By Patrick Kagenda
Samson Akinwale is the General Manager of the National Insurance Corporation (NIC). He talked to The Independent’s Patrick Kagenda about the performance of the insurance industry.
What are the challenges the insurance industry is facing?
As you are aware that insurance’s contribution to GDP continues to be low due to the hindrances that have persistently affected development, and stifled growth of the industry. These include shortage of professional manpower and the need for more product development and innovation to suit the changing market and effectively increase market penetration and catchment areas. Ugandan insurers are still reluctant to underwrite life business policy for reasons like HIV/AIDS.
There is a general low level of insurance awareness amongst both the insuring and would-be insured public. There is therefore need for continued sensitisation in order to bring such awareness and broaden the market. There are high levels of poverty in the country and low incomes of the majority of the prospective consumers, giving rise to inability to afford insurance due to non-possession of valuable insurable property.
How are you resolving these challenges?
Despite the above named challenges, NIC continues to promote insurance through the strong private sector-led growth of the economy by increasing public awareness of the products, benefits of the insurance services and product innovation through introduction of new products. NIC has sensitised the public on the value and role of insurance hence leading to an increased level of confidence in the insurance market.
How are you addressing the growing competition in the insurance sector?
Competition for the growing insurance market is healthy. It is with expertise, innovation and spirit of South-to-South trade that NIC will address the growing competition. This is the kind of value NIC wants to add to its shareholders.
You are embroiled in a disagreement with Makerere University over the Deposit Administration Plan (DAP). How were the terms of NIC contract with Makerere?
In June 1996 Makerere University and NIC put in place a Deposit Administration Plan scheme with an initial contribution of Shs1,167,625,416 ($583,812). NIC administered the DAP scheme till to date. In 2005 Makerere stopped remitting contributions to the scheme. The stoppage of contributions occurred barely one month after an international operator with strong financial capacity and proven competence in Life, Pension and Special Risks business, had won an openly and widely acknowledged transparent, international competitive bid for 60% equity in NIC. The privatisation programme was supervised by World Bank. The conditions of the DAP scheme are clearly stipulated in the terms of the Group Master Policy (GMP). The Group Master Policy (GMP) is the overriding contract that has been guiding the operation of the DAP scheme since 1996.
What is the exact amount that Makerere is entitled to under the DAP?
It is important to clarify one point. There is a continuous call on the Makerere account where each beneficiary has been paid and NIC has made regular payments. All figures are still subject to actuarial valuation and withdrawal penalties in case of immediate withdrawal and surrender value in line with the terms of the Group Master Policy. It is for that reason that the exact figure has to be verified by an independent actuary.
What has fuelled the animosity between NIC and Makerere?
Although disguised as an altruistic fight to safeguard the beneficiaries of the Makerere Deposit Administration Plan scheme, it is clear that the primary goal is to undermine and effectively sabotage the Privatisation programme by the government. This started in 2004 when NIC’s privatisation process was taking place. It is indeed regrettable that the opponents of Privatisation have continuously used NIC as a cannon- fodder for opposing a commendable and visionary initiatives of the government which ultimately will serve people’s interests.
What new thing is coming at NIC ?
NIC is mindful of emerging regional trading blocs. We are ahead of the competition and have acquired several interests in East Africa. NIC is strategising in order to place itself firmly in front elsewhere in Africa. The company’s business plan and strategy is a jealously guarded trade secret.
What is your style of management?
Managing an organisation requires a variety of motivational tools and techniques to motivate their employees in attempts to ensure they perform to the best of their abilities to meet the company’s objectives. To motivate is to change behaviour and one can change people’s behaviour, both as individuals and as a group or team using the “carrot and stick” approach. There are basically two ways; behaviour is changed by force or by choice through use of incentives. It is important to note that organisations and managers who have the knowledge and skills to motivate employees will always be a step ahead of their competitors.