Why poor people need insurance more than the rich
Mr Rogers Rubongoya Managing Director Minerva Re / Grand Re (L) Mr Saul Sseremba, the Principal of Insurance Training College in Kampala(C) and Mr David Tumuhaise, Resident Underwriter, African Reassurance Cooperation(R)interact after addressing journalists in Kampala on October 21, 2024. Photo/Jane Nafula
What you need to know:
- On the issue of digitalizing insurance industry, Mr Tumuhaise said it is the way to go to ease interactions between the insurance and clients but also check fraud.
When you talk about insurance, what runs through the minds of many Ugandans, is an imaginary image of a wealthy person, cushioning his property or the health of his family members.
However, a section of experts in insurance industry have argued that the poor need insurance services more than the rich, saying the former can rarely withstand the effects of economic shocks on their own, given their vulnerable economic muscle.
“I have always told people that the poor need insurance more than the wealthy because one catastrophe can wipe out the entire income of a poor person which is not the case with the rich person with a firm diversified financial foundation,” said Mr Saul Sseremba, the Principal of Insurance Training College in Kampala while briefing journalists about the 5th international insurance conference slated for October 23 to 25, 2024 on Monday.
The conference that will be graced by the Omukama (king) of Tooro, Oyo Nyimba Kabamba will be held in Fort Portal under the theme: “The Digital Agenda, What next for the Insurance Industry”. Over 200 participants are expected to attend the conference, including the keynote speaker Moses Mukundi, CEO and founder Eden Care, a renowned digital insurer in Africa.
Mr Sseremba explained that if a truck of a rich person who owns a fleet of trucks and a string of several other businesses is involved in an accident, the impact will not be huge on him given the fact the has other sources of income.
“But just imagine this boda-boda guy who has one motorcycle and he is even still paying back the loan and he is involved in an accident yet this motorcycle is the only source of livelihood for him and the family. Basically, the family has nothing to survive on,” he explained.
He asserted that products in insurance companies target all stakeholders and there are several micro insurance products that target low income earners.
“Insurance is a risk management option. Look at the agricultural insurance that is targeting farmers, look at school fees products that companies sell these days, even this person in the rural area has children that go to school,” he said.
Mr David Tumuhaise, resident underwriter, African Reassurance Cooperation concurred with Mr Sseremba, saying those who are financially challenged are often one risk away from extinction and need to be supported to manage risks.
On the issue of digitalizing insurance industry, Mr Tumuhaise said it is the way to go to ease interactions between the insurance and clients but also check fraud.
Mr Sseremba said, “One of the key challenges we have in the insurance sector is the issue of managing our costs and expenses, but also reaching out to the clients in a way that is convenient to them.
When we embrace technology, then we can even reach out to clients without spending money to get to them. I think one of the key success factors of micro insurance is digitization”.
Mr Sseremba added, “When you look at the premiums collected, and then we are spending more in order for us to get the client, then we are not in business.”
