I am delighted to present The Heritage Insurance Company Tanzania Limited’s financial statements for the year ended 31st December 2021. The company continues to integrate strategic sustainable principles in its business operations and investment decisions in line with the industry best practices and advanced digital platforms. Strong capitalization and liquidity remain one of Heritage’s major strengths, as affirmed by the Global Credit Rating (GCR) rate of AATZ for the year 2021.

The economic outlook is positive, with real GDP projected to grow by 6% in 2022, due to increased infrastructure investment, recovery in exports because of the reopening of trade corridors, and improved performance of the tourism sector. Nevertheless, the Global Economic Prospects report released by World Bank in January 2022, stresses that global recovery is set to decelerate markedly amid continued Covid-19 flare-ups. Therefore, Tanzania’s economic recovery is subject to sound domestic policies that will foster a swift recovery that creates a conducive environment for investors. The country’s annual inflation rate rose to 4.2 percent in December slightly higher than the targeted range of 3-4 percent.

Despite all challenges and changes in the way of life caused by the pandemic, the insurance industry across the globe has continued to exhibit tremendous resilience and opportunities for expansion and growth with continued Government support. In Tanzania, these have been manifested through various developments such as mobile insurance technology, registration of the first private-owned reinsurance company, Grand Re, consequently increasing much-needed reinsurance capacity on the local market, excluding VAT on agricultural insurance, and strengthening the TIRA MIS system as well as automating other processes like issuance of a paperless sticker.

At a time of global uncertainty, 2021 without any doubt was a particularly challenging year for the operators in the insurance industry. The company reported a growth of 5% in gross written premium, from TShs 54.1 billion written in 2020 to TShs 56.9 billion written in 2021. There is an increase of 13%in Net Premium Revenue from Tshs 14.8 billion generated in 2020 to TShs 16.7 billion attained in 2021.

A key highlight of the year 2021 was the increase in claims which was contributed by both increase in numbers, a change in reserve methodology implemented early in the year 2021, and the use of actuarial techniques to estimate the technical reserves.

The Company continues to focus on prudently reducing the cost base and on improving the operational cost ratios and as a result, during the year, the Company managed to reduce the operating expense ratio to 42% compared to the previous year’s ratio of 61%.

The company suffered a revaluation loss of Tshs 72.1 million due to a fall in bond yields, despite this, due to prudent investment decisions, the Company’s investment income of TShs 2.8 billion is 15% higher than the previous year.

Briefly, the Company recorded an underwriting loss of Tshs 2.7 billion which was largely driven by a bad claim experience in the year, also, this is the first time that the Company applied actuarial methods in calculating the technical reserves and the results were higher than what the Company used to set. As a result, the Company’s profit after tax declined by 90% to Tshs 85 million from the previous year’s profit of Tshs 867 million.

At Heritage Insurance Company Tanzania Limited, we strive to build a competitive advantage and maintain our position as the obvious and preferred insurer of choice and a risk partner for clients, intermediaries, and reinsurers, and a point of reference for the Tanzania insurance industry.

We are developing our systems and processes to meet the modern demand of customers and business partners. One of the company’s major strengths lies in its ability to integrate its system with its intermediaries. This has facilitated the provision of efficient and effective customer service.

With the ongoing re-orientation of our business towards our customers and channel partners, we are well placed to navigate this tough trading climate and we will take every opportunity to deliver successfully upon our strategy. For the year 2022, Heritage Tanzania maintains an absolute focus on the strategy. Our strategic direction has been embedded in four priority areas: Profitability, sustainable and alternative growth channels, digitalization, and staff empowerment. This approach will support the sustainable growth of the business while enhancing earnings diversification by increasing retail business capabilities.

I express my sincere gratitude to the Tanzania Insurance Regulatory Authority (TIRA) under the visionary leadership of the Commissioner of Insurance.

The success of our business is attributed to the support from our various stakeholders. I would like to, particularly thank our Clients, Agents, Brokers, Reinsurers, Banks, and all Business Partners for their endless support. We look forward to all our stakeholders for their continued support.

Finally, I want to thank the Shareholders and my fellow Directors for guidance in ensuring that the company is well run. I thank Management and staff for their commitment and dedication.