Bancassurance Manager at UAP Old Mutual Life Assurance (PHOTO/Courtesy).
Financial Inclusion in Uganda remains alarmingly low. A 2021 National Labor Force survey indicates that 87% of Ugandans are not banked. In addition, according to a 2020 Bank of Uganda baseline survey, the overall financial capability score of Ugandans is only at 50.4 percent. The situation with insurance penetration is not any better although, significant strides have been made to grow the sector and increase awareness over the years.
Current insurance penetration in Uganda remains below 1% per official publications of Insurance Regulatory Authority.
Bancassurance is perched up there, among the most effective darts thrown at driving financial inclusion.
Bancassurance refers to the practice where insurance companies utilize banks as an additional distribution channel for their products. In this model, the bank functions as an intermediary, complimenting the insurance company in reaching its targeted and prospective consumers. This arrangement appears to have mutual benefits for both the banks and the insurance companies.
The banks can use their current staff to earn non-funded income (commissions) by delivering insurance services in addition to their existing streams of income. On the other hand, insurers can gain access to new customers through this distribution channel, which increases their revenues, market share and drives insurance penetration as mandated by the IRA. This is a win-win for both parties.
Since the inception of Bancassurance in 2017, it has played an increasingly important role in banking operations and driving insurance penetration. The banks are now generating considerable commission income, and it has become one of the most successful distribution channels within the insurance markets.
The commission that is presently produced by bancassurance business gives the banks a significant boost to their financial standing. According to IRA, the insurance business earned gross written premiums (GWP) of UGX 1.4 trillion in 2022. Of this amount, the bancassurance portion of premiums was UGX 143 billion, which is an increase from the figure of UGX 103 billion in 2021.
The bancassurance market segment has experienced year-on-year growth of 38%, and its contribution to the industry’s total premiums in 2022 was 9.9%
In this article, we will explore ways in which bancassurance can play a significant role in driving financial inclusion and insurance penetrations in the years to come.
Unlocking Value for Customers:
At the heart of bancassurance lies a customer-centric approach that prioritizes convenience, choice, and tailored solutions. By leveraging the banks’ extensive branch networks and trusted relationships, customers gain easy access to a wide range of insurance products, including life insurance, health insurance, property insurance, and investment-linked policies. This convergence of services empowers customers to address their financial risks and secure their future through a trusted institution they already have a relationship with.
Empowering Financial Well-being:
Bancassurance has the power to transform how customers perceive and engage with financial products. Through comprehensive financial planning and risk management, bancassurance enables customers to protect their assets, mitigate risks, and secure their loved ones’ futures. By offering a diverse range of insurance products, tailored to meet specific customer needs, this collaboration ensures that individuals and businesses alike can navigate life’s uncertainties with confidence.
The Role of Technology:
In today’s digital era, technology plays a pivotal role in redefining the customer experience. Bancassurance harnesses technological advancements to streamline processes, enhance accessibility, and improve service delivery. Through user-friendly online platforms and mobile applications, customers can easily explore insurance options, receive personalized recommendations, manage their policies, and initiate claims, all with just a few clicks. Technology-driven innovations ensure that bancassurance remains a convenient and efficient solution for customers, empowering them to take control of their financial well-being.
UAP Old Mutual Life Assurance (now Old Mutual Life Assurance Uganda Limited): Leading the Way
In Uganda’s vibrant insurance landscape, UAP Old Mutual Life Assurance Uganda Limited (now Old Mutual Life Assurance Uganda Limited) stands out as one of the pioneers and leaders in the bancassurance space. With a strong legacy and a commitment to excellence, UAP Old Mutual has consistently embraced innovation and collaboration to cater to evolving customer needs.
Through strategic partnerships with leading banks, we have expanded our reach, making our comprehensive suite of insurance solutions easily accessible to a wider customer base.
We have a robust team of Bancassurance sales officers stationed in different banks across the country that are ready to guide and sign you up for a personalized life insurance policy that will meet all your financial obligations.
The Author, Mr. Denis Kitoshi is the
Bancassurance Manager at UAP Old Mutual Life Assurance
