Insurance firms look to innovation to increase access
Posted Saturday, April 5 2014 at 01:00
Public is yet to appreciate the relevance of the industry.
As the low level of insurance penetration in the country continues to be a concern, industry players insist there is need to increase awareness and offer innovative products to make it attractive to the public to voluntarily buy insurance.
Speaking to media on the sidelines of Uganda Association of Insurance Brokers Annual General Meeting and awards gala in Kampala last week, the association chairman, Mr Maurice Amogola, said the insurance industry is struggling to attain significant penetration levels partly because the public is yet to appreciate the relevance of brokers in the industry.
Insurance penetration, which shows the sector’s percentage contribution to the country’s Gross Domestic Product, stands at just 0.65 per cent in Uganda, compared to Rwanda’s 2.3 per cent, Kenya’s 2.76 per cent and Tanzania’s 2.2 per cent.
According to Mr Amogola, despite the essential roles insurance brokers play in driving the industry, the biggest section of the insured public deal directly with insurance companies.
He noted that in Uganda, only 40 per cent of insurance policies are bought through brokers compared to the 75 per cent in Kenya and 80 per cent in Tanzania.
Although brokerage firms help insurance companies in collection and remittance of premiums from policyholders, some insurance companies prefer to deal directly with customers to ensure prompt premium collection.
Late last year, the Insurance Regulatory Authority warned that it would not renew any brokerage firm’s license that fails to remit premiums to insurance firms in time.