Deepening Insurance penetration

By Agnes E. Nantaba

John Karionji is the CEO of Insurance Company of East Africa (ICEA)-General. He spoke to Agnes E. Nantaba about the pertinent issues in the insurance industry in the country.

What are the key elements in your management philosophy as a manager?

Believing in the people and growing them, which involves developing and empowering them. We work as members of one team believing that there is no single person who can achieve in isolation.

We develop and implement strategies together, which spells out each other’s responsibilities to achieving the goal. It’s a more effective way to manage because it elicits more commitment and effort from the individuals involved.

I may decide to do it myself or delegate. I let people do it their way and in case of any challenges, they seek solutions from me. It makes me both a delegator and a do-it-yourself manager depending on the magnitude of the work and the circumstances under which it must be done.

What is your assessment of the performance of the insurance industry in Uganda?

Insurance as an industry has been growing over the years and currently it has become very competitive and complex as a business. Every year, we have two or three companies opening office in Uganda.

They introduce new elements of doing business, which also means that the already-established players should be more innovative and discover new ways of doing business or ensure that their ideas are not rendered useless by the new players and the market.

The Ugandan insurance industry is small and underpenetrated, which highlights poor public perception of the industry. What is your strategy towards mitigating this?

It is true that insurance penetration in Uganda is still low but it is also important to note that it has been steadily growing over the years. It is not a one company problem but an industry issue at large that calls for combine players in the market.

The low levels of penetration in Uganda have been linked to low levels of sensitization, the perceived high cost of insurance, the impression that insurers do not pay claims, low levels of disposable income and the lack of tailored products.

However, we as players are also working hard and of recent changed our approach to the market by strategically using more face-to-face engagements to talk to people about insurance in real time, using media as a strategic partner and leveraging on cross sector partnerships to access and educate more people across the country.

There is still limited number of insurance products available in the market. What opportunities can the industry explore to change that situation?

We have enough products available in the market to the extent that our products address every risk area in the country. We also look out for any emerging risk areas so that we develop specific products tailored for such areas.

Currently, the oil and gas sector is here and we have already developed products in this area. It is a whole procession of areas in drilling or exploration, transportation, contractors’ risks, etc. The products are enough and we are always proactive in determining new critical areas depending on the changing lifestyles and demands of modern people.

There is no risk we cannot handle so the industry is prepared to handle all risks.

ICEA unveiled the ‘Diva Motor Policy’ to meet the basic needs of drivers. How has the policy performed over the last one year?

It has received positive perception from the target public. The policy allows female motorists to claim for loss of their personal possessions like a handbag and its contents in the event of an accident or theft of the insured motor vehicle. In partnership with Automobile Association of Uganda (AA), the lady driver will benefit from a countrywide 24 –hour roadside assistance services like tyre changing and car towing.

Health and life insurance constitute the lowest portion of written premiums in Uganda’s insurance industry. How do you plan to improve this at ICEA?

Health insurance is a very difficult insurance product because it is highly abused by the users. Everybody in the chain wants to make money from insurance in one way or the other. But we are looking at bridging the gaps so that we are also able to make some profits. True, there are no returns in that area.

Cases of clinics billing insurance companies for diagnosis or procedures that were not done on the patient is one of the greatest challenges in the health insurance.

There are public claims about poor claims settlement by insurance companies in Uganda. How do you ensure an efficient claim-settling process?

Simple; insurers are only able to pay your claims if you also promptly pay your premiums. But most insured people want to pay their premiums after incurring a claim. If it is done the right way, the insurer shouldn’t take long or poorly settle someone’s claim.

The basic entry point is the report. File a claim report with what you have suffered from. Depending on which claim as some may require police or technical report so it’s not an off the shelf kind of process but we strive to ensure an efficient process.

Where do you see the insurance industry in Uganda in the next few years?

With the current trend, the industry is promising as the penetration levels are expected to grow continuously. In this region, the insurance industry is growing between 18% – 20%, which is a good rate compared to other regions.

It will be particularly interesting to see how the market would react given the industry’s willingness to change its approach, the strides being taken to make insurance more relatable.

And with the oil and gas industry coming up and its ripple effects, there is a insurance has a promising future.