In a bid to boost the low insurance penetration in the country, the Insurance Regulatory Authority (IRA) has embarked on development of regulatory guidelines for insurance companies to provide affordable products for the informal sector such as shops and metal workers or Juakali.
The Assistant Director Research and Development at Insurance Regulatory Authority, Sande Protazio says there is need for guidelines for the insurance companies to plan and serve the majority of Ugandans who are uninsured especially in the informal sector.
Protazio says that currently the insurance penetration in East Africa stands at a mere 0.85 % of the GDP but efforts are underway to increase awareness and appreciation of insurance services.
He explains that because the insurance sector growth rate has been standing at 20% for the last 10 years, the Authority has devised means of working with the banks to reach out to their customers in order to interest them with business insurance.
The proposed plans for low income earners come amid fears and scepticism that investing in insurance is a waste of money because either insurance companies do not pay claims or that services offered are too expensive compared to open market prices.
But this attitude, widely shared, has been dispelled as a misconception by ICEA Group Executive Officer John Karionji.
While launching a week long campaign aimed at increasing public awareness and address customer insurance needs, Karionji said his company is always ready to settle genuine and well documented claims dispelling the myth that Insurers never pay claims.
Specifically on Life Assurance, Protazio said that the growth rate of this particular product is better than the Non-life insurance. Citing 2015 figures, Protazio said that the growth rate for life insurance stands at 36% compared to 17% for non-life ansurance.
Drawing the example of South African’s Economy that has more life insurance clients, Protazio stressed growth of life insurance cover as good for the Ugandan economy.
The Chief Executive Officer ICEA Life Assurance Jackson Muli said that the market is yet to fully embrace life insurance adding that most people only take insurance to comply with the law yet there is no law that makes any of the life assurance policies a mandatory requirement.
Muli stresses that players need to differentiate and thoroughly explain their product offerings to their consumers in order to drive uptake of insurance services across the board.