Four years ago, the Global Entrepreneurship Monitor ranked Uganda as one of the most entrepreneurial countries in the world with 30% statistics of Ugandans starting a business annually. This rise in Uganda’s economy comes with a great need for financial security as these businesses are most likely not to last for any longer than a year due to political, social, economic, cultural, and environmental factors. That’s where insurance comes in to protect you from a loss.
The Ugandan insurance sector is regulated by the Insurance Regulatory Authority (IRA), established in 2017, which ensures fair, stable, and all-inclusive services within the insurance sector. The IRA issues licenses to insurance companies and protects policyholders' interests, while also ensuring transparency within the industry.
Understanding Insurance at Length for the Layman
One may wonder "What is insurance, why is it important, and how can I get insured?" Let’s explain it simply and understandably for a layman (Omuntu Wa’ Bulijo) as this is about Protection, a term that every person can understand. For instance, a woman selling vegetables in Owino, a gentleman carrying a bag of cement on a construction site in Kampala, a farmer in Luwero, and a Boda Boda man in Kampala can all understand what Protection means to them.
When we speak of insurance, we are addressing the societal norms that believe insurance is only for a chosen few people or as a layman might say "the rich" which is not the case. This article aims at breaking down the bias that most Ugandans hold over insurance.
The Importance of Insurance for the Layman
We believe that insurance is a basic human right, necessary for everyone, regardless of societal claimed class, age, and gender. Moreover, we see that the layman (Omuntu Wa ‘Bulijo) more than ever needs insurance and faces more risks when it comes to their property and personal lives. Take an instance of the fire outbreaks that have previously been registered in Uganda. For example, St Balikudembe, famously known as Owino's market, caught fire twice. This uncertainty caused tension, anger, and depression for traders who lost their merchandise worth billions of shillings. The same scenario was seen in Fort Portal Kabudaire market, Kisekka market in downtown Kampala, various fire outbreaks in schools, and not forgetting about the accidents happening in buildings in Kampala, injuring and killing many.
These few examples paint a great picture of the urgent need for awareness of why there is a dire need for insurance for the layman. We notice that Omuntu Wa ‘Bulijo is at great risk and should be at the forefront. When it comes to insurance coverage, we want to make insurance a fundamental right to all rather than the perceived "rich people" only.
Making Insurance Accessible
Making insurance accessible to the layman, leads us to the next question "How do we make insurance accessible to the layman (Omuntu Wa ‘Bulijo)"? With this Question in mind, let's start by defining insurance in the easiest way to a layman. Insurance can be defined as the protection of oneself against a risk that may be anticipated or unanticipated. Let’s add to that, protection against consequences that might affect one’s day-to-day livelihood, albeit business, health, life, or anything else.
To make insurance accessible to the layman (Omuntu Wa’ Bulijo), we need to:
- Sensitize and Inform: Close the knowledge gap by providing clear and accessible information about insurance policies, their benefits, and their suitability.
- Simplify Language: Use simple language to explain insurance terms and policies. Complicated terms and jargon can deter people from understanding and purchasing insurance.
- Proactive Outreach: Insurance providers should actively reach out to the layman instead of waiting for them to come forward. This approach ensures that those most at risk are aware of and can access insurance.
To make insurance accessible to the layman (Omuntu Wa ‘Bulijo), there is a need for sensitization, providing information, and closing the knowledge gap among the layman (Omuntu Wa ‘Bulijo). This is one of the key areas to increase the uptake of insurance as many of them don’t have the information necessary regarding what type of policy would be most suitable for them or the cost of an insurance policy. After all, they believe that insurance is only meant for the rich and well-educated individuals.
Furthermore, the complexity of insurance terms and language that is used to explain an insurance policy has made it difficult for the layman (Omuntu Wa ‘Bulijo) to take up insurance as most of them do not understand the insurance terms being used such as the clauses and excess, thus creating an important bias to the layman (Omuntu Wa ‘Bulijo).
There is a need for insurance companies to approach the layman instead of waiting for the layman to approach the insurance companies. Unfortunately, many insurance companies seem to concentrate more on corporations instead of individuals, therefore often forgetting about the layman (Omuntu Wa ‘Bulijo).
This brings us to our next questions "How does insurance work, what can be insured, and what steps should one take to acquire an insurance policy"? Insurance may seem hard to understand but is very important.
When addressing the question of how insurance works, we see that it involves one choosing coverage. One needs to make a selection of what needs to be insured. It is advisable to make this selection and compare costs from different insurance companies. One should consider details like costs of premium, reputation of claim settlement, and ease of communication. Once a conclusion has been made, one should submit their proposal and policy issuance and wait for approval.
What can be insured in Uganda?
You may wonder, "What can I insure"? The insurance market of Uganda offers a wide range of options you can choose to insure. For instance, Life Insurance (life insurance gives financial support to your loved ones in case of your death) and General Insurance (insurance that protects your valuables against uncertain events such as motor, property, and health insurance). Uganda’s insurance market furthermore offers specialized insurance, such as agriculture and cyber insurance. By getting this view and understanding these steps and available options, we see how easy and navigable insurance in Uganda can be.
There is a great need for simple and well-explained insurance knowledge, especially when it comes to the layman (Omuntu Wa Bulijo). This article laid out the various reasons why the layman seems to avoid insurance. We trust that this article helps call to action the different insurance bodies to extend their work to the layman (Omuntu Wa ‘Bulijo)!
Edgar Nathan Osiapil | Business Development Officer – Marketing & Business Development | Minet Uganda
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