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Bad economy blamed
Despite Magala’s optimism, some observers say the low insurance penetration in Uganda will not change unless the economy improves.
George Mulindwa, a portfolio manager at Stanlib, an asset management firm based in South Africa, belongs to this group.
“If over 50% of the population is below 15 years and over 70% not gainfully employed then who are you going to sell the insurance to?,” he asks.
Mulindwa says the implementation of a national health insurance scheme, as is in Kenya and Rwanda, could increase insurance penetration.
The National Health Insurance Bill, which was supposed to foresee the implementation of the national health scheme, is yet to be passed into law since 2007.
Mulindwa says insurers also have to invest more time in studying the psychology of the market needs.
“Distribution needs to improve; this has been done well with motor vehicle insurance being at every petrol station but does anyone know where to buy education/life insurance? Not me,” he said.
He says insurance companies also need to develop products that “give-back” such as free motor vehicle insurance covers for the fourth year in case one has never made a claim.
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editor@independent.co.ug
