What you need to know:
- Coverage. Currently, insurance penetration in Uganda is at less than 1 per cent which the regulator aims at growing to 3 per cent by 2025.
Kampala. Following the amendment of the financial institutions Act, the Insurance Regulatory Authority (IRA) has issued the first bancassurance licence to Stanbic Bank.
The licence means that Stanbic can now freely offer insurance policies to its customers and the public.
Speaking at a media briefing at IRA offices in Kampala last week, IRA chief executive officer Ibrahim Kadunabbi Lubega said the partnership between the two sectors is a move geared towards increasing insurance penetration in Uganda, awareness and creation of policies that cater to the different consumers.
“Bancassurance in its simplest form is the distribution of insurance products through a bank’s branch network. It allows insurers to rapidly widen their reach by tapping into an established banking network and client base. It is through such partnerships that the insurance industry can grow and increase its penetration in Uganda,” he said.
The authority believes that introducing banks as partners will instill a high level of confidence and trust in them by the public subsequently attracting consumers to purchase insurance products from their distribution outlets.
He revealed that Stanbic Bank provided all requirements that were required to allow them administer professional aid to customers that require insurance services and products.
Stanbic Bank executive director Patrick Mweheire affirmed that the bank is well placed to avail the public with insurance products which will eventually improve penetration of the industry.
“Stanbic bank already offers insurance products in South Africa such as oil and other products which boost our ability to improve penetration in the industry,” he explained.
Acknowledging the challenge of penetration, Uganda Insurers Association public relations officer Faith Ekudu said the partnership was long overdue but nonetheless timely in order to boost insurance through awareness, designing policies for low income earning consumers and reach through vast bank branches country wide.