Vice President Edward Kiwanuka Ssekandi (left) is welcomed on arrival at
the 44th Conference of the African Insurance Organisation by Mr Ibrahim
Lubega Kaddunabbi (2nd right), the chief executive officer of the
Insurance Regulatory Authority Uganda, and other government and
insurance dignitaries. COURTESY PHOTO
Kampala. Uganda’s insurance
remains one of the lowest in East Africa, with 0.85 per cent
penetration. Insurance companies have been struggling to make inroads
into a market where most people are not convinced or cannot afford to
take on an insurance policy.
President Museveni, in a speech read by Vice President, Edward Ssekandi, noted that insurers have to get out of their comfort zones and find ways of enticing customers.
“…it is therefore important that as sector players you develop innovative ways that will entice consumers and devise newer strategies to penetrate even the underprivileged communities, taking into consideration that most people in Africa are still poor and not yet convinced of the benefits insurance products offer and hold,” reads the speech made at the 44th Africa Insurance Organisation (AIO) conference at the Commonwealth Resort Munyonyo on Monday.
President Museveni pointed out that insurance penetration remains an African challenge.
“This state of affairs is attributed either to the lack of knowledge about insurance products, misunderstanding of the concept of insurance accounts, making choice between fulfilling a basic immediate need versus signing long-term beneficial need,” the speech further reads.
According to the Africa Insurance Barometer 2017 – released during summit – there is still room for growth on the continent because of the low penetration and investment opportunities. In Uganda, one such investment opportunity is the National Health Insurance Scheme, of which a bill was drafted in 2012 and only recently got a Certificate of Financial Compliance from the ministry of Finance. Only Uganda within the East African Community has no NHIS and once it is rolled out, the penetration of insurance services is expected to rise.
President Museveni, in a speech read by Vice President, Edward Ssekandi, noted that insurers have to get out of their comfort zones and find ways of enticing customers.
“…it is therefore important that as sector players you develop innovative ways that will entice consumers and devise newer strategies to penetrate even the underprivileged communities, taking into consideration that most people in Africa are still poor and not yet convinced of the benefits insurance products offer and hold,” reads the speech made at the 44th Africa Insurance Organisation (AIO) conference at the Commonwealth Resort Munyonyo on Monday.
President Museveni pointed out that insurance penetration remains an African challenge.
“This state of affairs is attributed either to the lack of knowledge about insurance products, misunderstanding of the concept of insurance accounts, making choice between fulfilling a basic immediate need versus signing long-term beneficial need,” the speech further reads.
According to the Africa Insurance Barometer 2017 – released during summit – there is still room for growth on the continent because of the low penetration and investment opportunities. In Uganda, one such investment opportunity is the National Health Insurance Scheme, of which a bill was drafted in 2012 and only recently got a Certificate of Financial Compliance from the ministry of Finance. Only Uganda within the East African Community has no NHIS and once it is rolled out, the penetration of insurance services is expected to rise.
Opportunity
“Africa’s low insurance penetration remains the continent’s biggest opportunity, provided the broader array of products and innovative channels are used to access the continent’s corporate array of products and partly untapped retail consumer base, including its growing middle class,” the report, further reads.
Uganda’s insurance premiums – as at 2015 – are estimated at about Shs700b, with insurance companies using mostly traditional means to sell their products. By end of 2017, commercial banks will be able to work as agents, selling insurance products. Known as Bancassurance, estimates from the barometer indicate that it is the single most popular insurance distribution channel followed by the mobile phone.
“Africa’s low insurance penetration remains the continent’s biggest opportunity, provided the broader array of products and innovative channels are used to access the continent’s corporate array of products and partly untapped retail consumer base, including its growing middle class,” the report, further reads.
Uganda’s insurance premiums – as at 2015 – are estimated at about Shs700b, with insurance companies using mostly traditional means to sell their products. By end of 2017, commercial banks will be able to work as agents, selling insurance products. Known as Bancassurance, estimates from the barometer indicate that it is the single most popular insurance distribution channel followed by the mobile phone.
Embrace cooperatives
In his address during an insurances brokers breakfast meeting on Monday organised by CIC Insurance, Mr Aurice Amogola, the chairman Insurance Brokers Association, said the only way all the people can be brought under the insurance cover is by targeting cooperative groups which are already organised.
CIC Insurance, which joined the Ugandan market in 2015, was meeting brokers for the first time in a bid to showcase the scale and potential of the cooperative movement in the industry.
“The cooperative movement through Saccos is a powerful capital mobilisation agent and I would urge insurance brokers to make them a business target because they also have the potential of making accessible insurance services to more people especially in rural areas,’’ he said.
In his address during an insurances brokers breakfast meeting on Monday organised by CIC Insurance, Mr Aurice Amogola, the chairman Insurance Brokers Association, said the only way all the people can be brought under the insurance cover is by targeting cooperative groups which are already organised.
CIC Insurance, which joined the Ugandan market in 2015, was meeting brokers for the first time in a bid to showcase the scale and potential of the cooperative movement in the industry.
“The cooperative movement through Saccos is a powerful capital mobilisation agent and I would urge insurance brokers to make them a business target because they also have the potential of making accessible insurance services to more people especially in rural areas,’’ he said.
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