Prof. Augustus Nuwagaba, the Deputy Governor of the Bank of Uganda,
Uganda’s Insurance Industry has been advised to focus on cheap and convenient means of payment for services to boost penetration.
Prof. Augustus Nuwagaba, the Deputy Governor of the Bank of Uganda, says all industries today are innovating in payments, primarily through digitisation, because the markets increasingly prefer convenience.
Speaking at a CEO Conference organised by the Insurance Regulatory Authority (IRA), Nuwagaba gave the example of Kenya, where vehicle owners are allowed to pay in up to 12 installments for comprehensive insurance, unlike in Uganda, where a lump sum is required.
Nuwagaba was giving the highlights of the survey done by his firm, Reev Consult, on public perception and the limitations to insurance penetration in Uganda.
He said some countries have realised higher insurance penetration rates than Uganda 0.8 percent, because of the confidence and trust the insurance has built through being “customer centric” in their operations.
Insurance penetration refers to the total volume of underwritten premiums by the industry compared to the gross domestic product.
Other common reasons for this performance noted include the lack of public understanding of the industry by the public, the frustrations encountered when trying to claim compensation, among others.
But Nuwagaba said the sector had not yet done enough in innovative products and processes to grow the premiums.
He gave the example of the proposed National Health Insurance Scheme that has so far failed to materialise in Uganda, yet other countries in the region have implemented it and are contributing greatly to insurance premiums and penetration.
He, however, also blamed the government for not embracing the insurance of government assets like vehicles and buildings, which, he says, has denied the industry significant premiums.
Comparing insurance and other sectors in terms of contribution to the economy, Nuwagaba wondered how mainly casual workers in the Middle East could perform better than insurance.
In response to concerns of low penetration, Ibrahim Kaddunabbi Lubega, the IRA Chief Executive Officer, said the industry was on the right track because of the growing premiums.
In terms of underwritten premiums, the industry is growing at about 11 percent per year and last year it hit 1.7 Trillion Shillings this year.
Haj Lubega said they are continuing to engage the government on insuring public assets, saying studies had been done and the results were promising, while the National Health Insurance Scheme Bill is at the cabinet level. He expressed hope that Dr Nuwagaba’s voice would add to the efforts of seeing the law through, using his new position in the financial sector.
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