AIG goes for low income earners

Mar 26, 2006

THE American Insurance Group (AIG) Uganda has penetrated the low end market by introducing micro-insurance products in group personal accident (GPA).

By Charles Bwogi

THE American Insurance Group (AIG) Uganda has penetrated the low end market by introducing micro-insurance products in group personal accident (GPA).

The new products earned the group $750,000 (about sh140m) in 2003.
“The initiative is intended to demystify the belief that insurance is a service for the middleclass and the rich,” Alexander Wanjohi, the manager, said last week.
Wanjohi said the initiative would help widen the penetration of insurance services into the market.

The group’s personal accident policy sold through 26 local micro- finance institutions and in Tanzania, covered 1.6m lives as of 2003.

Wanjohi said the initiative was growing “and promises a bright future for the insurance market in Uganda.”

He said challenged industry players to think of other ways of selling insurance products rather than traditional use of brokers and agents.

“In South Africa, certain consumer insurance policies are even sold at petrol stations. I do not see why we do not look at alternative channels of selling insurance to bring the services closer to the people,” he wondered.

AIG Uganda is part of the AIG International, the 19th largest business corporation in the world with $90b in revenue as of 2004, a net income of $10b and an asset base of $800b.
Last year, AIG Uganda, the largest insurance company in Uganda, wrote sh20b in premium.

The insurance sector has seen tremendous growth over the past few years.

Assets of insurance companies stood at sh130b as the industry's gross premium increased to sh80b last year from sh62b in 2002.

A report published last year by Murithi Kogi, a Kenyan insurance expert, on insurance training, said the economy was big enough to produce a higher premium but the penetration rate was still low.

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