People's negative mindset hindering insurance penetration

PIC: Kwesiga (right) said there is need for stakeholders to educate the public so as to increase penetration from the current 0.75%. (Credit: Wilson Manishimwe)

INSURANCE

Kampala - The insurance service provider company aYo Uganda, has attributed the low penetration of insurance to people's negative mindset and lack of proper sensitisation on their significance.

According to Edwin Kwesiga, the aYo Uganda chief executive officer, there is need for collaborative efforts from financial institutions, the government and other stakeholders to educate the public to increase penetration from the current 0.75%.

"The biggest challenge facing insurance companies is penetration. We believe more community reach-outs, and awareness will help in increasing the insurance penetration in different parts of the country," he said.

Kwesiga made the remarks during the launch of the company's promotion dubbed "Fuuka Don ne aYo", a promotion that will see the participants stand chances of winning instant airtime of sh10,000 daily.

The participants will also be entered into the draw to win sh1m every week for the next eight weeks, which is the duration of the promotion.

Kwesiga applauded the Government for the continued efforts of championing the insurance growth such as supporting the bancassurance. Bancassurance involves use of banks to sell insurance on behalf of insurance companies. Currently, different banks such as Diamond Trust Bank, Stanbic Bank and Barclays Bank have embraced Bancassurance.

The selling of insurance services by banks followed the amending of the Financial Institutions (amendment) Act 2016. The Insurance Regulatory Authority receives applications from financial institutions so that they can conduct bancassurance. The institutions should, however, have a prior approval from the Bank of Uganda.

According to Thomas Sekanwagi, aYo's marketing manager, about sh8m will be won at the end of the promotion (April 15).