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News and Reviews for BUMACO LIMITED

The Impact of Insurance on Economic Growth

by Bumaco LTD on 07/21/20

By Rose Mlay

Insurance is a contractual agreement where the insurer agrees to compensate the loss or damage sustained to the insured party. The insurers receive premium and the insured  receives compensation of loss based on the sum assured. Insurance as a tool for economic growth is handy at managing risks in a cost-effective manner. It does so by managing a pool of funds which is invested within the economy to create ability to compensate the claims that arise.

Insurances as a risk mitigating tool covers a lot of risk aspects such as motor, property, medical, life aspects such as education. These insurance types have great importance in social life because they sustains living standard of people. In addition, insurance helps to provide financial stability in lending organisations. For these reasons we can say that, insurance is shock absorb of the economy.

The key role of insurance in economic growth is based on two fundamental aspects. First, is investment made by insurance companies. Insurance companies collect premium in advance of any claim so insurers can pool the premiums into mid and long-term investment. 

Second, insurance influences the interest rates. It provides pool of funds consequently creating a supply of money. In addition, insurance cover reduces risk to financial lenders consequently reducing the interest rate. For instance, consumers and organizations often need to apply for a loan to make a significant purchase or start or expand a business. Before a lending institution will finance a home or a car, or provide backing to entrepreneurs, consumers or organisation, proof of insurance is often required to cover any potential damage (e.g., fire) and assure that loans will be repaid. Lenders can offer a lower interest rate than they could if no insurance were available.

Thus, insurance is an integral part of the economy, performing a variety of important functions. Not only do insurers provide financial security and peace of mind to households and businesses, but they are a vital source of long-term capital, providing stability to financial markets and the overall economy. Without the guarantee of insurance most businesses could not operate as they do today.

Effective Utilisation of Human Resource

by Bumaco LTD on 06/23/20

By Msifuni Kwayu
Organisations invest significant amounts of resources on their  staff with the expectation of achieving business objectives. For example, organisations invest in training, development and staff welfare. Investing on human resources without proper management skills can jeopardise the expected outcomes of the investment. For instance, organisations can invest significantly on staff remunerations but without proper management staff may shirk on their responsibilities.
There are several reasons that can render investment on human resource ineffective. In the modern era, the use of mobile and social media can distract staff from their daily work processes, which sometimes pushes the management to ban such technologies in organisation premises. Despite this negative influence of contemporary technologies in organisation, Kwayu et al (2018) suggest that social media technologies enhance internal communication and are integral in supporting daily work activities within organisation. Thus, management should be cautious on restricting the use of social technologies in organisation. Especially, when considering such technologies are essential for knowledge sharing within organisations. 

The challenge with effective utilisation of human resources is that there isn't a clear strategy. However, this implies a multiplicity of strategies that could make organisations realise their objectives. In my personal view, the best strategy is to create self-awareness among employees and make them own the objective of the organisation. This will help employees to personalise the objective of the organisation and consequently set their own adjective that align with organisational objectives. Pursuing this strategy will provide personal growth to staff and better returns to organisations. Contrary to this, staff will be fooling themselves and overtime the organisation might fail to realise its objective or to maintain the staff. Thus, as Robert Nesta suggested that “you can fool some people for sometime but you can not fool all the people all the time”. This signifies that the objectives of the organisation should align with objectives of its members and vice versa. Finally, achieving effective utilisation of human resource in organisation is rooted on virtues such as integrity, honesty and stewardship from the organisation and its members

Kwayu, S., Lal, B. and Abubakre, M., 2018. The impact of social media on internal communications in the Tanzanian Telecom Industry. In Emerging Markets from a Multidisciplinary Perspective (pp. 119-131). Springer, Cham. https://doi.org/10.1007/978-3-319-75013-2_11

Life Insurance and Investment

by Bumaco LTD on 06/12/20

By Vicent Kweka

Life insurance is a contract between an insurance policy holder and an insurer, where insurer is supposed to pay sum of money or benefits in exchange for a premium, upon death of an insured person or when policy of insurance matured. Life insurance is the best way to save for future purposes. For instance, you can buy life insurance for the purpose of enhancing your wealth in the future.

There are two fundamental questions for an individual to reflect before purchasing a life insurance. First, an individual must understand why s/he wants a life insurance and second because life is about life an individual should ask himself what if s/he dies how will s/he leave his/her dependents. Further, on the second question an individual should also ask himself what if s/he doesn’t die? Will s/he have enough or secured funding to finance his expenses.

There two main reasons for buying life insurance. First, is protection and second is investment. For the former reason, one buys life insurance to protect his family (dependents) in case of pre-mature death. Related to this, individual can buy life insurance for the purpose of leaving an inheritance, or gift to charity. Thus, life insurance helps to protect beloved ones, institutions or charities from suffering financial hardship in case of unexpected death. For the latter one, life insurance is a form of saving when the policy matures. In addition, life insurance is instrumental for investing in children’s education. Similarly, life insurance is an investment for retirement as well during uncertain times such as when an individual suffers total disability or critical illness.

There are different types of life insurance depending on your lifestyle, family structure, and financial position. In addition, life insurance can be customised to meet your needs. For example, Bumaco Life Insurance offers the following insurance plan which have elements protection and saving. These are endowment plan, anticipated plan, education plan and group endowment. For instance, anticipated plan ranges from 9 years to 25 years. It provides both protection and saving. the policy holder of plan has a chance to benefit three times in a time-covered in the plan. For example, after first three years a policy holder can receive 20% of the benefits. Again, after another period of three years the policy holder can receive another 20% and the rest (60%) can be claimed at the maturity of the policy. Furthermore, the anticipated policy offers the policy holder an option of receiving whole amount in lump sum after maturity of the policy. Similar, to anticipated plan, the endowment plan matures after 10 years or beyond and its benefits are claimed on a lump sum after maturity or upon death.  


The challenge with life insurance is that majority think it is only paid when they die and if death doesn't occur, they have lost the premium. This is a misconception. Life insurance is different from general insurance where premium is not recovered when there is no claim. This is the reason why life insurance is also a form of saving. It is saving, because upon maturity of the policy the insured receives the lump sum and its protection because the beneficiaries of the policy receives the sum assured upon death of the policy holder.