A fireman puts out a fire in Kampala recently. Even as insurable risks increase Uganda’s insurance sector continues to register slow growth.
Ugandan insurers must improve service delivery if they are to compete in the wider East African market that can no longer be closed to competition.
Mr Rashid Kibowa, the commissioner economic affairs, at the ministry for East African Affairs said although Uganda had managed to shield its insurance sector from liberalisation during the negotiations of the Common Market it was no longer possible to close out competition from players in the EAC ahead of the Monetary Union and the Political Federation.
Mr Kibowa who was speaking at an insurers’ meeting in Kampala yesterday also urged players to identify competitive advantages in the sector in order to out-compete players from other countries in the region.
Being out-competed
“I can assure you that if you don’t identify your line of attack to beat off players from other partner states, Ugandan insurers will be out-competed,” he said.
Mr Ibrahim Kaddunabbi Lubega, the Insurance Regulatory Authority chief executive officer,said even if Uganda had guarded its insurance sector from liberalisation, it was high time the country thought of liberalising the sector.
He said this would help Uganda to grow both its penetration levels and premiums due to the presence of a wider market.
Standing at about 0.7 per cent, Uganda has the lowest penetration levels in East Africa compared to Kenya’s 2.7 per cent, Tanzania and Rwanda’s 1 per cent respectively.
The sector has also been undertaking a number of initiatives including raising paid-up capital and setting tight deadlines for claims settlement in order to strengthen the sector’s financial base.
For instance, effective October 2014, insurers will be required to have a minimum paid-up capital of Shs4 billion for non-life insurance and Shs3 billion for life insurance companies, up from Shs1 million for both policies.
More Beneficial: Standing to benefit. According to experts Uganda stands to benefit from a wider East African market if it sets clear growth priorities.
By Faridah Kulabako, Daily Monitor
