- October 4, 2018
- Posted by: Uganda Insurers Association
- Category: Featured, News
The government recently made an announcement on the rationalisation of Agencies, Commissions and Authorities causing a wide spread debate on the implications of this on the affected institutions, employment opportunities- or lack thereof- as well as on overall service delivery. As the representative for all licensed insurance and reinsurance companies in Uganda, the Uganda Insurers Association (UIA) unanimously recognises and indeed supports government’s efforts to streamline institutions and Agencies to enhance operational efficiency; we do however note that whereas the intention is noble, it will also undo all the progress made to ensure the systematic growth of the insurance industry.
From a best practices stand point, Insurance supervision is governed on the basis of the Insurance Core Principles (ICPs) and ICP 2 particularly provides for the independence of a supervisor to be operationally independent, accountable and transparent. It is in recognition of this and other global practices that even the current Insurance Act 2017 was amended. Compliance with the international best practices of regulation has made investment in insurance in Uganda very attractive even to very large international insurance groups and the proposed reform may be impact on our global competitiveness and subsequently on our Shareholders’ appetite in the local insurance industry.
“Fortunately for Uganda, the government of Uganda was well ahead of Insurance Act 2017 and made the provision for the establishment of the Insurance Regulatory of Uganda as early as 1996 to specifically nurture the growth of this industry. As a result of that move, as well as the different initiatives taken on by the industry, for instance, the total premium written has increased from Ugx 296Bn in 2011 to Ugx 728 Bn in 2017 signifying a 13 digit growth, “notes Mr. Allan Mafabi, Chairman, UIA while discussing this development.
“One of the key reasons being fronted for the proposed reforms is that the many agencies have exerted a lot of pressure on the Government budget. This does not apply to IRA which delivers its mandate through an established strategic partnership with the private sector and in fact is 100% funded by the industry players through annual contribution(s), “adds Mr. David Kuria, Vice Chairman, UIA,” The independence of this Authority has allowed for a mode of supervision that has fewer ambiguities, less bureaucracies and is very supportive to the private sector business. Moving the industry to a Regulator whose key mandate does not explicitly relate to insurance even if that Regulator is the Bank of Uganda- whose key mandate is monetary policy- will stagnate if not retard our progress.”
Today, the IRA oversees the supervision of 29 Insurance Companies, 37 Brokers, 14 Bancassurance Agents, 28 Loss Assessors/Adjustors, 5 Health Membership Organisations, 1893 Agents and the National Reinsurance Company.
“Uganda presents an over 95% market growth opportunity for insurance penetration and it is our expectation that as we implement different initiatives in partnership with our members, the different players and stakeholders, we should see penetration rise to 3% by 2025. It is imperative that we do this in an environment that is sound and secure as has been ably demonstrated by the IRA,” concludes Mr. Paul Kavuma, Chief Executive Officer, UIA.