Commercial banks in Uganda can now offer insurance services to their clients, Ibrahim Kadunabbi Lubega, the chief executive officer of the Insurance Regulatory Authority (IRA) has revealed. In a briefing to the media at his office last week, Lubega said that IRA hoped that this would enhance the growth of the insurance sector in Uganda. IRA shall issue bancassurance licenses to banks to enable them to offer such a service.
The first license has been given to Stanbic Bank.
“Bancassurance in its simplest form is the distribution of insurance products through a bank’s branch network. It allows insurers to rapidly widen their reach by tapping into an established banking network and client base. It is through such partnerships that the insurance industry can grow and increase its penetration in Uganda,” Mr Lubega said.
There are several providers of insurance services in the country. The entry of banks into the sector will tighten competition for an industry that already has several players. Accordingly, banks can attract more clients to such services by converting their existing clients to accept insurance products that they are offer.
Notably, banks are also well positioned to assess the risks that insurance is supposed to cover, given their business in offering credit.
