Kampala. Big insurance customers are finding challenges with buying insurance because of the new cash and carry regulation.
Information from the insurance agents association indicates that big customers are failing to buy insurance on cash.
“It is not easy because most of the big clients cannot afford to pay,” Mr Ivan Turyasiima, the chairman of Insurance Agents Association, said explaining that some companies release money on a quarterly basis.
Cash and carry is a new regulation, inducted at the beginning of the year mandating insurers to sell insurance to the public on a cash only basis.
This essentially means the public has to pay their premiums in cash up front.
Mr Turyasiima also said that whereas companies are willing to buy insurance, they are challenged by their internal processes such as quarterly release of money.
While acknowledging the benefits of the policy such as ensuring cash flow in the insurance sector and ease in compensation processes, he said he has lost about 10 per cent of his customers.
With insurance penetration at 0.8 per cent, he advised that the regulation ought to restructure the payment to at least two months.
The regulation was, however, passed with the consent of insurance companies after an engagement organised by the Insurance Regulatory Authority (IRA) last year.
Mr Paul Kavuma, the chief executive officer of Uganda Insurers Association, said that he is certain with the right capital and risk appetite, insurance companies will prosper in spite of the new regulatory system.
The discussion was on the sidelines of the annual Life Agent Year Awards organised by UIA where Ms Kisakye Ritah from Jubilee Insurance was crowned Life agent of the year.
About case and carry
The new regulation seeks to, among others, ensure proper cash flow in the insurance sector. It mandates insurance companies to sell insurance to the public on a cash only basis. However, this has proved difficult for large consumers.