Ibrahim-Kaddunabbi-Lubega-IRA-CEO

By George Mangula

The Government of Uganda recently announced its plan to rationalise agencies, commissions and authorities, causing a wide-spread debate on the implications of the changes on the affected institutions, employment opportunities and service delivery.

Now local insurance players under the umbrella of Uganda Insurers’ Association (UIA) have come up to, urge government to leave out their regulator-the Insurance Authority of Uganda (IRA), which they say has helped so much as mandated, to streamline the operations in the industry, leading to a considerable growth.

“One of the key reasons being fronted for the proposed reforms is that the many agencies have exerted a lot of pressure on the government budget. This does not apply to IRA which delivers its mandate through an established strategic partnership with the private sector and in fact is 100 per cent funded by the industry players through annual contribution(s), says UIA’s Vice Chairman David Kuria.

“…UIA unanimously recognises and indeed supports government’s efforts to streamline institutions and agencies to enhance operational efficiency; we do however note that whereas the intention is noble, it will also undo all the progress made to ensure the systematic growth of the insurance industry,” other association’s leaders state.

Insurance supervision is governed on the basis of the Insurance Core Principles (ICPs) and ICP 2 particularly provides for the independence of a supervisor (IRA) to be operationally independent, accountable and transparent. It is in recognition of this and other global practices that even the current Insurance Act 2017 was amended, they say.

In a statement they say that compliance with the international best practices of regulation has made investment in insurance in Uganda very attractive even to very large international insurance groups and the proposed reform may be impact on our global competitiveness and subsequently on our Shareholders’ appetite in the local insurance industry.

“Fortunately for Uganda, the government of Uganda was well ahead of Insurance Act 2017 and made the provision for the establishment of the Insurance Regulatory of Uganda as early as 1996 to specifically nurture the growth of this industry,” adds UIA Chairman Allan Mafabi.

He says that as a result of that move, as well as the different initiatives taken on by the industry, the total premium written has increased to Shs728 billion in 2017 from Shs296 billion in 2011, signifying a 13 digit growth.

The independence of this Authority has allowed for a mode of supervision that has fewer ambiguities, less bureaucracies and is very supportive to the private sector business. Moving the industry to a Regulator whose key mandate does not explicitly relate to insurance even if that Regulator is the Bank of Uganda- whose key mandate is monetary policy- will stagnate if not retard our progress.”

Today, the IRA oversees the supervision of 29 Insurance Companies, 37 Brokers, 14 Bancassurance Agents, 28 Loss Assessors/Adjustors, five Health Membership Organisations, 1893 Agents and the National Reinsurance Company.

“Uganda presents an over 95 per cent market growth opportunity for insurance penetration and it is our expectation that as we implement different initiatives in partnership with our members, the different players and stakeholders, we should see penetration rise to 3 per cent by 2025. It is imperative that we do this in an environment that is sound and secure as has been ably demonstrated by the IRA,” says Paul Kavuma, UIA ‘s Chief Executive Officer.

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