The insurance industry is being let down by some of its staff, many of whom do not clearly understand the kind of products they are selling to the public, a top industry official has said.
Protazio Sande Ndoleriire, IRA's assistant director for Market Research and Development, says the way insurance products are being sold points to a big problem.
"How we sell insurance policies shows evidence of a confidence crisis among sales agents, who are unable to explain what they are selling," Ndoleriire said at a monthly breakfast meeting organized by the Insurance Regulatory Authority (IRA).
Drawing on a recent survey he conducted, he narrates how he came across a sales agent in Mbarara who could not distinguish between comprehensive motor vehicle insurance from third party cover.
"When we asked him what claims the third party policy covered, he answered that every type of car accident would be covered," Ndoleriire said.
He said this ignorance was at the heart of the crisis in the sector: "That is why most customers believe that insurance doesn't pay, because if [accident] claims are not honoured yet one has paid third party, the disgruntled clients will complain louder than the satisfied ones."
Uganda's insurance coverage is stuck at 0.6% compared to Kenya's at 4%.
Ndoleriire challenged the sector to design creative products that their clients will appreciate, including looking at unconventional sectors.
"We have ignored agricultural loans and left them to banks and microfinance institutions when we should be at the forefront in promoting them," he said.
Sometimes, Ndoleriire complained, the paperwork is unnecessarily too much: "Some of you also suffer from a document syndrome - always asking for this [document] and that when people are making a claim, which drives away potential customers."
Ndoleriire challenged insurers to target their policies at the average customer. "Many of your policies are too complicated to be understood, on top of being too full of details. Some people think they [insurance policies] are a trap," he added.
Ndoleriire was also concerned that several insurance firms are based in Kampala and largely out of touch with the rest of the country. "Somebody buys a product and settles in Kanungu and when they need to make a claim, they have to keep coming to Kampala to settle it. Is that even cost-effective?" he asked,
Not too late
However, Ndoleriire assured the insurance sector that his survey indicated that it was not too late for players to make inroads into the market.
"Surprisingly, most people have heard about insurance but have not felt it. So, you [could] start by doing business with people you know and trust," he said.
Ndoleriire insists that if the industry players were to up their communication abilities, more people would find insurance attractive.
"Why would anyone ignore a sector that will give them an opportunity to think about growth, without worrying about loss, especially if they have the confidence of their insurer?" he asked.