Lack of trust, vague policy documents hurting insurance penetration in Uganda

 


BY PAUL TENTENA

Rita Namakika Namono, the Chairperson of the Insurance Appeals Tribunal has said continued lack of trust and confidence and vague policy documents from insurers to their customers will continue to affect the rate of insurance penetration in Uganda.

Namono who was speaking during the Inaugural Bancassurance Thought Leaders Forum that was conducted under the theme: “A Reflection of Insurance in Uganda: There is value in partnering with your financial institution/bank for insurance services added that there is also poor client relations between insurers and their clients as they do not explain to them the full details or thoroughly what entails in the policies being offered.

“What we have noted as the Insurance Appeals Tribunal is that Insurance Companies do not explain thoroughly to their customers what entails in the policies offered. Many policy documents from insurers are vague and also there is no trust and confidence in insurance by people,” said Namono at the Forum.

David Mpanga, an advocate, who delivered the day’s keynote address, told banks offering bancassurance services to collaborate and innovate better.

He argued that legislation, regulation and guidelines with in the bancassurance sector should enable the development rather than stifling innovations in the sector.

“Quickly catch up without stifling. Find ways of making Bancassurance competitive through financing. Have competitive policies and discounts, and also build trust and credibility,” said Mpanga.

Mpanga said Bancassurance service providers should be convenient and accessible, simply their processes and documentation, enhance customer service and innovate more as innovations lead to better innovation.

Martha Aheebwa, Chairperson Bancassurance Technical Committee, Uganda Bankers Association said bancassurance in Uganda started with the passing of Financial Institutions (Amendment) Act in 2016, and the passing of the Bancassurance Regulations in 2017. The first supervised financial institution was granted a license in 2017.

“This channel has since grown with 19 supervised financial institutions currently licensed by the Insurance Regulatory Authority (IRA) where Gross Written Premium has grown from Ugx.83.34B in 2020 to Ugx.142.7B in 2022.

“The Ugx.142.7B generated through the bancassurance channel (accounts for 9.9% of Gross Written Premium) out of the total Ugx.1.441Trn Gross Written Premium in 2022,” said Aheebwa.

Human Resource study indicates that bancassurance channel employs 426 people out of a total of 2,848 permanent staff-approximately 15%. These staff account for 44% of the industry with a Certificate of Proficiency, and 14% with a Diploma in Insurance or Equivalent.

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