Kampala — A South African financial services group, Sanlam, has launched a life insurance firm in Uganda, the second of its kind in the country.
Speaking at the launch in Kampala, Mr Johan Van Zyl, the group chief executive said the decision to open business in Uganda was prompted by the scope of growth in the country's life insurance industry.
The move follows the group's expansion initiatives in Africa, where the company sees excellent untapped potential for insurance business development.
Sanlam group, which offers a range of financial solutions to entry-level market in South Africa and all market segments in other African countries where it operates, will kick-off with credit life offering in Uganda and later extend to include other financial services.
A life insurance policy provides security to family members upon the loss of a loved one by assisting the surviving family members in overcoming the burden of the tragic loss.
Uganda has over 25 insurance companies with a penetration rate of only 0.6 per cent but has only one pure Life Insurance Company-Liberty life.
The industry contributes less than one per cent to the country's Gross Domestic Product.
South Africa, where Sanlam has its headquarters has a penetration rate of at least 16 per cent.
Sanlam operates in Namibia, Tanzania, Nigeria, Botswana, Kenya, Ghana, Tanzania, Zambia, Uganda and will soon open in Malawi. It also operates in India and Australia.
Mr Van Zyl said the discovery of oil in Uganda and the political stability calls for increased need for a well-insured population and that a long-term savings and protection industry is key to a successful democracy as it facilitates the transfer of wealth from generation to generation.
In his remark, the State Minister for investments, Mr Aston Kajara, called upon the insurance sector to emulate the banking industry by extending insurance services to the untapped rural population.
He said new players should join the Uganda Insurance Commission and FinLit foundation to sensitise the public about the role of insurance to their lives, businesses and promote financial literacy.
"We hope that Sanlam will play a role in ensuring that people appreciate the role of insurance in their lives and the economy," Mr Kajara said.
Mr Van Zyl said Sanlam will ensure that the importance of life insurance in a healthy economy is highlighted in the country.
He said the company will focus strongly on training and supporting individuals and organisations.