The Insurance Sector already saw two mergers of acquisitions in the recent past in liberty and East African Underwriters and the recent Lion Insurance in Sanlam. This was only but a start and more consolidations might be inevitable. “It’s the wave across the world there are changing regulation to risk-based supervision. Now, risk-based supervision, most of these small companies trust me they do not exist so they will be forced either to sell or they liquidate.” Said Allan Mafabi – CEO Britam Insurance Uganda.

The Insurance Sector which slowed down significantly last year with general insurance contracting got some reprieve from an unlikely place the government. “Naturally the volumes went down but buying large the government’s investment in infrastructure has helped the industry grow. We expect as Britam to post a growth of 15% this year, as a market we would be hard pressed to 10%.” The government can assist more through policy and enforcement of existing laws to grow premiums. “Instead of the Ugandan importer buying dollars here to go and pay for insurance out there, when they suffer a loss they are not sure of which insurance in China covered them. Now we are saying that once you enforce this purchase with URA and Ministry of Finance whilst help our businessmen. That’s number one, number two; I talked about a cover for workers. The law is in place and not every employee is covered. So work with the Ministry of Labor to ensure that every employee is covered just in case anything happens, the cover will work.”

However, the taxation on the sector raised the cost of premiums and slowed down penetration. “You are insuring a motorcycle somewhere, a premium for the third party is 4,000 stamp duty is 35,000 taxes are 35,000. Taxes are 7 times the principle on which the tax is based. I guess it is the only one in the world where the tax is like 700% of the principle it’s strange. But we are telling the government look, that’s why these boda-bodas don’t have the third party and many cars don’t and in the process, the social cost for the government is bigger.” Britam clawed to number three in the industry helped by its balance sheet which enabled sizeable underwritings plus what the CEO claimed was a fast delivery of claims and flexibilities that were lacking elsewhere in the industry.