Insurance penetration in Uganda still low - report
What you need to know:
- Mr Christopher Musoke, the managing director FSD Uganda, in an earlier interaction with this newspaper, said insurance has not been very popular among Ugandans due to lack of trust.
Kampala. Over the last decade, insurance markets in sub-Saharan Africa (SSA) have grown from 4.5 million risks covered to more than 60 million risks covered today.
However, according to a March 2017 report titled ‘Funding the Frontier: The Link Between Inclusive Insurance Market, Growth and Poverty Reduction in Africa’ findings show that insurance penetration in SSA remains amongst the lowest in the world.
The report was published yesterday by Financial Sector Deepening Africa (FSD Africa) in partnership with the Centre for Financial Regulation & Inclusion (Cenfri).
It shows life penetration at 0.3 per cent and non-life at 0.5 per cent, limiting its intermediation potential and contribution to inclusive economic growth and poverty reduction.
Uganda is among the 15 countries the report takes stock of the state of insurance markets in the region. The other countries are Mauritius, South Africa, Botswana, Ghana, Kenya, Zimbabwe, Nigeria, Zambia, Senegal, Tanzania, Rwanda, Mozambique, Angola, and Ethiopia.
Commenting on the report, Mr Doubell Chamberlain, the managing director of Cenfri, said: “Insurance contributes to growth and poverty reduction in many ways. Over the last decade, the focus in development circles has been on how insurance, or micro insurance, can support resilience, and encourage productive risk taking behavior, amongst low-income individuals.”
Efforts are being done to increase insurance penetration by developing products for the poor. FSD Uganda is spearheading this development by working and partnering with the stakeholders in the industry.
Lack of trust
Mr Christopher Musoke, the managing director FSD Uganda, in an earlier interaction with this newspaper, said insurance has not been very popular among Ugandans due to lack of trust.
“We believe that appropriate insurance products for low income people like health, life and agriculture needs would help them to overcome the economic shocks,” he said.
He added that insurance is a great risk-mitigating service that enables people to overcome shocks to their incomes in terms of health when they fall sick, in terms of death, or loss of merchandise.
