Overview:
Kasaija said that hosting this company in Uganda will increase the insurance and reinsurance uptake in the country, create employment and further build Ugandans' capacity in the insurance business.
Finance Minister Matia Kasaija together with Minister of State for Foreign Affairs Okello Oryem have signed the Host Agreement between the government of Uganda and ZEP-RE (PTA Reinsurance Company) that will see the latter extend its operations in Uganda.
Hope Murera, the Managing Director and CEO of ZEP-RE, signed on behalf of the company.
Kasaija said that hosting this company in Uganda will increase the insurance and reinsurance uptake in the country, create employment and further build Ugandans’ capacity in the insurance business.
“We hope that ZEP-RE shall support the ongoing initiatives like agricultural insurance, support Uganda’s credit rating, de-risk the financial sector, and provide technical capacity, among other services,” he said on Wednesday in Kampala.
ZEP-RE (PTA Reinsurance Company) is an institution of the Common Market for Eastern and Southern Africa (COMESA). It has offices in 9 countries – Kenya, Uganda, Sudan, Zambia, Zimbabwe, Ethiopia, Coted’Ivoire, DRC, and Rwanda.
However, the new entrant will have to contend with Uganda’s insurance market which is underdeveloped, and hindered by low incomes in the market, compared to her neighbours such as Kenya and Rwanda. For instance, Uganda’s insurance penetration improved by 0.08% from 0.796% in 2021 to 0.876% in 2022.
The principal reasons for this are a limited understanding of insurance and its benefits and a very low level of trust amongst the public. A significant reason for the lack of trust is the very low claims ratios, particularly for statutory third party motor claims.
Although service levels have improved over the last few years, they are generally considered to be low. Consumer education and market awareness campaigns are widely considered to have strong potential. However, they are likely to fail or be ineffective unless trust can be restored. This in turn requires higher claims ratios, faster claim payment times and improved service standards. These should be the first priority.