What you need to know:
Insurance industry players have lauded the new insurance firm that will attract untapped informal market, Ismail Musa Ladu writes.
The vice chairman of the Insurance Brokers Association of Uganda, Mr Solomon Rubondo, says he does not like to hear these words: low insurance penetration.
Mr Rubondo would rather focus on the opportunity that can be harnessed from the large untapped market instead of grumbling about the little segment covered by the industry.
It looks like one of the industry players has been listening to his cries to do something about increasing insurance uptake which is currently less than 1 per cent.
Recently, Grand Micro-insurance (GMi), the first indigenous micro insurance and saving company in Uganda, has taken the first big leap of faith in a terrain that many, including some of the bigger and most experienced industry players, consider a risky ground.
For the first time, Ugandans in the informal sector and those in the low-income bracket, have an opportunity to secure life, health and funeral insurance cover that suits their lifestyle and falls within their income bracket.
“This is good news that we shall support and protect from being copied by others,” Mr Rubundo said recently in Kampala while unveiling the new micro-insurance products to insurance brokers.
He continued: “This is a unique model. Certainly, it will deepen insurance penetration given its appeal and the large target audience it is meant to attract.”
The new policies provide savings, implying that at the end of the term, your accumulated savings are available for your use, or your named beneficiaries or even trustees.
In other words, you don’t lose out completely once the cover expires as it is the case currently with several insurance products. Upon the expiry of the policy, your savings will be entitled to some interest, no matter how small it is.
Speaking after the presentation of the new micro insurance products to the insurance brokers, the managing director, GMi, Mr Ronald Zake, said following research they conducted, it was evident that these products are needed. But they are lacking because nobody has taken time to offer the huge deprived market the kind of package they can identify with, let alone afford.
He said: “We discovered that life, sickness and death are almost a sequence. Once any of them strikes, there is a problem. To ease these problems, we came up with the insurance policy that embeds the saving component. At the end of it, you have your cover and if you don’t use it ,you have your savings.”
Insurance Regulatory Authority chief executive, Mr Ibrahim Kaddunabbi Lubega, believes that such innovative products, targeting the huge informal sector are the way to go. With the huge number of the population still on the fringes, this kind of product will get them thinking twice.