What’s The State Of The Insurance Business In Uganda?

What’s The State Of The Insurance Business In Uganda?

With less than 1 percent of Uganda’s population covered by insurance, the country has one of the lowest insurance penetration rates in sub-Saharan Africa, according to an Observer report in AllAfrica.

That could change.

Tanzania’s Alliance Africa General Insurance has started doing business in Uganda, deepening the competition within the country’s insurance industry.

The insurance penetration rate in Uganda is estimated at 0.8 percent compared to Tanzania’s 1.1 percent, Rwanda’s 2.3 percent, Kenya’s 3.5 percent, and South Africa’s 14.2 percent, the Observer reports.

Uganda has 30 insurance companies, 12 health membership organizations (HMOs), one reinsurance broker, 27 insurance brokerage firms and 18 loss assessors/adjustors.

The country’s insurance regulator has undertaken reforms including tight deadlines for settling claims, increasing minimum capital requirements and separating life and non-life insurance businesses.

Insurance firms in Uganda must now pay claims of up to Shs 10m (about $3400) within 10 working days after receipt of the discharge voucher, down from several months.

K.V.A Krishinan is managing director of Alliance Africa General Insurance. Although insurance sales are low in Uganda, he told reporters that economic growth is driving expansion of insurance there.

“We have a lot of confidence in Uganda’s market. It’s dynamic and there is a lot of potential we seek to tap into, and stand as a key industry player,” he said, according to the Observer.

His company sells insurance services including fire, marine, motor, and engineering for personal and business.

Some insurance industry stakeholders in the region say it’s hard to compete because the government reinstated 18 percent value added tax on insurance services in the 2014-2015 budget — an obstacle to growth, the report said.