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AIG clients reassured
AIG announced on Nov 01 that they have embarked on a phased withdrawal from the Ugandan market as part of the global strategy to withdraw from some markets.
The move comes at a time when Uganda’s insurance industry is enjoying a relative surge in growth, albeit from a very low base. Insurance premiums underwritten over the years have grown from Shs80.75billion 2004 to Shs 611.13billion in 2015 as a result of massive promotion campaigns and affordable product innovations targeting customer needs.
AIG said its existing clients will continue to receive full policy administration and support for the remaining period of their policies.
“AIG is creating a simplified organisation that positions us to achieve our global strategy based on capabilities and market opportunities,” the firm’s officials said in a statement.
“After careful consideration and an in-depth review, AIG will stop offering insurance products in the general market Uganda.”
The firm said it will ensure a smooth transition through this change and working with all stakeholders to avoid any customer or market disruption.
According to sources in the insurance industry, AIG is expected to close its business in the country within the next two years.
Prior to the latest development, AIG was offering non-life insurance policies ranging from motor vehicle, home, travel to accident since its entry in the Uganda’s insurance market in 1962.
AIG has operations stretching across Africa, Asia, Latin America, Europe, and the Middle East.
AIG’s slow growth in business follow the 2008 global financial crisis that saw its brand become an object of derision, especially in the US, with the spill-over felt across its subsidiaries across the world.
The firm’s record $182.3 billion (Shs 626trillion) federal bailout and its subsequent payouts of bonuses to employees of a derivatives unit sparked public outrage across the US , leading AIG units to erase the logo from signs, employee identification cards, and marketing materials.
In the wake of the September 2008 bailout, AIG renamed various units to Chartis as the parent firm’s financial condition deteriorated.
But four years later, Chartis Insurance rebranded to its former name in a bid to solidify its presence in the around the globe including Uganda.
IRA-U chief executive officer Ibrahim Kadunabbi Lubega says he is aware that AIG is exiting the country as a result of their desire to reduce its presence in various economies.
AIG has closed dozens of its offices especially in the US in a move to cut between $0.5billion (Shs1.72trillion) -$1billion (Shs 3.44trllion) cost over the next three years.
The industry regulator, IRA-U says the departure of AIG could not have been wished for.
“But we are comforted that even when it happens, the businesses will still remain with us because the businesses are being passed on to other companies,” said the IRA-U Executive Director, Ibrahim Lubega Kaddunabi.
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editor@independent.co.ug
