When Life Insurance first began in Rome in 100 BC the premise was simple: if someone died, in this case in the Roman army, how could they pool resources to give that person a decent send off. This consequently led to the establishment of burial societies which took care of this particular problem.
With the passing of time, however and particularly in the 1500’s, people started taking out policies on each other which basically provided for a financial pay out if the person on whose life the policy was placed passed on. This evolved to where people started taking out policies on the royal family and politicians with the hope that they would gain from their deaths which introduced an element of gambling which is against the basic principles of insurance.
The result was that parameters were put in place to eliminate elements of gambling and streamline the provision of these services to members of the public. You must, for example, have a legally recognizable relationship with the person on whom you are taking out a policy on and a financial loss must be suffered as a result of the death of that individual.
Life insurance further developed to the point that whereas it was initially thought that you could only benefit when a person died, today, for example, you have investment options which you can benefit from while you are a live and you can now include a life element on your bank loan which, in line with your policy terms, will pay off the loan.
So what does Life Insurance look like in Uganda?
There is now a blend between traditional and unconventional life insurance products where by now products are now developed around people’s day to day milestones, events and behavioral patterns. An example of this would be the education policies which ensure that parents are assured of their children’s future education through because of the savings they would have made towards this over time.
There are also products specifically targeting lower income earners such boda boda riders and bus drivers which cover them for accidents and in the event of death, provide for last funeral expenses. These products can also be extended to include an element of medical insurance.
Technology is also being leveraged on to ensure convenience, access to and improved distribution of insurance services across the board. Consumers can now purchase insurance off their mobile phones and when they claim, receive payments directly through mobile money.
In 2016, UGX 132.5BN was written in Life in premium up from UGX99.8 BN in 2015 and on average life Insurance annually grows at 32% which is about double the growth that we see in general insurance. This speaks to the appreciation and uptake of Life Insurance by individuals over time and a better appreciation of the benefit of insurance.
Where we see life assurance going
Over all, we expect that life insurance will continue to grow especially given the opportunities in micro insurance and banc-assurance which would cover larger populations, as well as the liberalization of the pensions sector which is a space the insurance companies can now operate in.
We also envision more development of life insurance embedded products that are versatile in nature that meet multiple client needs. Liberty Life which is celebrating 10 years of operations is one of the companies which been at the fore front of such innovations and has products that combine both life and last expense benefits especially for lower income earners.