Mr. Fred Ndugga, a Masaka district trader, is a relieved man after receiving UGX 85 million from SWICO. The payment was compensation for his stock in the shop that burnt down to ashes on June 13, 2020.
Ndugga’s shop operating under the name Lubwama, Ndugga Ltd in Masaka town, was dealing in general merchandise.
SWICO has grown and maintained its market share by consistently paying claims on time. As Ms Florence Namagembe, the SWICO General Manager is quick to point out, insurance, is not as expensive as many fear. She explained that a business worth UGX 100 million in stock would require one to pay only UGX 300, 000 annually in insurance premiums; a much cheaper option than say selling one’s land or borrowing heavily to replace the stock after a loss.
Ndugga was not the only trader in Masaka to suffer misfortune, with at least 20 shops and a wooden video hall also burning down in the district since April, 2020.
“My call to the Masaka business community is to protect your wealth with insurance cover,” Namagembe said.
Insurance penetration in Uganda stands at only 0.8% of GDP, largely because of misconceptions about compensation.
The Regulator’s Perspective
The Insurance Regulatory Authority (IRA) recently issued payment guidelines. Claims between 10 and 50 million Uganda shillings should be cleared within 15 working days, while those above UGX 50 million insurers should be cleared within 20 working days or a month, at most.
“Without doubt, we will register more insurance uptake with this increased efficiency in claims settlement,” Alhaj Kaddunabbi Ibrahim Lubega, CEO of the IRA said, in a recent press interview.
Mr. Kaddunabbi is especially optimistic of continued growth of micro-insurance, boosted by increased innovation in product distribution via mobile money platforms.
“Micro-insurance grew from UGX 24 million in 2018 to UGX 300 million in 2019” he said. SWICO, one of the oldest indigenous insurance companies in Uganda, offers general insurance solutions.
Written by BUSINESS FOCUS