ads. Buy-Import-Export Premium Grade UGANDA VANILLA BEANS Buy-Import-Export Un-Refined Raw SHEA BUTTER
Uganda Insurance premiums to remain stable despite rise in claims
A claim is a formal request to an insurance company asking for a payment based on the terms of the insurance policy while premium refers to the amount of money to be charged for a certain amount of insurance coverage.
A market player says this is because the industry is still profitable and the insurers want to remain competitive in this market where the premiums are ‘tariffied’.
Further, the East African insurance industry is grappling with how best to increase penetration levels amid the current tight market. Claims paid by insurers have doubled in the last three years.
Aon, a leading insurance broker, in partnership with a number of insurers in Uganda paid out Sh10.5 billion in claims in 2013, a significant increase from 2010 when it paid out Sh6 billion.
According to the Insurance Regulatory Authority of Uganda ( IRA) 2013 preliminary figures released late last month, the aggregate net incurred industry claims, in both life and non-life, was estimated at Sh90.7 billion against Sh52.2 billion incurred in 2010, a 73.8% rise in just three years.
“Our market is currently not as sophisticated as in more developed economies in that the risk trends are not catastrophic and do not influence the premiums that insurers charge,” says Maurice Amogola, the Chief executive officer of Aon Uganda.
In the more developed countries, claims payments for reoccurring natural catastrophes like floods, tsunamis, earthquakes and the like have always sent premiums sky rocketing, not mentioning the limitation of insurance cover. On catastrophic risks, insurers put limits on compensation available which forces customers to take up additional insurance covers and pay more premiums to enable adequacy of cover.
For example in southern Africa, unlike East Africa, insurance customers cannot benefit from full riots and strikes insurance cover due to the historical and political nature of the countries thus clients have to top up on their existing primary risk cover. Insurers in southern Africa limit the size of compensation arising from the violence or riots in that the property or factory owners must take up additional specific violence or riots cover.
Currently in Uganda, the highest contributor of the markets’ gross premium is the motor vehicle insurance, contributing about 40% of the industry premium. It also takes the biggest share of claims paid by the industry. For instance in 2013, Aon and their partner insurers paid their clients claims up to a total of Shs2.24 billion for motor claims, being over 21% of all its total claims payments.
The Monitor Newspaper
Click here to post comments
Join in and write your own page! It's easy to do. How? Simply click here to return to Banking Guide Questions and Comments.
Haven't yet found what you Want...?
If you haven't yet found what you were looking for or you need detailed information about the subject matter on this page
feel free to ask our business travel consultants.