Insurance brokerage attracts more investors

 

 Uganda has a total of 26 insurance brokerage firms and one re-insurance broker, with Gras Savoye Uganda Insurance Brokers, a French firm being the latest entrant with high optimism that given the huge potential in the local insurance market, the industry performance will be better and supportive of the undertaken investments.

 

 Gras Savoye seeks to strengthen footprint in Uganda’s insurance industry at a time when more insurance policy buyers deal directly with insurance companies, missing out on the professional counsel offered by broking firms.

 

 The insurance policies bought through brokers in the last two years declined from 40% to the current 35%, compared to the 75% in Kenya and 80% in Tanzania. 

 

The industry collected total gross premium (sales from policies) amounting to sh456.86b against sh351.23b written in the year 2012. 

 

 In the face of all such challenges, the Insurance Regulatory Authority (IRA) Chief Executive Officer, Alhaj Kaddunabbi  Ibrahim Lubega assured players that it’s not too late to make the industry better.

 

“The industry is still attractive and promising; the coming of multinationals like Gras Savoye is enough to explain that insurance broking has unexploited potential, we only need to work harder to better performance and win confidence in more prospective players,” he said while officiating at the official Gras Savoye launch  at Protea Hotel on Thursday. 

 

Lubega told journalists that the decline in the policy sales through brokers is partly due to fast increasing number of licensed insurance agents (personal intermediaries) competing with brokers. 

They are now standing at 900 and IRA is currently assessing over 300 more applications of individuals seeking to serve as agents, most of them work on micro-insurance.

 

 “Brokers must upscale their game through provision of better services that can make the public have confidence that there is more value buying policies through brokers than going to the insurance companies directly,” he advised.

 

 Speaking to the media before the launch, the Company’s Deputy Chairman East Africa, Johnny Evans noted that his company will add momentum to the industry performance, adding that, like any other business, insurance broking needs to be popularized in the public through comprehensive awareness campaigns coupled with a reasonable degree of integrity in service delivery.

 

 "We are leveraging our performance on our global presence, here we come with world class competence to handle even the most complex business insurance tasks including provision of services in the area of oil and gas business,” he said.

 

 Gras Savoye covers 130 countries offering a range of insurance products and services like property and casualty, employee benefits, motor vehicle insurance among others, thanks to a partnership with Willis Insurance Brokers, a global group with reported net income of $246 million as of March this year, according to the company manager Uganda office Ronald Musoke.

He also noted that lack of public awareness about insurance brokerage industry roles remains among the leading forces that taking the industry back.   

 

 

 Insurance brokers serve as intermediaries between insurance companies and their clients, offer consultancy services to insurance buyers by providing counsel in terms of which insurance policies to go for, at what cost and from which companies.

 

Brokers also help insurance companies in collection and remittance of premiums from the policyholders coupled with helping clients to secure appropriate and claims settlement from the insurers in a timely manner.

 

 

Information with IRA indicates the industry gross premium grew up to 30.08% in the year 2013 compared to 18.48% in 2012, a change accessioned by the  increase in private sector borrowing which led to a reduction in interest rates and increase in insurable loans.

 

Non-life insurance business registered a growth from sh312.95b to sh351.27b, Life business registered sh55.40b against sh38.28b. 

 

While submissions from five licensed Health Membership Organizations totaled to sh50.19b, 

 

The growth has been further attributed to the gradual shift in public perception about the value of insurance, rise in increased public awareness activities; enhanced complaints redress mechanisms, product innovations and continued broadening and deepening of distribution channels.