Insurance product incubation program bears fruit

Kampala, Uganda | THE INDEPENDENT | The insurance industry has successfully implemented a product incubation project aimed at supporting seamless role out of innovative products onto the market.

The project, a regulatory sandbox, provides a controlled environment for the live-testing of new products, technology, or business models under the watchful eye of the Uganda Insurance Regulatory Authority (IRA).

Akin to the regulatory sandbox at the Bank of Uganda for financial institutions, the IRA-run sandbox dubbed commenced in 2023 and received nine applications.

Of the nine, four were admitted into a regulatory sandbox to continue the development of the product, while the other five did not meet the criteria, according to IRA Chief Executive Officer, Ibrahim Kaddunabbi Lubega.

He adds that they also partnered with Innovation Village to have a alternative approach of supporting innovators, under the InsureX programme.

This was revealed at the 60th CEOs Meeting organized by IRA for the industry leaders.

The program technology-driven innovations to create pathways for digital solutions targeting last-mile users, with the ultimate aim of doubling sector penetration by 2025.

It is also aimed at ensuring that the products that are brought onto the market are well-tested are not likely to have adverse effects on the consumers, the industry and the economy.

While in the programme, thee innovators are trained on leveraging shared Infrastructure and Open Platforms to drive innovation within the Insurance Sector.

They are also integrated into a connected tech ecosystem that enables them to experiment with their innovative solutions and products, aiming to enhance efficiency and accessibility of insurance services, according to Innovation Village that partnered with IRA to implement the incubation process.

Lubega said by the time the products get out of the sandbox, they are ready to make an impact on the industry.

Apart from increasing the pace of innovation and the rate of market penetration, the regulatory sandbox is also aimed at reducing the number of failed projects by innovators, by helping them perfect their ideas.

While the insurance industry is growing at a commendable rate of more than 10 percent per year, having reached 1.6 trillion shillings in Gross Written Premium in 2023, it’s contribution to the economy is still very low.

The industry penetration has hovered around 0.8 percent for several years, and this situation is expected to change with the venturing into new products.

This is the reason the IRA is encouraging innovation to attract more people to embrace the services.

Lubega says there are more Innovation opportunities in claims payment, cyber risk and micro insurance areas.

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