The Uganda Insurers Association expects to collect Shs60 billion from marine insurance, the UIA Chief Executive Officer Miriam Magala, has said.
According to Ms Magala, the UIA in conjunction with the Uganda Revenue Authority, Uganda Shippers Council, clearing agencies and other stakeholders, will ensure the successful uptake of the marine insurance industry, whose average growth in the past five years stands at only six percent.
The projections are based on the 2017/18 national budget which calls for the mandatory payment of third party insurance for vessels doing business on local waterways.
“We are confident that once the implementation framework has been developed and is implemented, marine insurance should yield at least Ugx 60 billion in 2017,” Ms Magala says, adding that UIA is closer to achieving the industry goal of 3% penetration by 2025, which is ‘in line with its 10 -year market growth and development plan’.
UIA, Ms. Magala further says, expects an average 7% increase in insurance premium for the motor, agriculture and marine insurance categories in 2017 due to pronouncements in the 2017/2018 budget which should see compliance with the mandatory motor third party insurance and marine insurance reach 100 percent.
Section (3)(2) of the Insurance Act makes it mandatory for only insurance companies licensed under the Act to issue insurance policies on ships, aircraft or other vehicles registered in Uganda; and on goods imported from other countries, except personal effects and donations.
Despite this being part of the law, Ms Magala says, it was not being complied with and as a result many Ugandans insured their cargo with foreign companies which, for some importers, presented challenges with no clear means of recourse when their cargo faced difficulties.
“Further, as a country, we are estimated to have lost over USD335 million in business insured abroad between 2009 and 2013,” Ms Magala says, adding that the money could have been retained to build the Ugandan economy.