Uganda-Re finally coming on board
Nov 29, 2009
TWO foreign strategic investors in partnership with local players have expressed interest in establishing a national re-insurance company.
By David Ssempijja
TWO foreign strategic investors in partnership with local players have expressed interest in establishing a national re-insurance company.
The Uganda-Re is expected to be operational by mid-next year, Dr. Olli-Pekka Ruuskanen, the Uganda Insurers Association chief executive office, disclosed in an interview.
A re-insurance company covers insurance companies against large claims from their clients which may not be easily cleared because of inadequate capital.
Re-insurance companies normally require a lot of capital to operate, which the local players have lacked for decades. This has led to the loss of over 40% of the local insurance premiums to national re-insurance companies operating in neighbouring Kenya and Tanzania.
Uganda’s insurance industry collected premiums worth sh167b last year alone. Lagos-based Continental-Re and Baobab-Re headquartered in Zimbabwe, will take up a 40% stake in the proposed Uganda-Re, while the 60% will be taken up by the local players as part of the regulatory requirement.
Continental-Re and Baobab-Re will also provide vital technical knowledge in the establishment and sustainability of a national re- insurance project.
“Efforts to start a national re- insurance company are geared towards retaining the billions worth of premiums local firms repatriate to re-insurance companies outside Uganda,†Ruuskanen, said.
He explained that with the foreign investors onboard, the minimum capital of requirement of sh2.5b would be easily raised.
“We are optimistic. Work is in progress with Ernst & Young to evaluate the project’s feasibility study.
“We are also in negotiation with the National Social Security Fund to see if they become part of the project,†he said.
Though the shares offer is still open, individuals are not allowed at this stage until after three years, when the shares will be listed on the stock market.
Uganda-Re, as a mandatory requirement, will have her 5% re-insurance placed with Nigeria-based Africa Re-insurance Corp and 10% with PTA Re-insurance Corp in Nairobi.
It is a mandate that all insurance companies in member countries of the Common Market for East and Southern Africa place 10% share of re-insurance with PTA, in the same respect all member countries to the African Union must insure 5% with Africa Re.
TWO foreign strategic investors in partnership with local players have expressed interest in establishing a national re-insurance company.
The Uganda-Re is expected to be operational by mid-next year, Dr. Olli-Pekka Ruuskanen, the Uganda Insurers Association chief executive office, disclosed in an interview.
A re-insurance company covers insurance companies against large claims from their clients which may not be easily cleared because of inadequate capital.
Re-insurance companies normally require a lot of capital to operate, which the local players have lacked for decades. This has led to the loss of over 40% of the local insurance premiums to national re-insurance companies operating in neighbouring Kenya and Tanzania.
Uganda’s insurance industry collected premiums worth sh167b last year alone. Lagos-based Continental-Re and Baobab-Re headquartered in Zimbabwe, will take up a 40% stake in the proposed Uganda-Re, while the 60% will be taken up by the local players as part of the regulatory requirement.
Continental-Re and Baobab-Re will also provide vital technical knowledge in the establishment and sustainability of a national re- insurance project.
“Efforts to start a national re- insurance company are geared towards retaining the billions worth of premiums local firms repatriate to re-insurance companies outside Uganda,†Ruuskanen, said.
He explained that with the foreign investors onboard, the minimum capital of requirement of sh2.5b would be easily raised.
“We are optimistic. Work is in progress with Ernst & Young to evaluate the project’s feasibility study.
“We are also in negotiation with the National Social Security Fund to see if they become part of the project,†he said.
Though the shares offer is still open, individuals are not allowed at this stage until after three years, when the shares will be listed on the stock market.
Uganda-Re, as a mandatory requirement, will have her 5% re-insurance placed with Nigeria-based Africa Re-insurance Corp and 10% with PTA Re-insurance Corp in Nairobi.
It is a mandate that all insurance companies in member countries of the Common Market for East and Southern Africa place 10% share of re-insurance with PTA, in the same respect all member countries to the African Union must insure 5% with Africa Re.