Kenyan cooperative insurer makes bold move in Uganda

Yasin Nnume, the chairperson of CIC Africa Uganda Ltd says while the firm is seeking capital to further its expansion, it will also help cooperative societies across the country to access insurance products starting with insuring loans and personal insurance products.

The company also seeks to extend various products such as cover for movable and immovable property, and cash in transit/in till, fire and burglary, agriculture and livestock life, and old age protection through cooperative movements.

“Previously, the cooperatives were insured by private non-cooperative insurance companies, both foreign and local. Whereas the SACCOs were insured as entities, a majority of the members could not have individual specific insurance schemes that would benefit them,” Nnume says.

He said that insurance structure is demotivating to the saccos as companies are not addressing specific needs of the sector and the Sacco’s do not have further gains from companies beyond cover.

He says CIC does not intend to list on USE or any other securities exchange after the offer of the shares to the cooperatives but it will provide an exit strategy to shareholders should they opt to sell their shares in future.

CMA’s approval

CMA Chief Executive Officer, Keith Kalyegira told The Independent that the Authority received the company’s final prospectus on Oct. 13 and granted approval following the fulfillment of the prospectus requirements stipulated in the CMA Act as amended.

He reiterated that the company’s shares will not be listed on any stock exchange once the offer has closed and will only be transferred in line with the company’s Articles of Association, which may be obtained at the company’s registered offices or at the Registrar General’s office.

He advises the targeted group of investors to read the prospectus and ensure they consult with licensed investment advisors before participating in the offer.

Ibrahim Kaddunabi Lubega, the chief executive officer of the Insurance Regulatory Authority of Uganda (IRA-U) says CIC share offer will boost insurance penetration especially with the promotion of micro and agriculture insurance products.

Uganda has the lowest insurance penetration in East Africa. 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.

As at the end of last year, Uganda had 29 insurance companies (Non-Life and life) and 11 Health Membership Organisations.

Last year, the UK-based business law firm, Debevoise and Plipton released a report titled ‘Africa Insurance M&A Global Insurers’ Next Frontier’ which noted that despite its infancy, the insurance business in Sub Saharan Africa offer opportunities and is expected to grow between 4.2% and 5% by 2017.

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editor@independent.co.ug