Agriculture insurance making inroads in Uganda
DESPITE agriculture being the backbone of the economy, insurance companies have been reluctant to come up with products for Uganda’s biggest employers
By Billy Rwothungeyo
INSURANCE products for the agricultural sector are on the rise as players seek to grow insurance coverage in the country.
Despite agriculture being the backbone of the economy, insurance companies have been reluctant to come up with products for Uganda’s biggest employers.
NIKO Insurance is the latest company to roll out products in the sector with three types of agricultural covers for livestock/ animal and crop insurance, weather indexed cover and ‘Kungula’ agri-insurance covers.
“Insurance responds to the needs of the Ugandan economy and not the Ugandan economy responding to insurance. Insurers have an obligation and business interest in agriculture, the key opportunity remains creating critical mass to ensure agricultural insurance is viable,” Brian Kapito, the CEO of Niko says.
Kapito reckons that a rise in the middle class will see insurance numbers up. Uganda has the lower insurance penetration when compared to neighbours Kenya and Tanzania.
“The growth of the middle class including their property and net worth and their desire to remain the same or better will create the need to manage their risks which will drive insurance,” he reasons.
He adds: “There is much confidence in the continued strength of the Ugandan economy; this holds promise for the availability of property to insure and critically the availability on average among the population of disposable and discretionary incomes that allow the consumer to buy insurance.”
But he says other players also have a role in the growing the insurance sector in the country.
“The banking fraternity must protect its loans and insurance is a preferred risk transfer mechanism. The relevant government bodies or private and insurers must create deliberate awareness of the risks people face on a daily basis and provide alternatives to minimising or removing these risks for Ugandans as a whole to embrace insurance,” he says.
The insurance company recently launched the 'X-tra' insurance covers.