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INTERVIEW | Uganda Insurers Association (UIA) is boosting insurance uptake with initiatives like the ‘Gonza Future’ campaign promoting life insurance. Patrick Kimathi, UIA’s Life and Pensions Chair and UAP Oldmutual MD, discussed this with Julius Businge and here in the excerpts.
Can you briefly tell us about the Uganda Insurers Association (UIA) and its role in Uganda’s insurance landscape?
UIA is a membership organization for insurance companies that promote best practices and sets industry standards. While we establish internal guidelines, we also work closely with the Insurance Regulatory Authority (IRA). We also serve as the industry’s voice, engaging in policy influence and lobbying various stakeholders. Furthermore, we research to support our members in the sector.
Many people seem unfamiliar with life insurance. How would you explain it in simple terms?
Life insurance is a contract between a customer and an insurance company. The customer has concerns, such as the risk of death, and the life insurance company promises to pay a specified amount of money if such an event occurs. In short, the customer pays a premium, and the insurance company agrees to provide the agreed-upon benefit within the specified period in the contract.
From an external perspective, ‘Gonza Future’ means ‘to make the future soft.’ Could you elaborate further on this campaign, its relation to life insurance, and its objectives?
We realized that many Ugandans do not fully understand life insurance policies. The purpose of the ‘Gonza Future’ campaign is to raise awareness and ensure customers comprehend the insurance policies they purchase. It is an educational campaign aimed at helping customers understand the terms and conditions of life insurance policies. The campaign will run for a specified period, approximately six months, after which we will evaluate its impact and determine the next steps.
Let’s discuss common sources of dissatisfaction. If a life insurance policyholder fails to pay their premium on time, is there a remedy available?
Life insurance is a contractual agreement with promises and obligations. Customers need to assess their cash flow to ensure they can meet their premium payment commitments. Most policies include a grace period. For example, if an eventuality like the COVID-19 pandemic happens, companies can provide a window for customers to return with revised terms and conditions. Solutions are usually handled on a case-by-case basis.
If the insured risk occurs shortly after purchasing the policy, is the policyholder entitled to full compensation?
Every insurance contract adheres to standard contract provisions. If all conditions are met and an insured risk occurs immediately, the customer is entitled to compensation unless the policy includes a waiting period.
Claims processing has been a long-standing concern in the insurance sector. What steps can policyholders take to ensure their claims are honored?
On behalf of the insurance association, I would like to emphasize that insurance companies pay claims. However, fraudulent claims can create challenges. According to IRA data, many companies pay claims averaging between Shs 5 billion and 15 billion annually. To ensure claims are honored, customers should thoroughly understand the terms and conditions of their contracts. They must recognize the scope of coverage and the circumstances that trigger a claim. Additionally, customers should provide clear documentation promptly to facilitate the settlement process.
What options are available to policyholders who feel aggrieved or mistreated by their insurers?
There are avenues provided by law and within the contract for lodging complaints. But the first step is to engage directly with the insurer. Insurers have dedicated complaint desks to address policyholder concerns. Additionally, customers can escalate issues to the Insurance Regulatory Authority (IRA) by submitting the necessary documentation for review. The Uganda Insurers Association is also available to provide support and guidance.
The ‘Gonza Future’ campaign seems like a promising initiative to boost insurance uptake, given the penetration rate has remained below 1%. What impact do you anticipate?
The campaign targets a broad audience, aiming to reach a significant number of people in Kampala and across the country. Over the past five years, life insurance has been the fastest-growing segment, with an annual growth rate of 20-25%. We believe this campaign will further drive growth as more people become aware and purchase life policies. General insurance, on the other hand, has been growing at approximately 10% annually.
What message do you have for prospective customers?
We all aspire to a prosperous future, and proper planning is key to achieving this goal. A secure future can be attained by taking up life insurance policies, such as those designed for children’s education. For instance, parents must educate their children, and an education policy can help fulfill that responsibility. My final message is: let people invest in insurance policies to secure their soft future.
