Players seek faster bancassurance growth in Uganda ahead of 10th anniversary

• Banking and insurance industries in Uganda are working to drive faster growth of bancassurance channel
• The industry stakeholders are focusing on increasing insurance penetration in Uganda, currently at 0.8%
• Bancassurance is a partnership between a bank and an insurance company to sell insurance products

With less than two years to mark the 10th anniversary of bancassurance in Uganda, the industry stakeholders are synergising on how to pick up the pace.

At the inaugural Bancassurance Thought Leaders Forum held at Golf Course Hotel in Kampala, the industry heads emphasised the role that bancassurance can play in pushing insurance penetration, in Uganda, which remains at a measly 0.8%.

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What is bancassurance?

Bancassurance is a partnership between a bank and an insurance company which allows the bank to sell insurance products, such as life insurance, health insurance, or property insurance, to its customers.

In Uganda, bancassurance operations started in 2016 with the amendment of the Financial Institutions Act.

While more banks have come on board and gross written premium numbers steadily increased, players have been called upon to explore more growth opportunities.

Exploring untapped opportunities

Martha Aheebwa, the chairperson of the bancassurance technical committee at the Uganda Bankers Association rallied the stakeholders at the conference to be more innovative to avoid stagnation.

“At the 10th anniversary of Bancassurance, we are very keen to avoid stagnating because we are looking at this as something that will propel our industry and hopefully help us breach the 1% (insurance) penetration,” she said.

According to Ahebwa, so far 19 banks are licenced as bancassurance agents, offering services in 401 branches.

She also noted that from 2020 to last year, the gross written premiums through bancassurance had grown from Shs 83billion to over 170billion. This represents about 9% of the gross written premiums in the insurance industry.

“The insurance industry has 2800 staff and of these 426 are employed in bancassurance, which is about 15%,” she said.

“There is, therefore, real value in partnering with financial institutions.”

Speaking at the conference, Hajj Ibrahim Kaddunabbi Lubega, the CEO of the Insurance Regulatory Authority also emphasised the potential of more partnerships between banks and insurance companies.

“We at IRA have been approving products where banks partner with insurance players and they have worked. The bank executives need to realise that there is much more money insurance than the profits you are making in other ventures,” he added.

Lawyer David K Mpanga, who gave the keynote speech emphasised the importance of collaboration

“Banks can leverage their customer base and data analysis to identify customer needs and preferences in bancassurance. This enables them to tailor insurance products, ensuring higher customer satisfaction,” he said.

Mpanga also called for enabling legislation, regulation, and guidelines for the sector.

The event was held under the theme: "A Reflection of Insurance in Uganda: There is value in partnering with your financial/bank for insurance services."