The Uganda Insurers Association (UIA) has partnered with the Insurance Regulatory Authority of Uganda (IRA) and the Africa Reinsurance Foundation to launch Insurance Literacy and Market Development Agenda (ILMDA).
The initiative is a comprehensive five-year plan aimed at simplifying the knowledge of insurance and risk management for easy understanding and appreciation of the benefits of insurance to the public for informed decision-making.
Speaking during the launch, the UIA CEO, Jonan Kisakye underscored the rationale behind the initiative.
“There are a lot of misconceptions about insurance and the expectation from the public is that if they buy an insurance policy, it is actually equated to saving or a situation where a commercial bank receives deposits. However, insurance works totally different. It is based on a promise that in the event of an occurrence that leads to a claim, the policyholder will be compensated. The public needs to be explained how insurance works and this is what the five-year agenda intends to do,” Kisakye said.
He explained that the initiative aims to ensure members of the public are literate about matters of insurance and what insurance can be able to do for them.
“One you don’t understand that, it becomes a problem and people will not appreciate what insurance is and how it can be able to support them or resonate with circumstances they are going through. This is the heart of the agenda to allow the public to dialogue with insurance sector players to ask the hard questions.”
“The intention of the agenda is to demystify insurance so that at the point members of the public purchase insurance policies, they have been empowered with the necessary information to make the right decisions.”
He cited an example of a client who had been insuring their vehicle for four years without a claim and wanted to be paid back the total amount of the premium for the four years.
“What this client didn’t understand is that insurance works as a pool. If I put these funds into a pool, I am literally saying that on my own, I can’t stand and compensate myself as this client wanted but together with others we create a pool from which resources can be drawn to compensate the few that may claim.”
The CEO of the Insurance Regulatory Authority, Al Hajji Ibrahim Lubega Kaddunabbi said whereas insurance is a key pillar in any country’s financial system as it cushions against unforeseen shocks and enables individuals, families and businesses to thrive confidently, many don’t appreciate it fully.
“ One of the most significant barriers continues to be low insurance literacy. Many Ugandans either do not understand how insurance works or mistrust its mechanisms. Myths, misconceptions, and a lack of clear information have kept millions of our citizens outside the safety net that insurance can provide. This is why insurance literacy is not just a strategy. It is a necessity,”Kaddunabbi said.
He said through the Insurance Literacy and Market Development Agenda, stakeholders aim to bridge the knowledge gap, build trust, and empower Ugandans with the information they need to make informed decisions about their financial futures.
He said the initiative will also promote consumer education and promotion, encourage innovation and product relevance, strengthen partnerships among regulators, insurers and development actors but also expand access to insurance in undeserved regions, including rural and informal sectors.
“This agenda is not a stand-alone document. It is an integrated part of our broader vision as the Insurance Regulatory Authority of Uganda to foster a vibrant, trusted and inclusive insurance sector that contributes meaningfully to Uganda’s socio-economic transformation.”
The Director of Economic Affairs at the Ministry of Finance, Moses Kaggwa hailed the insurance stakeholders for the initiative that he said will play a crucial role in deepening insurance in the country as government seeks to grow the economy, tenfold.
“We are at a time in Uganda where we are taking off from a lower middle income to an upper middle-income status. This leap is to be anchored on four sectors including agro-industrialization, tourism development, mineral development, and Science & Technology. This means insurance will play a crucial role in this leap. We can’t have this without insurance. We must ensure we have insurance for agriculture, tourism, mineral development and all the other sectors,” Kaggwa said.
“This means insurance plays a very crucial role in the economic development of any country. It is the one to provide for safety for businesses by cushioning them from risks . By promoting financial literacy and insurance awareness , we can empower our citizens to make informed decisions.”
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Source: NilePost (click here to view)
