Kampala- Following the amendment of the Financial Institutions Act 2016 to allow banks engage in insurance services, the Insurance Regulatory Authority (IRA) has so far issued licences to six banks granting them permission to sell insurance products.
Speaking at the award of the sixth licence to Diamond Trust Bank at their offices on Thursday, Mr Ibrahim Lubega Kadunnabbi, the chief executive officer IRA, said they were in the process of assessing the suitability of other banks which had applied for licences.
Lisenced so far
Diamond Trust Bank now joins Stanbic Bank, Barclays Bank, NC Bank, Bank of Africa and Finance Trust Bank as the first banks in Uganda that can now freely offer insurance policies to their customers and the public through Bancassurance.
“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 Kadunnabbi said.
According to Financial Institutions Act 2016, IRA is responsible for receiving applications from financial institutions for licensing to conduct Bancassurance business, subject to prior written authorisation from the Central Bank.
Mr Kadunnabbi said with the addition of banks selling insurance, the coverage is posed to increase from the current less than 1 per cent.
He noted that all banks venturing into insurance services must adhere to the “set rules”.
Mr Varghese Thambi, the managing director Diamond Trust Bank Uganda, reiterated Mr Kadunnabbi’s remarks, noting that the development will speed up insurance reach given the new opportunity presented with the inclusion of banks.
“It is 99 per cent an opportunity for us since the insurance penetration is still very low. There is less number of outlets in the insurance sector and we have opened up windows through our 38 branches across the country,” Mr Thambi said.
Mr Thambi added that the bank will carry out free training on the importance of insurance to its customers from their respective branches.