Kampala, Uganda | JULIUS BUSINGE | Phoenix of Uganda Assurance Company Ltd recently rebranded to Mauritius Union Assurance Company Limited (MAU). The company’s MD, Latimer Kagimu Mukasa spoke to The Independent’s Julius Businge about this development and related sector issues.
What is your general assessment of Uganda’s insurance sector as we speak?
Insurance penetration is very low though there’s growth especially in areas of medical and life insurance. We as MAU, are in general insurance which could be doing better. We feel that with more public awareness, the sector will do better. There’s a good opportunity and we feel that it will continue to grow. Premiums underwritten has increased from Shs296bn in 2011 to Shs728bn in 2017. The increase in premiums could be as a result of infrastructure projects in a certain year which is good for the industry. However, we need to build growth that is not a one-off. We need individuals to take up insurance for their homes, lives, education packages.
What are the reasons behind your rebranding exercise and how will it impact your business?
Our majority owners were Mauritius Union Financial Services Group based in Mauritius. Within the group, there were several businesses which were operating in different names. For instance, the general insurance business was under Mauritius Union Assurance, the life insurance Mauritius was under another company. There was Phoenix in Uganda, Kenya, Tz and Rwanda), which was majority owned by Mauritius Union. There is also a small company called Phoenix Insurance in Mauritius which has nothing to do with Mauritius Union. Then there is Phoenix Assurance in Southern Africa (Namibia, Swaziland and Zambia). There was therefore confusion that needed to be addressed and the solution was to bring all businesses under one brand. This rebranding makes us bigger, better and stronger. As we grow we can tap into skills in Mauritius and in other countries. We will benefit from economies of scale in areas of reinsurance and actuarial support. We are doing brand building so that our clients familiarise with our new name.
How has your business impacted Uganda’s economy – in terms of jobs, taxes and related opportunities since 2004 when you started?
Our gross written premiums have increased from Shs14bn in 2016 to Shs16.3bn in 2017. We are targeting Shs20bn this year. Our plan is to grow our business by 57% by 2020. We are therefore striving to have a good strong distribution network –brokers, our own internal business development team and the licensed agents. We have also opened distribution outlets, among others, in Malaba, Mutukula and Kayunga. We want to be visible and sell products to our clients. We need to build capacity in areas like aviation insurance as we continue to be strong on our core area of business – motor insurance. In terms of job creation, we are 32 employees up from three people who started the business. There are other jobs that we have created indirectly to agents and loss assessors.
What’s your stand on the idea of risk based supervision being mooted by the regulator?
We welcome risk based supervision. It is a global practice these days and all mature markets have gone this direction. This practice means that the number of risks that you take on has got to be matched over and above by the capital that you have in the business. We are comfortable with this and we are waiting for the regulations. In fact, when we look at issues like solvency ratio where the regulator wants us to be and where we are now…we are at around 463% which is substantially higher than what the regulator is looking for. This means we have strength to settle claims. Over the years, the business has grown well –financially strong and careful on risks we undertake.
How are you dealing with the challenges that you are facing as a business?
Our industry is still small owed to low awareness. Also, whenever the economy is bad, our clients do not prioritize taking up insurance. As individual companies and the insurance association, we are trying to educate the public on insurance. Claims payment is now at about 95%. Of course, not all reported claims are payable because some fall outside the terms and conditions of the policy. We have engaged with government in regards to marine insurance and the laws have been passed where all dealers in imports and exports must purchase insurance locally here – the problem is enforcement of the law.
What other areas do you think will drive the sector’s growth going forward?
There is an oil and gas pool where we are participating as well and we all contributed money to take on risks in the sector. When activities increase, it will support the insurance sector to grow. Infrastructure and other development projects are good for insurance although they are usually one-offs. I think we need to focus on things like agriculture which are consistent and are here to stay. We need to make insurance a way of life for the people of Uganda. The regulator is projecting 3% penetration rate up from the current 1% by 2025, and, I think is achievable.
How you do normally ran your organization as a CEO?
I ran an open door policy. I delegate quite a bit and ensure everybody is trained in their areas of work.