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Absa Bank: More Ugandans Buying Insurance Products During COVID-19

Josephine Mutabuza, Absa Bank Uganda’s Head of Bancassurance

Bancassurance is booming and is expected to increase Uganda’s insurance penetrations that remains below 1% as banks increasingly sell insurance products to their customers.

Bancassurance is a simple term coined by combining two words, bank and insurance. Commercial Banks are adopting it because selling insurance products gives them a new and lucrative revenue stream without high new setup costs. Besides, this fee-based income is essentially risk-free since the bank simply plays the role of intermediary. Absa Bank Uganda is one of the leading institutions in offering Bancassurance. Business Focus had an exculsuve interview (Q&A) with Josephine Mutabuza, Absa Bank Uganda’s Head of Bancassurance, about the product and how it’s relevant to Ugandans especially during COVID-19 pandemic times.

Below are the excerpts of the interview;

Q: Many banks are offering Bancassurance. What makes Absa’s product unique? What products and services do you offer under Bancassurance?

A: Several banks do offer Bancassurance, however, what sets Absa Bancassurance apart is the bespoke insurance solutions that are developed with the customers’ needs at the top of mind.

Absa offers both life and non-life insurance services, life insurance products include education plans, endowments, family protection insurance and other investment-linked life insurance products.

We also have an executive motor comprehensive insurance product that takes care of any vehicle owner’s needs.

We provide advisory services to our customers as they make insurance decisions whether it is protecting their wealth or their future and that of their families.

In addition to this, we offer after-sales services like claims management, policy renewals and any policy amendments that may be required throughout our customers’ insurance journey.

Q: Briefly tell us how the product has performed since it was introduced.

A: Ours has been an amazing journey since the inception of Bancassurance in 2018. Our insurance penetration is over 4% of our customer base and our focus is to consistently grow this even further year on year.

Our 2019 Gross Written Premium (GWP) was 150% above the Yr1 GWP, indicating a strong growth since the product’s launch.

Despite the challenging environment in 2020, we have been able to realise continued growth. The product is now a significant contributor to the bank’s revenue with great growth potential.

Q: According to data from Insurance Regulatory Authority (IRA), Absa Bank earned the highest commission from life business with Shs671m from Shs2.8bn in written premiums, having issued 22,407 policies in the first quarter of 2020. What are the factors behind this impressive performance?

A: This growth can be attributed to the strength of our dedicated Bancassurance team with experience in the local market and markets across Africa.

Additionally, our bespoke insurance solutions that are simple, affordable and easily accessible and we owe a lot to a loyal customer base that trusts us enough to continue buying insurance from us.

We have the right insurance partnerships, having initiated partnerships with insurers that are well-capitalised, innovative and put customers’ needs at the forefront of everything they do. Insurers with whom we have easily integrated with to deliver our customer expectations can’t be unersetimated.

We have created awareness on the value of having insurance cover to protect one’s wealth and future as well as using insurance products as a saving and investment mechanism.

Q: What does it take for one to access Bancassurance at Absa?

A: Our products are easily accessible at any of our branches across the country. Simply speak to your relationship manager, branch managers and your customer service executive or a Bancassurance specialist for guidance.

In the near future, our customers will be able to access simple insurance products digitally and through other self service channels.

Q: How has the Bancassurance product been relevant to Absa’s customers during the COVID-19 pandemic situation?

A: All the life insurance policies we offer are extended to cover the COVID-19 pandemic, although pandemics are usually excluded in most insurance policies. Additionally, our customers are entitled to premium waivers of up to 2 months if diagnosed with COVID-19 and hospital cash benefits if they were hospitalized due to COVID-19.

Q: How has the pandemic affected the product uptake and performance?

A: Incidentally, as a result of COVID-19, we realized an increase in the number of people that were willing to buy insurance and more commitment from customers in paying premiums consistently. We also had more customers come in and revive their policies.

Q: What opportunities exist at Absa for the uninsured Ugandans?

A: At Absa, our current accounts have free insurance benefits that make a payout in the event of death, total permanent disability and retrenchment. We also have accounts that payout in the event of hospitalization of an account holder.We understand simplicity, affordability and accessibility and focus on understanding our customers’ needs then providing solutions based on these needs.

Q: In your opinion, what’s the future of insurance in Uganda?

A: The insurance industry is still under-penetrated at below 1% and as such, the growth opportunity is immense. As an industry, we need to create awareness of the benefits of insurance services and the value it provides to individuals and business owners.

 Insurance can be used for protection, for low-risk investment, for risk mitigation and it provides peace of mind to business owners and individuals as they focus on their core responsibilities.

Q: Your last comment…

A: With banks entering into the insurance industry, we should expect to see increased insurance penetration especially in the retail space, products and digital innovations that will result in a better customer experience.

Taddewo William Senyonyi
William is a seasoned business and finance journalist. He is also an agripreneur and a coffee enthusiast.

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