Insurance penetration in Uganda remains low at one percent, but products such as bancassurance are steadily improving public perception of the benefits of being insured and Stanbic Bank maintains a leading position in the market.
Bancassurance is a partnership that allows commercial banks to offer insurance products to their customers, making it easier for them to access these services and helping to increase the reach of insurance companies across the country.
Buying insurance is a way to manage your risk against unexpected financial losses. The Financial Institutions Amendment Act, 2016 provides for the introduction of bancassurance in Uganda, with the Insurance Regulatory Authority (IRA) acting as overseer. Stanbic was one of the first banks to launch its services in 2017.
According to IRA, the insurance industry generated gross written premiums (GWP) of UGX 1.4 trillion in 2022, of which the bancassurance share of premiums was UGX 143 billion, compared to the 2021 figure of UGX 103 billion.
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Year-on-year, the bancassurance segment has grown by 38%, representing a 9.9% contribution to the industry’s total premiums in 2022.
IRA figures also showed that Stanbic ranked first with a market share of 19.38%, after generating total GWPs of UGX 27.6 billion, with General Insurance taking UGX 9.5 billion, while Life Insurance took UGX 18 .1 billion booked.
Absa Bank Uganda came second with a total GWP of UGX 25.9 billion and a market share of 18.22%, while Centenary Bank ranked third with a GWP of UGX 25.7 billion and a market share of 18.04%.
According to Dogo Singh, the Principal Insurance Officer of Stanbic Bank, innovation, staff retention and technical capacity building are key to ensuring that bancassurance is effective in serving customers and improving customer satisfaction.
He said innovation is essential in developing new products and services that meet the changing needs of customers. Retaining staff is crucial to ensuring that the bank has experienced and knowledgeable employees who can provide excellent customer service. Singh said technical capacity building is also essential to ensure staff have the necessary skills and knowledge to provide quality insurance services.
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In non-life insurance, Stanbic generated 13,403 stand-alone policies against an industry total of 25,646 policies, which was the highest, and approximately 167,000 life insurance policies.
Through bancassurance, Stanbic Bank has been able to offer its customers a wide range of insurance products, including car insurance and home insurance. The bank has also invested in technology to improve its services, such as the introduction of mobile insurance services that allow customers to purchase and manage their insurance policies via their smartphones.
Makonese Tich, Head of Insurance East Africa, attributes the rapid growth of Stanbic’s bancassurance services to the strong focus on customer insights, working with the bank structure and also cooperating and following the guidelines of the regulator to operate within the framework of the insurance law to stay.
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He said banks like Stanbic are working to improve their insurance services and increase customer satisfaction through innovation, staff retention and technical capacity building.
However, more public awareness is needed to highlight the benefits of being insured.
In a related development, Stanbic Bank Uganda was selected second runner-up as Uganda’s Most Innovative Bancassurance Agent at the annual Insurance Regulatory Authority (IRA) awards recently held in Kampala.
The award recognizes the bank’s contribution to promoting financial inclusion and protection through their unique individual medical product called Stanbic MediProtect.