Insurance has been called the “ugly duckling” of the financial services industry. Nobody seems to understand what it is about. We seem to have sat in one meeting and agreed that insurers are “thieves”.
I have come across many people who think third party liability for motorised vehicles is a tax, or some kind of levy.
Insurance has not been understood as the wealth protection mechanism it is. Think about someone who saved up to start a salon or boutique, the source of their livelihood.
If there was a burglary or a fire or some accident, not only is their livelihood compromised, but they need to find funds to replace what has been lost, in order to get their business going again. God forbid if they were indebted. Sliding into the next lower income bracket doesn’t seem so far-fetched now.
Many of us parents are trying to save up money for our children’s future education; how long do we need to save up sufficient funds? What would happen if we weren’t around long enough to save up what was required?
What legacy are you building? How have you secured this legacy?
Most of us understand how village burial societies (Twezike), nigina groups, investment clubs, community based health insurance work.
They are all contingency funds, established by the members to meet specified needs; we are members of these organised groups because we want to protect what we have built-our legacy.
Insurance, like these social groups, simply provides a means to protect your current wealth-your legacy,the only difference being that the members contributing to an insurer’s fund may not know one another personally.
The poor perception of insurance in Uganda has been largely due to a failure to communicate this benefit. A successful Bancassurance model is structured to address this. Bancassurance is the distribution of insurance through the bank’s channels. The Financial Institutions Act was in 2016 amended to allow bancassurance, and the attendant Regulations were passed in July 2017.
The penetration of insurance in Uganda is one of the lowest in the region, standing at less than 1%.
In markets where bancassurance has been successful (in Asia for example), substantial growth has been experienced largely due to the better matching of products to needs.
In January 2018, dfcu Bank was licensed to conduct business as a bancassurance agent.
Bancassurance means that our customer now has access to insurance through dfcu Insurance.
Where insurance still comes across as technical, difficult to access, and where many clients don’t understand the claims process, dfcu Insurance is looking to provide solutions by availing products that meet the particular needs of our customers, by easing access as well as simplifying the claims process. Our customers can look to us for all their insurance queries and solutions, and we are keen to provide solutions that work. For example:
- With dfcu Hospital Cash, our Dembe account customer is entitled to a cash benefit for everyday that they are hospitalised -this benefit replaces the customer’s income for the days they have been unable to work while they were hospitalised.
- Our salaried customers and professionals are entitled to 3 months’ salary following redundancy, as well as a benefit payable to their family in the event of their death.
- Investment clubs, SACCOs and organised groups now have a solution to take care of the funeral and medical needs of members, without picking from the funds of the club or SACCO.
- We have a solution for our customers who need to secure their children’s (or their own) future.
- For our corporate customers whose needs are dynamic, we have solutions that meet each one’s specific needs.
At dfcu Insurance we’ll give our customers a holistic solution, centred on easy access, great service, convenience, and efficiency. Claims processes have been greatly simplified and in most cases will not necessitate the customer physically coming to the branch.
We’re using our bancassurance licence to provide a more holistic financial service to our customers, based on their needs. Rather than simply sell off-the-shelf products, we’re providing products that complement our current offering, products that provide a real benefit for our customers.
There’s a better way to secure your legacy with dfcu Insurance, whether it be about protectingyour business, assets, securing the education for the children or securing your quality of life after employment.
For many of us, when we think of insurance, our minds are preoccupied with the cost of insurance; I ask, what is the cost of the loss?
Principal Officer, Bancassurance