risk management and insurance. Simultaneously, we are running a lot of insurance education.

One trend in the Tanzania insurance market today is that people are trying to look at new distribution channels, for example, bancassurance. There is also the agency channel which is different from the broker channel. Up to now, it was more of a mono line distribution in the sense that it was mostly through brokers. So, 90% to 95% of the business would come through brokers and the balance 5% through something else. But now, we were the first movers in this. Bancassurance happened because the rules were changed by the regulators and then we tried to move along with developing that channel of distribution. We are trying to now harness the agency channel, and as of now, the number of agents that Jubilee has is almost 30% of the entire industry which definitely adds to Jubilee’s credit. If you have a strong agency channel, you will definitely have a better footprint. Apart from that, we also have developed our digital channel around our accident product that we launched where you could even buy the product online. Similarly, on those lines, we also now have the motor insurance and the travel insurance which can be purchased online from your mobile when you are on the go. This is a first in Tanzania and now others are also developing that. We have launched a policy for agriculture, as well. If you see the structure and the pattern of the economy, you will realize that a substantial part of the economy depends on agriculture. We did not have such a very good insurance risk management product which would support the big agricultural segment. Now, with this agriculture product which you can actually buy through your mobile, it will facilitate people from far corners of Tanzania to buy agriculture insurance as long as you have mobile connectivity. We continue with our traditional agriculture products also which you can purchase from the company. But then, this mobile facilitation of agricultural insurance purchase will be a breakthrough. These are basically micro insurance, where you do not expect a lot of premium coming from there. It is more about distributing the product over a large area. The individuals are small, but if you are able to get larger and larger numbers, then total corpus could be big. Also, there is a dual purpose to that which is that you are actually protecting a vulnerable section of the economy which otherwise would go unprotected. The insurance and the risk management would not have reached that section otherwise. Definitely, it involves investment and it involves a lot of risk taking by the insurer. Before you actually get into selling that product, you will have to invest into technology, you will have to invest into building that product, you will have to build the capacity, you will have to build a distribution footprint. The good thing about Jubilee is that by being a big company, a strong company, we are able to do these things. We are happy that we are able to serve a particular segment of the economy which was not served well by insurance and risk management so far.

What has been the impact of COVID on the company and the insurance industry as a whole?

There is hardly anybody in the world today who has not been impacted by COVID. There are a couple of very strong tourist points in Tanzania. One of them is Zanzibar. The other one is Arusha. People come to Arusha to go to the famous parks of Tanzania. A lot of it is foreign tourists who are landing into Tanzania to look at these parks. Tourism was badly hit because people were not traveling. It is not only whether Tanzania had COVID or not, but if the host country from where people would have traveled had COVID, people were not traveling out. The airlines and the other transport means were affected. The hotel capacity ran down to 10% or 5%. Some of the hotels even kept themselves closed. It is only recently that they have started opening up. With the tourism sector getting hit, obviously, the entire revenue stream which used to come from the tourism sector got hit whether it was the tour operators, whether it was the travel agencies, whether it was the hotels. Especially when you did not earn revenues, you would not be able to pay insurance premiums. People shrank their insurance requirements to the bare bones. Our premiums and our revenue were hit and we were struggling. But I am happy to note that over the last few months, things have started coming back again and there is a lot of optimism. I am sure that in another few months, we will be back to where we started in 2019.

What are some of your achievements or success stories for the company?

Definitely, one success is that we were able to have a better distribution system. Obviously, we were ahead of our competitors and we are still ahead of our competitors as far as our distribution and reach is concerned. Also, Jubilee is a very strong brand here and we have been here for 20 years now and people really have a lot of faith in this brand. We have successfully paid claims. Last year, there was a consumer award which was enabled for the insurance segment for the first time and Jubilee won that award. This was through open survey. Jubilee is able to have that client confidence and trust because insurance is all about confidence and trust. If you go to the brass tacks, what you receive from an insurance company is really a piece of paper which says that if x, y, z happens, then you get a claim, and that claim might happen or might not happen. It might happen after three months, six months, nine months, etc. When I am buying that piece of paper by paying a premium, I should have that trust that tomorrow, if this happens, this company is going to come and pay the claim to me. That trust and confidence is the highest thing in the customer’s mind when he or she purchases an insurance policy. So, the value of the brand is very strong and Jubilee takes pride in that. We were also consistently coming out with new products. Even now, we are launching a couple of very good, new products, for example for cybersecurity. We will keep investing in research and development and try to come up with products which would take us closer to the customer and closer to the customers’ needs.

What is your vision for the company in the medium term, three years’ time? What would you like to have achieved for the company?

One of the prime things which we have decided as a company, as Jubilee, is to make people aware of risk management and insurance. Simultaneously, we are running a lot of insurance education. We spend a lot of effort in ensuring that we make those presentations very interesting. We recently concluded our Saba Saba exhibition where each of the insurance companies had their own stalls. We ensured through some new, innovative ideas that we are able to talk to more people, reach more people. We are into a lot of radio where we are able to broadcast about our products and risk management insurance. It is not just advertisement. It is more than that. It is about talking about insurance, the benefits of insurance, risk management, etc. Now, we want to lay more stress on the digital channel because one of the things which has come to us which we learned from this COVID situation is that if you want to reach the customer, you will have to reach them through the laptop. There is no need to move them from their residences. They should sit there and just log into our policies and pay for our policies. In the last three to six months, we have already put some of the simple products on the digital media. But, now the work gets more difficult because there are products that are not very simple. To get them on this will be a challenge, but we are well up to it and we are working on doing that. There is a competition amongst insurance companies for an existing set of clients. You have the big brand names, the big industry leaders, the corporate clients where a lot of people are rushing into those clients to get them. We continue to do that, but we also realize that there is a whole segment of the market which right now is not tapped. These white spaces need to be tapped and a lot of our effort goes into that. In fact, the way we have structured our marketing team is also like that. One segment of the marketing team is just engaged in doing what we are doing already. There are a couple of other segments which are working tirelessly to open up new channels and open up new products. Today, if our penetration vis a vis the GDP is about 0.6 or 0.7, we have a big role to play into pushing this penetration level much higher as a big insurance company and we are doing that.

What CSR activities are you active in?

We are a part of the Aga Khan network. As with all Aga Khan organizations, we spend a lot of time in CSR activities, from redoing some of the school buildings outside of the main cities, the regular blood donation camps, cleaning the beach, cleaning some of the markets, promoting the girl child, etc. There is a lot of activity side by side going on which is a part of our entire Jubilee group culture and we devote a lot of time and energy into these things.

What has been your journey so far and what is your inspiration?

When you get up in the morning, you should be eager to go to the office and do your job. If you are not feeling like it, then that means there is something wrong with your job. At the end of the day, we will end up working eight, nine, or ten hours depending on your profile. Apart from the quality time we spend with our family or on a holiday, we are mostly thinking about our jobs. So, that should be something which should interest us. If it is not interesting you, then you are in the wrong shoes. This is my 34th year in insurance and although I got into insurance by accident, ever since then, I have always liked what I was doing. In the insurance industry, each country will have a different flavor from the other, but the basic structure, the basic backbone remains the same. In terms of the customer’s viewpoint, the regulator’s viewpoint, the insurance company’s viewpoint, there is not much difference between countries. What keeps me going is that I like this.

For more information, please visit: https://jubileetanzania.co.tz.

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