KAMPALA–The Insurance Regulatory Authority has started issuing Bancassurance licences to Banks.
This first beneficiary from the exercise is Stanbic Bank.
The granting of Bancassurance license to Stanbic came on the heels of the passage of the Financial Institutions Amendment bill 2016 which included a provision for Bancassurance and the subsequent approval of the regulatory guidelines by the Bank of Uganda BOU.
The Financial Institutions Act 2016 specified that the Insurance Regulatory Authority IRAU would be responsible for receiving applications and licensing financial institutions to conduct Bancassurance business with authorisation from the Central Bank.
Handing over the license at ceremony held at the IRAU Headquarters in Nakasero, Alhaj Kaddunabbi Ibrahim Lubega, The CEO of Insurance Regulatory Authority of Uganda said the introduction of Bancassurance as a strategic distribution channel of insurance is one of the most significant recent developments in the Financial Services Sector in Uganda.
“It will increase access to insurance services amongst Ugandans in different parts of the country through the vast bank branch network,” he said further adding that the high level of confidence and trust generally placed by the public in banks makes them particularly well positioned to attract consumers to purchase insurance products from their distribution outlets.
“It is through such partnerships that the insurance industry can grow and increase its penetration in Uganda.”
Receiving the license on the behalf of the bank Patrick Mweheire the Chief Executive of Stanbic Bank noted, “We are extremely proud to be the first Commercial Bank in Uganda to offer Bancassurance. As Stanbic, we have been preparing to launch the service for some time now and have invested significantly in training staff, signing partnerships and putting in place the technology and infrastructure needed to roll out the product smoothly.”
He continued, “Naturally key to the success of this project will involve raising public knowledge and awareness about the various benefits and types of insurance products available through banks. To that end, we look forward to working with the regulator and other industry players to run effective communications and stakeholder initiatives that will ensure this happens.”
Talking about the benefits of selling Bancassurance Lydia Kayonde Head of Bancassurance at Stanbic Bank explained, “Because everything happens under one roof, Bancassurance will provide customers with a one-stop-shop solution which offers greater convenience, savings and choice. In addition, the premium prices will be better negotiated and product turnaround times will inevitably improve. Bancassurance is an efficient distribution channel with higher productivity and lower costs to serve than traditional sales channels.”
Bancassurance is the selling of life assurance and other insurance products and services by banking institutions.