For many decades, Uganda's insurers and reinsurers never imagined that they could cash in on marine cargo insurance business amid the large volume of business involved in international trade.
This is due to the fact that importers, for unknown reasons, insured their cargo on transit via sea, air or land, with foreign insurers, denying domestic insurers millions of dollars, and hurting their growth.
ADVERTISEMENT
As such importers effective July1, 2022, will be required by law to have a local Marine Cargo Insurance Policy for all incoming cargo.
ADVERTISEMENT
Marine cargo insurance is a policy that protects one from financial strain that could arise from damage or loss to your cargo during transit from the place of origin to its final destination.
The commissioner Customs at Uganda Revenue Authority(URA), Abel Kagumire, explained that local marine cargo insurance means that importers shall not enter into a contract of insurance with an offshore insurer in respect of goods being imported into the country, other than personal effects.
ADVERTISEMENT
This, he said, is in accordance with Section 9 (3) of the Insurance Act which aims at making sure that all imported goods are insured locally.
From the tax authority perspective, he explained that the tax body will require importers to use domestic insurers for marine insurance and will be one of the preconditions for cargo/goods clearance.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
"Primarily, Ugandan importers use major international commercial terms for sale/purchase of goods for exports where importers freely enter into agreements with offshore or local insurers that they desire. But with the directive effective 1st July, 2022, all Marine Cargo Insurance will be procured locally," he said.
The policy will help local marine cargo insurance in resolving the challenges such as difficulties that manifest in the form of underwriting, policy wording and the technical aspect of dealing with offshore insurers.
"The law intends to protect the Ugandan importers. Although in most cases they cover their goods with offshore insurers, but the arrangement is that most of the importers do not even know the offshore insurers and there is a clear limitation and difficulty in filing for claims if there's an eventuality and, in most cases, importers do not even know the extent of coverage making it difficult for importers to get the desired results from the filing of claims," he said.
The chief executive officer at Uganda Insurers Association, Jonan Kisakye told the Nile Post that this portal being a product of a consortium of all marine cargo insurers means that for every policy taken out, they all get a fair share of the premium cake.
"We are directly supporting our local insurers who pay taxes to URA. We are effectively supporting Buy Uganda, Build Uganda. Since digital is the way to go, an importer's life is simplified. They can simply go to the portal to get a marine cargo insurance policy conveniently and quickly," he said.
