Kampala — Health related insurance, which in the past has not been fancied by both service providers and customers, has shown signs of growing if new statics released by industry players are to go by.

A sector performance report on insurance released by Insurance Regulatory Authority (UIA) showed that AAR Health Services collected the highest revenue figures last year after it earned USh25.5bn. It was followed by IAA Limited Ush18.7bn, Kadic at Ush2.3bn, Case Medicare at Ush1.5bn and International Health Network at Ush1.6bn among other service providers. These figures represent a 22% performance improvement recorded by Health Management Organizations (HMOs) that insurance cover against health related risks in the year 2012.

"During the period under review, the total revenue collected by HMOs increased from Ush40.88bn during the year 2011 to Ush49.83bn in 2012 indicating a growth rate of 22%," the IRA report reads. It adds "The incurred claims (medical treatment costs) increased from Ush37.58bn in 2011 to Ush45.77bn in 2012 resulting in high loss ratios during the years 2011 and 2012 i.e at 91.93% and 91.68% respectively."

The same report notes that the management expenses increased quite significantly resulting in an increase in management expense ratios from 12.15% during 1011 up to 210.68% in 2012.

The regulatory body advised that there is need for HMOs to expeditiously put in place mechanisms that are aimed at cost control. It observes that the high management expense ratios affect

profitability of an entity and ultimately the long term financial strength of an entity.

"The Authority will consider putting in place a provision for expense caps in the law so as to enable insurers and HMOs manage their businesses more prudently," the regulatory body reveals in the report. Commenting on the firms performance, Trevor Ariho, the public relations officer at AAR hinted that the growth is likely to continue considering that the firm is on an expansion drive.

"It comes as no surprise therefore that we continue to see the nature of growth that we are seeing in the sector," Ariho said.

Ariho says regular visits to clients and prospective clients to know what they want, their locations, the drugs they want is a business model they use to cultivate a good relationship with the public

consequently earning them significant revenue growth. "There are challenges, which we are working tooth and nail to work out right, from hiring the right people to administer the kind of care

that we believe in, down to improving the look and feel of our facilities," Ariho added.

As a result of the amendment of the Insurance Act, Health Management Organizations (HMOs) were brought under the preview of the insurance regulatory Authority.