Local insurance firms are concerned that some of the woes facing the industry are escalating because the Insurance Regulatory Authority (IRA) lacks capacity to execute its mandate.
Charles Mboowa, the AIG insurance agency representative, said the Government ought to narrow the funding gap to enable IRA build human capital to govern the industry.
The industry operates under numerous challenges like; limited public awareness about the industry and increased flouting of the laws by some operators at the cost of the law abiding companies.
Mboowa noted on the sidelines of the AIG staff party to mark the transition from Chartis Insurance back to AIG, a new brand under which the company started trading effective October, that many local enterprises were insuring risks in other countries, yet IRA has rules prohibiting such acts if the risks can be insured locally.
This is compounded by rampant premium undercutting.
"However, we remain optimistic that if IRA is financially empowered to have enough human resource to operate, the challenges we are facing can be surmounted and Uganda's struggling industry may be elevated," he said.
"It is true IRA needs more funding. However, this is not only peculiar to IRA. It is common to all government departments. However, with added mandate and the need to create awareness on insurance, we are engaging the Government to increase our funding," said the IRA spokesperson Mariam Nalunkuuma.
With a 0.65% penetration rate, Uganda lags behind other East African states like; Rwanda at 2.3%, Kenya of 2.76%, and Tanzania at 2.2%.
Commenting on the company rebranding, the AIG Uganda managing director, Alex Wanjohi appealed to his team to continue elevating the company's basic core values of impressive customer care to maintain the global standards.
He said AIG Uganda was increasingly winning overwhelming public confidence exhibited by the company's registration of a premium income worth sh41b in 2011 against an industry record claims payout of sh35b in 2011.