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DTB wants Bank Agents to sell insurance

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DTB Uganda MD, Thambi says Bancassurance can do better with bank agents

Kampala, Uganda | THE INDEPENDENT | Bankers want bank agents to be allowed to conduct Bancassurance business on behalf of the financial institutions to enhance access to the services by the public. Diamond Trust Bank, named Most Innovative Bancassurance Agent 2022, says there is a need to further take services closure to the people if more Ugandans are going to be able to take on Insurance.

A 2016 amendment of the Financial Institutions Act allowed regulated financial institutions to conduct Bancassurance, acting as agents of insurance companies, to sell insurance products to the public. This platform now accounts for almost 10 percent (142.7 billion Shillings in 2022) of the gross written premium, while about Shillings 11 billion of this went through DTB Uganda, according to Varghese Thambi, the bank’s Managing Director.

Thambi said if the more than 30,000 bank agents countrywide were allowed to be outlets of insurance products, it would be an added incentive for the public to embrace the services.

Speaking at the launch of the Bancassurance partnership between DTB and UAP Old Mutual Insurance Uganda in Kampala, Thambi said that currently, insurance penetration remains low because, among other things, it is not close enough to the public. For this, the sector heavily relies on compulsory or forceful insurance, especially the Motor 3rd Party Policy and loan insurance, yet all products, life, and non-life, should be taken as compulsory by all, according to Thambi.

The partnership with UAP Old Mutual will deliver general and medical insurance products and services, including Motor Comprehensive Insurance, Medical Insurance, Travel Insurance, and Domestic packages for homes among others. This is in the end, expected to enhance the partner companies’ quest to drive insurance deepening and inclusion, with products tailored to customer-centric needs hence the variation of premiums based on coverage.

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On the Partnership Agreement, Thambi said the collaboration marks a milestone in DTB’s commitment to addressing the evolving needs of its clientele and improving their financial well-being. Douglas Baguma, Head of Bancassurance at DTBU was upbeat that the partnership would increase their presence in the insurance industry, adding that more people should now have a reason to acquire insurance at the one-stop point.

Last year, according to figures at IRA, Bancassurance generated premiums worth 179 billion shillings, representing a growth of 26 percent from the 2022 performance and an overall contribution of 11.2 percent to total industry premiums in 2023.  This shows the potential of the platform as a major player in growing insurance penetration and is expected to continue growing, according to IRA Chief Executive Officer, Ibrahim Kaddunabbi Lubega.

Caroline Owomuhangi, Marketing and Communications Specialist at UAP Old Mutual said the partnership represented an opportunity for clients to grow their economic activities and stability.

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