UBA joins the list of banks licensed to sell insurance
The United Bank for Africa(UBA) has become the latest financial institution licensed by the Insurance Regulatory Authority to sell insurance products in the country.
Recently, the Financial Institutions Act 2016 was amended to allow banks engage in insurance services by issuing them with bancassurance agents licences.
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Speaking at the function to award the licence to UBA at IRA headquarters in Kampala on Tuesday, Insurance Regulatory Authority’s acting director in charge of operations, Bernard Obel said the move to allow banks deal in insurance products will help increase penetration levels of insurance among the public.
“There will be increased distribution channels and penetration among Ugandans and as such, the cost of insurance will lower for Ugandans to benefit,”Obel said on Tuesday.
The official from the Insurance Regulatory Authority argued that in the past it has been a bit difficult for insurance companies to set up in all parts of the country but noted that they will benefit with the coming on board of banks which have many facilities across the country.
According to Joseph Balikuddembe, UBA’s Executive Director in charge of Business, the bank will now come in handy as an agent who will help link clients to the insurance companies.
“We shall be going as agents and insurance companies will be paying commission to us .The lowest commission will be 10 percent whereas the highest will be at 20 percent,”Balikuddembe said.
“By offering insurance services as a bank, we will have eased access for customers and eventually increase insurance penetration in the country.”
Officials from the Insurance Regulatory Authority put the average growth rate of the insurance industry at approximately 19.2percent in the past 10 years.
Eight banks have so far been licenced by the Insurance Regulatory Authority to transact and offer insurance services to the general public.
Financial institutions are expected to apply to IRA for licences to do bancassurance business and this is subject to authorization from the Central Bank.
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