By KABONA ESIARA

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Uganda’s bancassurance premiums hit a record high of $22.2 million in the second quarter ending June 30, 2023, amid unending reports of fraud in the insurance industry scaring away would-be and old policyholders.

Bancassurance gross written premiums grew by 34.53 per cent from $16.5 million in the first three months ending March 31, largely driven by banks aggressively selling both the life and general insurance cover.

The insurance sector performance statistics which were published last month indicate insurance products grew.

Read: Prudential now Uganda’s largest life insurer

The industry gross written premiums reached Ush828.9 billion ($22.5 million) year-on-year in the twelve months ending June from Ush711.6 billion ($18.95 million) during the same period last year.

Bancassurance gross written premiums account for 31.1 per cent of the total premium underwritten during the period.

While bancassurance has shown strong growth, a statement from the Insurance Regulatory Authority (IRA) Chief Executive Kaddunabbi Ibrahim Lubega says brokers’ services remain critical in driving coverage in the market as they provide expert advice on risk management to clients.

“We shall continue to implore brokers to sell their value propositions to the consuming public to increase their share,” IRA adds.

However, insurance players fear insurance cover uptake which had picked, driven by subsidised costs government has been partly footing to help smallholders increase resilience against weather and climate-related shocks due to drought and extreme rainfall events is drying.

Under Uganda Agricultural Insurance Scheme the government has provided insurance coverage to 150,000 farmers.

A total of 15 suspected fraud cases were reported at the anti-fraud unit in 2022, across all segments. Forgeries lead the pack, closely followed by issuing false documents, suppression of premiums, operating insurance business without a license issuing false information, and leaking information.

Read: IMF tells Uganda to toughen war against money laundering 

“There is an urgent desperate need for an increased premium subsidisation allocation to accommodate the farmers on the cover. Current projections are for at least Ush15 billion annual increase in the allocation.

Medical insurance, which contributes about 20 per cent of the overall industry gross written premiums, has gained appeal for most organisations. While the cover contributes 95 per cent of all registered health insurance businesses, there is low enrollment from individual policyholders, largely due to costs.

A total of 15 suspected fraud cases were reported at the anti-fraud unit in 2022, across all segments. Forgeries lead the pack, closely followed by issuing false documents, suppression of premiums, operating insurance business without a license issuing false information, and leaking information.

“The fraud cases received in the period under review are worth Ush894.2 million ($238,453) from Ush11.23 billion ($3 million) in 2021 representing a significant reduction of about 92 per cent,” IRA wrote.