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Highlighting the position of Life Insurance in Uganda

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Nicholas Lutakome, Acting Chief Executive Officer of Sanlam Life Insurance Uganda Limited

Nicholas Lutakome, Ag. CEO Sanlam Life Insurance Uganda Limited

By Our Reporter

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Although the insurance sector in Uganda continues to register impressive growth, it is widely agreed that a lot still needs to be done in order for it to reach its full potential and take its rightful place as a cornerstone of our economic growth and overall development.

Indeed, there is every cause for optimism, as under the aegis of the Insurance Regulatory Authority (IRA), a particularly foresighted corps of individuals is staking a claim to ensure the country reaps the full benefit of what the sector can provide. Armed with years of experience gained both here and abroad, they now also possess unique insights on what works, and what does not, when it comes to the business of insurance in Uganda.

“The insurance industry is evolving to be more customer-centric, especially with local solutions for the local insurable interests of the population. This is a change from the past where most products were ‘imported’,” reveals Emmanuel Mwaka, the Chief Executive Officer of ICEA Life Assurance Company Limited.

For long, these ‘imported’ products have generated attitudes of suspicion and mistrust amongst a confused and unwilling populace who only acquire the likes of Third-Party Insurance and Workmen’s Compensation in order to keep on the right side of the law.

Rising levels of literacy have seen to it that although many might now understand what those policies are, they are yet to be convinced of their need and efficacy in the environment they operate in. And can one blame them when, for illustration, it is conceded that even the Government itself has not fully adopted insuring its people and property.

Nicholas Lutakome, Acting Chief Executive Officer of Sanlam Life Insurance Uganda Limited, who just like Emmanuel has over a decade of experience in the sector, also attests to the fact that integrating local knowledge and attitudes has formed the basis for what is now an unreservedly positive outlook for growth.

“The Ugandan society has nothing against insurance,” he explains, “In fact, within our society we already actively practice insurance of some sort. Take the example of a death in a community: this triggers natural generosity to raise financial support from well-wishers in solidarity with the bereaved. These contributions are pooled together and handed to the bereaved and, in a way, serve to reduce the financial and emotional anguish caused by the loss of the loved one. This is exactly how insurance works, the main difference being that, with insurance, contributions are pooled prior to the occurrence of the unfortunate event.”

“By acknowledging that many Ugandans understand insurance in very simple terms through their day to day responses to life circumstances, we are doing better at convincing them that it serves better as the buffer against future unknown events that can lead to financial distress,” Nicholas adds.

One of the major moves in this direction was the demerger of Life and Non-Life Insurance, operationalized about 6 years ago. “There has been a special focus on insurance products that have the highest impact on society such as Life Insurance whose contribution for the total Gross Written Premium has tripled from about 10% to a few percentage points shy of 30% over the past 10 years,” Nicholas reveals.

And we are just getting started, for it is Nicholas’ belief that Life Insurance will eventually overtake Non-Life in terms of Gross Written Premium before 2030. This will be in line with the global trend which according to Swiss Re, Life Insurance premiums constitute 54% of the global insurance market.

This optimism has been bolstered by the effects of another major strategy- the introduction of bancassurance a few years back.

“We arguably have the best bancassurance regulations in the region. And the initial results have shown that banks are keen on distributing Insurance Products to their customers, especially Life Products.” Nicholas adds.

“And the industry figures clearly reveal that Ugandans, now possessed with better understanding of what insurance can do for them, are now looking beyond the perfunctory offerings like Third Party and Workmen’s Comp- the asset base has grown from 400 billion to about 1.6 trillion in the past 10 years, with Non-Life Insurance contributing about 70%, Life Insurance contributing about 28%, and the rest coming from Health Maintenance Organizations (HMOs). Of course, some might still consider this small in comparison to the banking sector, which has assets in excess of 30 trillion, but it is nonetheless remarkable progress.”

As earlier mentioned, insurance can play a far greater role in providing a bulwark for Uganda to improve its development indices, from health to education to infrastructure and all. And today’s gains can only be built upon if the right decisions are made in regards to the sector, decisions, needless to say, where it would be wise to consider the input and leadership of the likes of Nicholas and Emmanuel, individuals with the experience and knowhow to seamlessly blend local sensibilities with international best practice.

One must start off with the fact that the importance of professionalism cannot be overestimated.

“Ensuring that the support institutions such as the Insurance Training College are well equipped to provide education, training and professional development in the industry is a big step in the right direction,” Emmanuel asserts.

It is with Nicholas’ earlier example in regards to the community assisting the bereaved to gather resources that both he and his colleague advocate the need for change in Uganda’s insurance sector: quite simply, it is necessary for people to be given an enabling environment to encourage them to pool their resources better.

“Given the opportunity, I would promote long term investments by offering incentives for every Ugandan through avenues like tax waivers for those who invest regularly in long term assets like Life Insurance and Pension Funds,” Nicholas asserts. “The amassed funds would create a reasonable pool for the economy to borrow locally, thus pushing the desired developments in infrastructure as well as private businesses.”

Emmanuel divulges similar thoughts, “The tax regime for insurance needs to be relaxed to allow for it to grow without seeming unaffordable for the population. Taxes such as VAT should be minimized or suspended.”

Also, Emmanuel adds, because life insurance typically encourages and grows the saving culture in the country, it is important that tax incentives for the population are created linked to the amount of life insurance an individual takes out. This can be in the form of deductibles for salaried earners before PAYE is computed. Eventually this will create the much-needed pool of funds that can be used by insurers in performing their investment functions, to finance public projects through purchase of government securities, Public Private Partnerships projects and the like.

As of now, though, there exists a stalemate. As Nicholas explains, “Currently the cost of borrowing is so high with annual interest rates in excess of 17%. This makes it hard for businesses to offer affordable services to the population, with many choking on loans and eventually dying. The lack of funds further forces our government to borrow a lot externally to fund programs. This greatly reduces our forex reserves and continues the downward spiral by imposing catastrophic pressure on the taxable income for Ugandans.”

Adoption of the right policies will thus not only ensure that old age poverty is done away with, through the provision of pension and annuity products to the senior citizens, but will also produce enough resources to sustain our economy in the medium to long term.

We do have individuals who can guide us to that point. It is only wise that they are given the opportunity.

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Local Business

TDB donates medical equipment and supplies to local hospitals to boost their efforts in fight against COVID-19

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Trade and Development Bank (TDB) has donated different types of locally-procured medical supplies, medical equipment and personal protective equipment (PPE) to close to Ugandan 60 hospitals

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By Our Reporter

As part of its Covid-19 Emergency Response Programme (CERP), the Eastern and Southern African Trade and Development Bank (TDB) has donated different types of locally-procured medical supplies, medical equipment and personal protective equipment (PPE) to close to Ugandan 60 hospitals, in collaboration with the Office of the Prime Minister of the Republic of Uganda and the country’s National Response Fund to Covid-19.

Donated supplies include: 1,060 examination gloves, 500 surgical gloves, 1,000 surgical masks with folds, 1,000 NK95 respirators, 500 fluid-resistant coveralls, 300 face shields, 600 protective goggles, 1,000 heavy duty aprons, 800 heavy duty gloves, 120 gum boots, 500 cotton wools, 480 safety boxes, 300 fluid resistant gowns, 500 sanitizers, 500 sodium hypochlorite, and 100 infra-red thermometers.

The supplies were handed over during a ceremony hosted by the Rt. Hon. Dr. Ruhakana Rugunda, Prime Minister of the Republic of Uganda by – on behalf of TDB – Mr. Richard Byarugaba, Managing Director of Uganda’s National Social Security Fund and shareholder representative on the TDB Board of Governors, to Mr. Emmanuel Katongole, Chairperson of the National Response Fund to Covid-19.

“This donation will enhance Ugandan hospitals and health care workers’ level of preparedness to combat the Covid-19 pandemic and make sure that they, themselves, are adequately protected to continue helping others,” said Mr. Byarugaba.

“We are delighted to contribute to the efforts deployed by the Government of Uganda towards the fight against Covid-19,” added Admassu Tadesse, TDB President and Chief Executive. “Indeed, we are working hard in tandem with various partners in our Member States to curb the spread of the virus and mitigate its impact. This urgent action complements the reprioritized financing interventions we are rolling-out for enterprises, sovereigns and financial institutions via TDB’s operations complex. It is only by acting in solidarity that will shall defeat this common enemy”.

Mary Kamari, TDB Corporate Affairs and Investor Relations Executive commented that, “CERP is part of TDB’s COVID-19 broad response plan. So far, this targeted direct assistance programme has delivered to various TDB Member States medical supplies, equipment & PPEs, water, sanitation and hygiene (WASH) interventions, support to local SMEs, to women and youth employment, as well as a contribution to the African Union’s Africa CDC, among other actions.”

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Local Business

Thousands of lives impacted by MTN MoMo Nyabo Promotion

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Betty Nanfuka and her husband jubilate after receiving their money won in MTN MoMo Nyabo promo.

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By Our Reporter 

For three years now, Telecom giant, MTN Uganda runs an annual Mobile Money Promotion known as MoMoNyabo. All MTN customers are eligible to participate and they are required to perform an MTN MoMo activity such as buying airtime, sending money or making payments in order to be stand a chance of winning.

The Covid-19 pandemic presented a different scenario with people’s lives being affected adversely affected both on a personal or business perspective. To that end MTN decided to stand with its customers as they were going through the rebuilding process. This year’s MoMo Nyabo promotion focused on giving out Mobile Money prizes with the aim of helping people to financially rebuild following the devastating effects of the Covid-19 pandemic that has left many people financially struggling.

After the six weeks’ promotion that saw over 1.2 Billion shillings in prize money and over 7000 winners from all walks of life and different parts of the country, Steven Nsubuga, the MoMo Nyabo Project Manager had this to say: “We have seen winners including teachers, farmers, hair stylists, students, business people, cab drivers and many others and we hope their prize money goes a long way in helping them during this period as they rebuild.”

He added; “More and more customers are embracing MTN MoMo because it is convenient and versatile with customers making all kinds of payments, sending and receiving money across Uganda, throughout East Africa and indeed around the world and customers are also saving and borrowing using MoKash.”

As suggested by the name “MoMo Nyabo Together”, the promotion saw the winners sharing some of their prize money with their loved ones or communities as a way of helping each other rebuild ‘together’ as we continue coping with the effects of the pandemic.

For instance, Elikana Ecima, a headteacher from Arua, one of the winners who got UGX5,000,000 chose his wife Angucia Neria as a beneficiary to the money he won. Whereas Neria walked away with UGX2,000,000, he stayed with UGX3,000,000. Ecima was one of the several winners who took part in the MoMo Nyabo Together TV game show hosted by Zahara Toto and Patricko Mujuuka.

There were 2 daily winners from Monday to Friday who were randomly chosen and called in the TV show. Apart from the winners like Ecima who were called in studio, there were 250 people who won UGX 50,000 everyday which was sent to their phones using MTN MoMo. All they had to do was pay for anything using MTN MoMo and stand a chance to win.

According to Stephen Mutana, the General Manager MTN Mobile Financial Services, this promotion was aimed at giving back to the customers that have supported MTN and the MTN Mobile Money services altogether.

“The promotion came to a successful end last week and we couldn’t be any happier. We are glad we were able to not only give back to our customers but we also showed our commitment to stand with our customers during hard times such as this one,” Mutana said. He urged the MTN customers to continue using MTN MoMo because of its safety, convenience and affordability.

Christina Molly Kabuye one of the MoMoNyabo Together Promotion winners from Sembabule district praised MTN for remembering its customers especially in these hard times.

Like Kabuye, many of the winners were thankful to MTN for choosing to reward them with Mobile Money at a time when they least expected it.

From paying hospital bills to revamping businesses and paying school fees, the MTN MoMoNyabo Together promotion has resuscitated the lives of many Ugandans and their loved ones in so many ways.

Having run the impactful MTN MoMoNyabo promotion between July and August to help its customers rebuild from the devastating Covid-19 financial disruptions, MTN Uganda has, this month of September shifted its attention to protecting its customers and the entire nation at large by encouraging mask wearing as one of the most effective ways of preventing the virus.

Dubbed #WearItForMe, the campaign will see MTN reach out to the communities to embrace the much-needed behavior change as a way of fighting the spread of Corona virus.

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Mentor Senior Secondary School crowned Stanbic National Schools Champions

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Mentor Senior Secondary School from Lira district emerged winners of the 5th edition of the Stanbic Bank National Schools Championship

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By Our Reporter

Mentor Senior Secondary School from Lira district have emerged winners of this year’s Stanbic Bank National Schools Championship. This after a panel of judges selected their business plan, Edutele, an education consultancy service that has been helping students attend virtual classes during the lock down, as the overall best startup.

The other finalists were Nabisunsa Girls School from Central Uganda, Kyebambe Girls from Western Uganda, and Mpumudde Seed Senior School from Eastern Uganda.

Unlike the previous National School Championships, this year brought together all students and schools that have excelled in the championship and continue to nurture the businesses that they started as a result of the championship.

The three in one awards ceremony had three categories of winners involving both the students, alumni and existing schools from past years under the categories; Startup challenge – New business ideas generated, BizGrow challenge – Existing businesses in schools from past four years and AlumGrow challenge – National Schools alumni personal businesses.

Some 600 business ideas were generated during the course of the competition compared to 400 last year. Students were also challenged to take into account the COVID-19 pandemic and present business plans that were in conformity to the United Nations Sustainable Development Goals.

Also notable this year, was that most of the activities during the qualifying stages were carried out online due to the pandemic that forced the government to close educational institutions at the end of March. However there was no letup in the enthusiasm among the students.

Barbara Kasekende, Stanbic Bank’s Corporate Social Investments (CSI) Manager speaking during the awards ceremony at Sheraton hotel Kampala said, “I have been amazed by the kind of projects the students came up with. They managed to find gaps in their communities where they live and proposed solutions for these challenges including COVID-19. Just over 60% of the business plans entailed the manufacture of hand sanitizers and/or similar sanitation products.”

The Stanbic National Schools Championship, now in its 5th edition, is the Bank’s flagship CSI programme. Its aim is to enhance skills development through equipping students with entrepreneurship and critical thinking skills in an effort to help prepare them to be job creators in the future.

“The students displayed an amazing ‘I Can Do it’ attitude which is part and parcel of why this CSI programme remains so popular five years after we started this initiative. We started out with 40 schools. Last year 72 schools took part, but this year we had 100.” She added.

Apart from business proposals to counter the COVID-19 pandemic, students also presented proposals for reusable sanitary pads, potato processing, flavored ghee, digital services for marketing and learning.

In 2016 and, in partnership with the Ministry of Education, the Championship was launched.

Since then, several partners from both the public and private sector have come onboard. Today, the programme has over 12 partners and continues to run with the theme ‘Empowering the job creators of tomorrow’.

The focus is on entrepreneurship and life skills in order to empower young people to relate with the new modern world.

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Airtel Uganda announces partnership with Jumia

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Airtel Uganda has launched a partnership with Jumia to enable subscribers to complete payments directly on the platform.

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By Our Reporter

Airtel Uganda has announced a partnership with Jumia that will enable subscribers to complete payments directly on the platform.

The partnership enables Airtel Uganda subscribers to quickly and conveniently make payments for their purchases across all Jumia platforms ensuring cashless transactions that are safer especially in the current times when the world is faced with a global pandemic.

“We are excited to partner with Jumia to offer customers a convenient, safe, fast and secure payment solution on one of the largest e-commerce platforms in Uganda at no extra charge,” commented Airtel Money Head Merchant Portfolio Mr. Godfrey Muhindo.

“This partnership is a significant step forward in our ambition to digitize Ugandans and promote financial inclusion,” he added.

Jumia is the largest online marketplace in Uganda providing a platform for thousands of consumers and vendors across Uganda to connect and transact.

“The launch of Airtel money payment onto our platform is a huge addition that we believe will benefit our consumers. Millions of Ugandans depend on mobile money to make their daily transactions, and by expanding our payment methods to include Airtel money, it will make it easier for more consumers to incorporate online shopping as part of their daily transactions,” said Ron Kawamara Jumia Uganda CEO.

The service is easy to use once the customer is subscribed to both Airtel Money and the Jumia platform.

The new service is valid for all Jumia consumers across the country and for all items available on the Jumia platform including the Jumia Food platform.

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