HISTORY was written in Dodoma recently when the state-owned insurance company, the National Insurance Corporation (NIC) remitted dividend to the government after turning around from years of making losses and starting generating profits.
NIC remitted 1.7bn/- to the government from the profits of the 2016/17 financial year, being 15 per cent of its gross profit margin for the year which ended on the 30th of June.
That marked an important milestone in the NIC journey from a cash-strapped and poorly managed organisation, which survived on government handouts, to a financially strong public institution which competes with rivals in the market and fulfils its obligation to the owner, including paying out dividends.
Gone are the days when the government would entertain loss-making public institutions mired in financial mismanagement and general maladministration. Public institutions are required to leverage their strategic capabilities to generate profit and make returns to the owner.
It is against that backdrop that the government requires them to send 15 per cent of their gross margin profit to the Treasury. And that is what happened with the oldest insurance company, established in 1963 and like most of public parastatals, became largely a liability to the government, bleeding the economy millions of hard earned cash to survive.
After years of making losses, the new turnaround and restructuring strategies started paying off, snapping years of loss making trend and put the company on profitability trend.
The NIC Managing Director, Mr Sam Kamanga was quoted as pledging to provide the government with its contribution out of corporation’s income, the promise that has been fulfilled.
NIC is a public entity that serves public with various types of insurance products and so far it is the only insurance firm that boasts of widespread network throughout the country.
Speaking recently at Dodoma before giving a dummy cheque to the Minister of Finance and Economic Planning Dr Philip Mpango, Mr Kamanga, thanked the government for supporting various public institutions including NIC.
It is out of the government support, some of these organisations stabilised and began generating profits. “The government is supporting us to fulfill our duties of risk management and tax payment to contribution to the economy,’’ said Mr Kamanga.
However, he urged the government to encourage more than 200 organisations under the Treasury Registrar to ensure with NIC, which will assist the corporation to boost its revenue base and hence provide more contribution to the government.
“More than 50 Institutions have responded to the call of the Government to use our insurance services but the rest are not yet insured with us,” he said. The Finance Minister, Dr Mpango commended NIC for good job and pledged continued support from the government.
“When I was inaugurating your Board of Directors sometime last year you promised me that you will take the institution to the next level… I would like to congratulate you for that,” said the Minister.
Dr Mpango called on other 260 public institutions under the Treasury Registrar to emulate NIC and at the same time start using NIC insurance services. He said he was aware that other institutions have contracts with various private insurance companies but insisted them to join NIC after the exist ing contract expires.
The minister warned NIC that it should not relax and instead it should work harder especially on market expansion and on improving its service so as to increase its market share in the highly competitive insurance industry.
He advised NIC to continue offer public education on its services especially to its stakeholders like farmers, pastoralists and the general public.
On her side, the Deputy Minister of Finance and Planning, Dr Ashatu Kijaji called the event as NIC historical moment since its inception 54 years ago and called other public institutions under the Ministry of Finance to borrow a leaf on turnaround strategies.
The Permanent Secretary in the Ministry of Finance and Planning, Dr Dotto James also commended NIC for the outstanding job insisting that his ministry would work closely with NIC for the country benefits.
The achievement comes in the second year of the fifth phase Government with a slogan “Hapa Kazi Tu” and throughout this period great success has been achieved in various fields.
NIC is one of the public institutions, established in 1963. It is the oldest insurance company in the country. “We are proud to be accepted by our clients, this is a Tanzanian Institutions and here is home,” he says.
“The Retired President Kikwete (Jakaya) declared that public institutions should ensure with us especially motor insurance, so when the fifth phase government came into power started to implement the stance,” he says.
He notes that after being trusted by the Government, their side vows to work hard. “We have vowed to work hard and make sure that the government gets a dividend out of our profit,” he says.
He elaborates that NIC has came up with a policy that ensures that the government get dividend out of its profit. He says NIC as a public institution is doing business with the public including private sector so, as the public firm they will make sure that part of its profit is going to the government’s coffers.
“We have a responsibility of contributing to the government coffers, by doing so we will empower our government and thus offer better services to the people.” As a leader, he called on his subordinates to work hard and devote themselves to serve people and put forward patriotism.
“On the issue of accountability I don’t joke. Anyone who does not cope well with my speed should go, we must work hard to bring efficiency in our organisation,” he says. He added that he wants to see people get confidence with NIC and access various insurance services from his organisation.
“I appeal to Tanzanians understand that NIC is their organisation, based here in the country, for them being our customers will allow NIC dominate the market, become economically strong and finally provide significant dividends to the government. The Managing Director, gave assurance to the clients and Tanzanians in general on compensation, he says
“We are among the three companies that pay compensation quickly, we are proud of it and we urge the public not to worry about that,” he said.
About his Corporation network, he says that his organisation offices exist throughout the country and that NIC is the only insurance organisation that has spread throughout the country services and that at moment all their services are computerised to facilitate efficient delivery of services to customers.
NIC future plans are to improve our services to meet customers demand and satisfaction, he said adding for instance, a client who has life assurance policy with NIC will be able to use it as a mortgage for loan from different financial institutions.
He also says they have a plan to introduce agricultural insurance which intends to improve the agricultural sector and employs the majority of Tanzanians. About 70 per cent of the population is engaged in agriculture.
According to him NIC is determined to regain the trust of the population and finally become a major contributor to the economy.