United Bank for Africa (UBA) has become the ninth financial institution in Uganda to offer insurance policies to their customers and the general public through bancassurance.
The bank recently received its license from the Insurance Regulatory Authority (IRA). It joins dfcu, Barclays, NC bank, Orient, Diamond Trust bank, Stanbic, Bank of Africa and Finance Trust. Banks were allowed to offer insurance services after the amendment of the Financial Institutions Act, 2016.
Unveiling UBA in this role to the press at IRA offices in Kampala, the authority’s acting director for operations, Benard Obel, said if more banks can sell insurance products; it will increase insurance penetration, which stands at 0.73 per cent in Uganda as of 2016.
Bancassurance is the selling of insurance products through banks’ distribution channels. Banks leverage their extensive customer base and wide geographical spread and many branches.
“Bancassurance is one of the ways used for the distribution of insurance products through a bank’s branch network. As you are already aware, there is demand for simple insurance products in Uganda due to the huge and largely untapped emerging markets,” Obel said.
Obel said having banks as insurers will instill confidence and trust in the public, subsequently attracting more people into the insurance fold and given the branch networks banks have, they will be able to reach more people.
“Worldwide insurers have been successfully leveraging bancassurance to gain a foothold in the markets with low insurance penetration and limited distribution channels,” he said.
Joseph Balikuddembe, the executive director, Business at UBA, explained that through collaboration with a range of main insurance companies, UBA will offer varieties of insurance, including life assurance and general insurance.
“We are targeting to work with insurance companies but for now we are starting with Sanlam Insurance (Life), UAP- Old Mutual, ICEA and Jubilee, among others, that will come on board,” he said.
Balikuddembe said insurance products to be offered include life products like endowments, children education plan, credit life and Keyman Assurance.
Other packages for non-life are motor insurance, fire and related perils, traders’ comprehensive packages, personal accidents and home insurance.