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Banks to add 160 branches to provide bancaasurance
Mr Kaddunabbi (right) chats with some of the guests during the Inaugural Bancassurance Thought Leaders Forum in Kampala at the weekend. Photo / Courtesy
What you need to know:
- Bancassurance now contributes at least 9.9 percent to gross insurance sector written premiums
Insurance Regulatory Authority (IRA) says the number of bank branches offering bancassurance services will increase by 161 by 2026.
The increase will, therefore, raise the number of branches from 401 to 562.
Bancassurance, which is a collaboration between banks and insurance service providers to increase insurance uptake, was implemented seven years ago and has since grown to become one of the most influential innovations in the financial services market.
The service allows insurers to sell products to banking customers, which mutually rewards partner financial institutions through earning a commission on every sold policy.
Speaking at the Inaugural Bancassurance Thought Leaders Forum in Kampala at the weekend, Mr Ibrahim Lubega Kaddunabbi, the IRA chief executive officer, said bancassurance has steadily grown, providing a window through which banks and insurance companies can mutually benefit from a shared service.
“Currently there are 401 bank branches providing bancassurance. This number will grow to 562 bank branches by 2026,” he said, noting that in 2023, Shs179.5b worth of gross written premium was booked through bancassurance despite existing challenges in the regulatory landscape and knowledge gap.
Ms Martha Aheebwa, the Uganda Bankers’ Association bancassurance technical committee chairperson, said the first bancassurance license was issued in 2017, but 19 licenses have since been issued, thus supporting the growth of bancassurance gross written premium from Shs83.3b in 2020 to Shs179.5b, with bancassurance accounting for 9.9 percent of the gross insurance sector written premiums.
Ms Aheebwa further indicated that an IRA HR Study indicates that bancassurance employs 426, noting that the Inaugural Bancassurance Forum presents a good opportunity for stakeholders to take stock of the contribution of bancassurance to the sector growth including challenges and successes.
Dr Tumubweinee Twinemanzi, the Bank of Uganda executive director for supervision, said bancassurance provides diversification of income for banks and supports them in providing proactive services.
