What you need to know:
Factor. Players say the insurance industry is sound and those pulling out are doing so for strategic reasons.
“After careful consideration and in depth review AIG will stop offering insurance products in the general market in Uganda,” reads a statement issued by AIG Insurance to the public on Tuesday.
AIG said it was creating a simplified organisation that positions them to achieve their global strategy based on capabilities and market opportunities. In that regard, the insurance firm will embark on a phased withdrawal from the Uganda market.
“Our existing clients will continue to receive full administration and claims support for the remaining period of their policies. We will remind our clients of this change at the appropriate time prior to expiration of their policy,” the statement further reads.
In that regard, an investigation conducted by this newspaper reveals that some employees have already been given letters notifying them of termination of their contracts which will expire by December 2016. Some employees, speaking on condition of anonymity, said the insurance company, in the letter, said they would receive their severance pay and their employment would be terminated by end of the year.
Mr Ibrahim Kadunabbi Lubega, the chief executive officer Insurance Regulatory Authority, said he is aware that AIG is exiting the country as a result of their desire to reduce their presence in various economies.
“To us as the Insurance Regulatory Authority (IRA), we wouldn’t have wished it to happen but we are comforted that even when it happens, the businesses will still remain with us because the businesses are being passed on to other companies. We do not have a direct loss as Uganda because it is just one investor who is pulling out but other people are increasing their investment and their capacity to underwrite the risk is available,” Mr Lubega said.
Data from IRA indicates that gross claims for both life and non-life insurance (including health membership organisations) rose from Shs184.3b in 2014 to Shs214b in 2015, representing a growth of 16.08 per cent.
This excludes the outstanding claims and those that will emerge from the long-term policies.
According to the 2016 IRA preliminary report, the insurance industry gross premium underwritten slightly increased from Shs502.6b in 2014 to Shs611b in 2015, representing a compound growth of 21.58 per cent.
In Uganda, non-life business especially motor third party insurance, dominated the insurance sector in terms of underwritten premiums, accounting for 75.99 per cent of total premiums.
AON Not going
The rumours. AON insurance company has refuted rumours that they are also exiting the Ugandan market.
Speaking to Daily Monitor yesterday, Mr Maurice Amogola, the managing director AON, said they are not pulling out of the market but people should always wait for AON to pronounce itself on whatever plans the firm has for the market. He, however, said the industry is sound and those pulling out are doing so for only strategic reasons.
Mr Ibrahim Kadunabbi Lubega, the chief executive officer of the Insurance Regulatory Authority, said he does not know about any plans of AON pulling out of the Ugandan.