The Insurance Regulatory Authority (IRA) in Uganda is confident all composite insurance companies (insurance firms offering both general and life insurance) will beat the September deadline to separate business as required by the law.
The process of separating composite insurance companies was introduced by the Insurance (Amendment) Act, 2011, it also provides for the regulation of insurance sector. The separation will be a requirement before companies are allocated licenses to do business in the country in 2015.
The move will go a long way in promoting life insurance in the country which has the lowest insurance penetration and is struggling to grow the insurance sector.
“All companies are on schedule. They have shown us their progress and everything should be concluded by September.” IRA’s Managing Director, Hajji Kadunabi Lubega told Eat African Business Week.
Uganda has 22 insurance companies, six composite companies, (Britam, ICEA, Goldstar, Jubilee, NIC and UAP) must adhere to the new rule of the game.
Already UAP Insurance has formed a separate company handling life insurance business called UAP Life Assurance Uganda where it has transferred all its life related business. UAP Life Assurance Uganda Limited will have common shareholding with UAP and shall continue to operate the same Life Insurance business.
In an interview last year, James Ndegwa the Chairman of Insurance Company of East Africa (ICEA) explained that the firm was well positioned to beat the 2014 deadline.
“We are certain we will do it before the deadline. It a good thing, it will enable the company to expand,” Ndegwa explained.
A few months down the road the company is ready to effect the mandatory requirement according to Chief Executive Officer John Karionji who believes the separation of business will create more jobs and efficiency in service delivery.
Steven Wandera, Regional Director Insurance at British-American Insurance (BRITAM) in an interview said separation of business is good for the industry as it increase capital, better use of technology and better services which later translates into profits.
Source : East African Business Week