Funeral cover is now driving insurance growth, says UIA

As many more people secure their funeral and related arrangements, industry players  have finally found a rallying point in death insurance products and related covers. Whereas it arouses emotion, it has also become a low hanging fruit in terms of deepening insurance penetration. In an interview, the chief executive officer of Uganda Insurers Association, Mr Jonan Kisakye explained to Prosper Magazine’s Ismail Musa Ladu, why this is the case. Excerpts  … 

Why was Uganda Insurers Association established?
We play a very important role as an umbrella body. We are the voice of the insurance sector players also known as the risk carriers. Without our function as an umbrella body, I can only imagine the disarray the insurance subsector will be dealing with right now. 

We represent the industry players in engagements with government, especially on issues around industry regulation, matters of taxes and any other aspects of policy that may have implications on the operation of the insurance industry.

For years, the uptake of insurance has not really been growing. In fact, it has never moved beyond 1 per cent penetration. As an industry, are you really sure you are doing enough? 
Look, we are beginning to see some rewards emanating from the concerted efforts of all the industry players in the sector. For example, if you look at the sector performance figures for last year, you will notice that the life insurance segment is growing. This is good news. We saw a growth rate of about 31 percent and this represented the gross written premium of Shs506 billion.

This contributed about 37 percent of the total industry premiums, and this is an improvement from 34 per cent contribution recorded in the previous year (2021).  In other words, life insurance is slowly picking up although at the expense of non-life insurance. This speaks to the fact that the public is now beginning to appreciate life insurance cover and related products. 

So what does the growth in life insurance segment communicate in terms of growing the sector?  
It means industry growth. About five of our licensed segment players grew by 50 percent in a span of one year. This is remarkable and on the claim side, about Shs234 billion out of the Sh506 billion was processed by industry players in the life insurance segment. So the life segment is growing.

There is also now appreciation in terms of the uptake of the life insurance products. That is why it is important for us to keep innovating different products while ensuring the public is aware about the options they have, explaining our recent campaign in which we are stressing the need for life insurance because it is important and that the insurance sector players pay genuine claims. 

So what we are doing now with our new campaign is to present different options under life insurance without diluting the flagship which rotates around protecting families from the financial worries they could face if you (the breadwinner) are no more.

What explains the growing uptake in life insurance?
It speaks to the heart and mind. Although emotional, it also a reality. The products under life segment speak to challenges that people go through every single day. This became evident at the peak of Covid-19 outbreak. 
The pandemic, almost overnight made the appreciation of life insurance evident.

The main purpose of a life insurance plan is to provide some sort of cushion to the family in the event that the owner of that insurance product passes on whom we technically refer to as the insured. It will cover outstanding liabilities accruing from your funeral which as you might know is one of the most difficult moments.

And to explain further why this trend could last forever, incase the insured doesn’t pass on within the period under insurance, and your policy hits maturity, you stand to be paid a percentage that comes with some bonuses. 
Did you also know that you can save with insurance? If you pass on before the maturity period, all the savings you have accumulated within that period will be surrendered to your dependents.

You seem to be involved in so many things, so who looks after my interest as a client?
The insurance sector is highly regulated with parameters in place to safeguard whatever contract you do have with an insurance player. 

We have an insurance regulator—Insurance Regulatory Authority of Uganda (IRA), who licenses these players on an annual basis. The process of licensing a company is thoroughly done. This is normally done with the interest of the client in mind that you will be compensated in case of a loss. 

Going forward, what is the plan?
Beware of fraudsters and only deal with licensed members of UIA. 

We are also looking at expanding bancassurance, an arrangement between a bank and an insurance company allowing the insurance company to sell its products to the bank’s client base.  This partnership we believe can be profitable for both parties as proven so far. Soon, we shall engage Uganda Bankers Association, with a view to engage over 20,000 agent bankers in the country. 

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