What you need to know:
- Beyond willingness to pay and cost of the cover, the ability of an insurer to pay claims is a big determinant for a customer to take out an insurance policy
Unwillingness to pay claims and price of premiums are some of the key factors upsetting uptake of insurance, according to Kenya Reinsurance Corporation (Kenya Re).
Speaking at the opening of the Kenya Re offices in Kampala, Dr Hillary Wachinga the Group’s managing director, said beyond willingness to pay and cost of the cover, the ability of an insurer to pay claims is a big determinant for a customer to take out an insurance policy.
“Before we set up an office here, we analysed the market to determine what clients want. We noted that they consider price, ability and willingness to pay claims,” he said, noting that other determinants include, underwriting expertise, speed of service delivery, flexibility, innovation and credit rating, among others.
Insurance uptake remains below 1 percent, which denotes low penetration among Uganda but also tells of the immense potential that continues to be untapped.
Kenya Re has experienced substantial growth since 2020, increasing gross reinsurance premiums from Shs6b in 2020 to Shs13.9b in 2021.
The company has further registered growth in reinsurance premiums, which grew to Shs16.3b in 2022 while profit after tax and total assets grew to Shs2.33b and Shs36b, respectively.
Dr Wachinga said by reinforcing “our local presence, our goal is to foster self-sufficiency and contribute to economic growth by retaining value within the country”, noting that Uganda’s dynamic insurance sector was an attractive suitor for Kenya Re, which has thrived since its entry into Uganda.
Ms Catherine Kimura, the Kenya Re chairperson, said that unemployment had contributed to the low uptake of insurance in East Africa, which is worsened by unwillingness to compensate policyholders when losses occur.