The Insurance Regulatory Authority hopes to raise at least Shs1.5 billion annually through the recently introduced training levy.
The Insurance Regulatory Authority of Uganda, Mr Ibrahim Kaddunabbi Lubega, told Prosper last week with each insurance player remitting 0.5 per cent of the gross direct premium written, the Shs1.5 billion is achievable going by the 2011 industry performance.
He added that investing in the training and development of human resource is geared towards providing outstanding labour market intelligence which will enable entrepreneurs and the general public to make the best choices for themselves.
The insurance industry’s premium written grew to Shs296.83 billion last year, up from Shs239.98 billion in 2010.
The 0.5 per cent is a training levy provided for in the Insurance Amendment Act 2011 that is imposed on the gross direct premium charged for all policies issued by Insurance companies and is supposed to be remitted to the Insurance Institute of Uganda.
The levy which took effect on October 1 is charged on all new policies issued, renewals and endorsements, for as long as these attract an additional premium.
The resources to be generated under the levy will empower the Insurance Institute of Uganda (IIU) to develop relevant training programmes aimed at increasing workforce skills and improve service and product provision to the clients.
Insurance penetration still low
The growth of the insurance industry in Uganda has remained low compared to its counterparts in the East African region, partly due to the training gap in human resource capacity.
For instance, Uganda’s insurance penetration is 0.6 per cent compared to Kenya’s 3.1 per cent, Rwanda’s 2.3 per cent and Tanzania’s 1 per cent.
The skills training is one of the steps the industry regulator is undertaking to address the talents gap and professionalise the insurance sector.
While addressing a chief executive officers’ breakfast meeting in Kampala last week, Mr Geoffrey Kihuguru, the IIU chairman said: “Because of the limited skills, those who ought to guide or advise the public in purchasing any given insurance policy, answer specific queries or help in filing claim forms, lack satisfactory knowledge in the insurance field.”
Mr Kaddunabbi said boosting skills in the industry will enable Ugandans to take over top management positions in the industry which have been dominated by expatriates due to limited skilled labour force among Ugandans.
He further allayed fears that the 0.5 per cent training levy on all new policies might increase the cost of insurance products saying that it is not a big percentage to worry the insuring public.
If utilised well, Mr Kaddunabbi added, the benefits will go to the insured that will now get more professional services.