Uganda’s Insurance Regulatory Authority (IRA) is reportedly set to devise guidelines for the introduction of new insurance products as the Ugandan industry seeks to deepen insurance penetration.
Protazia Sande, IRA’s assistant director, market research and development, was reported by East African Business Week as saying the move would allow players to come up with adding innovative products that are responsive to the market needs, but which are also backed by regulations to protect both the insurers and the insured.
Sande reportedly said the insurance industry in Uganda has been growing at an average 20% annually, but mainly in the formal sector. He was quoted as saying: “We are working with the industry with an aim of coming up with special regulatory framework to allow for new products which can be pushed to the people at the cost that makes business sense”.
Sande reportedly attributed lack knowledge of insurance products, and the benefits that taking up an insurance policy offers, for the Uganda’s low insurance penetration rate.
This rate was 0.64% in 2014 and low compared to other African countries such as Kenya (3.2%), Tanzania (2.3%) and Rwanda (1%), according to a report available at Timetric’s Insurance Intelligence Center (IIC) The Insurance Industry in Uganda, Key Trends and Opportunities to 2019.
In spite of the low rate, Sande was cited as saying the rapid growth of microfinance and savings and credit cooperatives (SACCOs) was evidence that the informal sector was financially viable.
Timetric’s IIC report says Uganda’s life insurance segment’s gross written premium increased from UGX23.6bn in 2010 ($7m) to UGX61.5bn in 2014.
According to the report, the rising number of savings and protection products supplemented the segment’s growth. The country’s large rural population and their dependence on agriculture is expected to drive demand for products for the low-income population.
The IIC report forecasts that Uganda’s life segment is expected to more than double and increase from UGX61.5bn in 2014 to UGX145.2bn in 2019.
To read the full IIC report in full on Uganda’s insurance industry, or access the wealth of data and insights held by the IIC, visit www.insurance-ic.com