Insurers have no fitting products for informal market, report says
Mr Joseph Lutwama (R), the Financial Deepening Uganda programmes director, looks on as Ms Jonan Kisakye (L), the Uganda Insurers Association chief executive officer and other officials, display documents during the launch of research findings in Kampala recently. Photo | Stephen Otage
What you need to know:
The report found that potential customers in the informal sector do not like the way insurance agents approach them
A report on why the informal sector does not buy insurance despite constituting the largest chunk of the economy, shows that there is no communication between insurers and the low income earners.
While releasing the findings of the study, Joseph Lutwama the programmes director Financial Deepening Uganda, said they partnered with Makerere University Business School and Uganda Insurers Association to undertake research to understand the risks and challenges that market vendors face when doing business and how insurance can mitigate them.
“Market vendors who represent the informal sector, do not know about insurance and the insurance industry is yet to see the value of that market segment. They do not have appropriate products for that market and yet 65 percent of the business is in the informal sector but, few people understand that industry,” he said.
Financial Deepening Uganda, Mr Lutwama said, had engaged MUBS to generate knowledge for insurance companies to design appropriate products for the informal sector market because they are critical in driving innovations and product development.
The informal sector, he said, has complex challenges, which insurance companies need to understand.
Mr Protazio Sande, the Uganda Insurance Authority director planning research and development, said the informal sector constitutes the largest population but insurance has not designed products to penetrate this market.
