Be creative or perish, Banks told

Banks enrolling for bancassurance have been encouraged to promote creativity to be able to thrive in competitive environments.

The call was made by Kaddunabi Ibrahim Lubega- CEO, Insurance Regulatory Authority (IRA) during the award of a licence to Exim Bank Uganda to provide insurance services.

"We want innovativeness to address exactly what clients need. If banks are going to sell motor policy, they should shift from the usual policy to offering some extensions such as on property," Kaddunabi said.

"The coming on board of different banks into bancassurance will make the work of their customers much easier and they will benefit from technical input."

Bancassurance is an arrangement between financial institutions and an insurers where the financial institution distributes to its customers and prospective customers insurance products through its distribution channels.

"The consumers will have convenient access to a wide range of integrated financial services from a single provider and more competitively priced insurance products as a result of insurers passing on cost savings arising from lower distribution costs," Kaddunabi added:

Kaddunabi believes that insurers will successfully leverage on the banks network to gain a foothold in this financial market.

The licence to Exim Bnk follows the amendment of the Financial Institutions Act 2016 that allow banks to engage in insurance services. IRA receives these applications and it has so far licensed twelve banks such as Stanbic Bank, Micro Diamond Trust Bank and Barclays to provide insurance services.

"The Exim Bank Insurance Agency will provide professional, reliable, simplified and customised insurance services with a wide array of new and traditional insurance products to suit client needs, both for individuals and organisations," CEO Exim Bank Uganda Limited Sabhapathy T.K. said.

Sabhapathy said bancassurance will address digitalisation.