South Africa-based insurance company, Metropolitan & Momentum International (MMI Holdings Limited) has entered the Ugandan insurance market with its subsidiary Metropolitan Life Uganda Ltd, targeting low income earners with micro-insurance products.
Peter Semakula, the company’s representative in Kampala told The Independent that the micro-insurer is already operational in the country.
While he remained cagey on the products being offered, sources familiar with the company, said it is rolling out a Send with Care health insurance product in partnership with MTN Uganda, allowing mobile money users to purchase insurance cover every time they send money to their beneficiaries. It is also known for offering funeral and retirement insurance products.
MMI Holdings partnered with MTN Group last year to increase market access of both companies and provide a strong basis to compete in a changing mobile financial services industry.
Ibrahim Kaddunabi Lubega, the chief executive officer at the Insurance Regulatory Authority of Uganda confirmed to The Independent that the South Africa insurance company, which also has operations in 13 other countries around the globe including Kenya, Tanzania, Ghana, Lesotho, Mauritius, Namibia, Nigeria, UK, and South Africa was given a nod to open operations in Kampala effective this year.
“The Insurance Act 2011 provides for the regulation of micro insurance companies. From the time the Act was amended, we had not got a company licensed specifically to provide micro insurance products,” Kaddunabi said. ” Metropolitan Life Uganda, is coming in to provide specialized life micro insurance products.”
He said the demand for micro-insurance products has been growing over the time and hence the need for an insurance company that specifically provides such products.
The entry of MMI in Uganda’s insurance industry brings the number of companies offering life insurance products to nine, giving customers a wide range of insurance companies to choose from in their purchase of various insurance products.
Listed on the Johannesburg Stock Exchange, the South African underwriter, set aside R500million (US$ 36.95million) in 2015 to fund for acquisition and expansions in newer African markets. In 2015, the company acquired a 75 % stake in Kenya’s Cannon Assurance at R300 million (US$22.2million) converting it into a subsidiary in the region as it seeks for further expansion on the continent.
Kaddunabi said the new development comes at the time the regulator is trying to boost the uptake of insurance whose penetration has remained low in the east African region.
Latest data from IRA shows that Uganda’s insurance penetration stands at merely 0.86% compared with 1% in Rwanda, 2.3% in Tanzania and 3.2% in Kenya even as insurance premiums continue to surge.
But the sector has since 2013 been growing. Premiums have risen from Shs 463billion to Shs 502.65billion in 2014 and Shs 611.13billion in 2015 mainly due to local insurance’s participation in the on-going infrastructural projects and improvement in the economy.
Life insurance premiums have grown from Shs55.4billion to Shs74billion and Shs99.8billion during the same period. Liberty Life Assurance Company commands the class’ market share with 35.1% compared with 18.8% for UAP and ICEA with 18%. Prudential, CIC and Britam have less than 1% each market share.
Last year, Britam insurance unveiled a micro-insurance product dubbed U-Insured to protect its subscriber’s in the unfortunate event that they break a bone(s) in partnership with Uganda Telecom, in addition to its existing products to grow its market share.
Similarly, Lion Assurance unveiled Maisha Boda Insurance, targeting boda boda cyclists in partnership with Tugende, a profit -for- social enterprise in 2014.
As at the end of last year, Uganda had 29 insurance companies (Non-Life and life) and 11 Health Membership Organizations.
A study released last year dubbed The East African Financial Systems: Optimal Regional Integration’ says that insurance penetration in the region is still low compared with the Africa average that stands at 3.5%, signaling more opportunities for investors in the industry.
The study conducted by Paul Mugerwa, a scholar and CEO of Asante Capital Hub Ltd also states that the future of the insurance industry in the country is bright with the planned roll out of ban assurance, national health insurance scheme, implementation of various infrastructural projects including Standard Gauge Railway and the development of the oil sector.
MMI Holdings was formed in 2010 when Metropolitan Holdings and Momentum Group, two insurance and financial services companies in South Africa, merged their operations. Prior to the merger the two companies maintained a significant presence in the South African financial services.
The company registered a 16% fall in earnings to R3.2 billion (US$236.5million) for the year ending June 2016 citing lower underwriting profits and muted investment markets in their countries of operations. Source: All Africa