Julius Barigaba
14 July 2008
Nairobi — Barely one year in Uganda, Johannesburg-based multinational life insurance giant Liberty Life Assurance, last year wrote premiums worth over Ush2.5 billion ($1.42 million), just a couple of thousands less than top life premiums writers, Insurance Company of East Africa that raked in Ush2.51 billion ($1.43 million).
The firm's managing director Joseph Almeida told The EastAfrican that his company was riding on its strength in South Africa and other markets where it operates on the continent.
Prior to Liberty's entry in Uganda, life insurance business was dominated by the former parastatal National Insurance Corporation, Insurance Company of East Africa, Jubilee Insurance and East African Underwriters.
The trio however also had a strong hand in other general insurance business because generally life insurance business in Uganda commands a small low percentage of the insurance business.
Currently Liberty Life is the only firm operating in the market offering only life insurance business. The other 20 companies are heavily tilted towards non-life business. At least 14 companies DO NOT OFFER in life insurance, including market leader AIG Uganda, which wrote Ush22 billion ($12.5 million).
Mr Almeida said, "there are many Ugandans who are studying and working in South Africa, and this was a good starting point for the company.
He said the company hit the ground running mainly through its product innovation and service delivery - with a known reputation for settling claims on time.
Liberty's first year returns alone have boosted life businesses contribution in the industry. Data obtained from the regulator indicates that non-life premiums usually make a greater contribution every year, but last year, a percentage change of 44.1 per cent was recorded in life business, while only 21.6 per cent was recorded for non-life.
Another relatively new entrant, Microcare Insurance Company Uganda, providers of medical insurance also made great improvement last year.
The company started here only four years ago, but has since moved from the lower cadres of the sector to a commanding position, remaining slightly just outside the top five led by AIG, Jubilee, UAP, NIC, Goldstar Insurance and East African Underwriters.
Microcare's revenue grew a staggering 121.3 per cent from 2.9 billion ($1.6 million) to 6.5 billion ($3.7 million), a development the company's officials in Kampala attribute to its smart positioning.
"We have the expertise to offer this kind of service and we treat our clients differently. We offer people choice - our clients, for instance, use different hospitals depending on their range of income. At the end of the day, they realise that there is better customer satisfaction," said Annette Kategaya, the company's official.
A number of health management firms in Uganda offer such generic products but their undoing is the centralised referral centres that sometimes prove expensive. Ms Kategaya told The EastAfrican that a number of corporate organisations are already in Microcare's books and given the firm's specialised knowledge in medical insurance, this year could be better for the health insurer.
Industry players have noted that Microcare's quick rise has to do with its business and products - modelled along the same lines of micro-credit institutions.
Licensed only in 2004, Microcare has already plunged headfast into the informal sector, which partly explains its impressive returns last year.
The informal sector is perhaps the most promising market that has eluded big service providers, including the country's only social security provider, the National Social Security Fund.
But Microcare's model has "blended health care management of corporate bodies, combining health insurance products, management and administration of health care budgets, and the operation and management of in-house clinics and medical facilities," officials said.
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