Assessing the readiness of taking up life assurance business in Uganda
Akena, Joshua Nyero
MetadataShow full item record
The study was conducted in Kampala to assess why there is limited uptake of life assurance in Uganda using a mixed research. Key informant interviews were purposively selected from eight life assurance companies while questionnaires were administered to obtain quantitative data where random sampling was employed and a sample of 76 respondents selected. The findings of the study showed that there has been more growth in life assurance compared to general insurance over the last ten years. The growth in life assurance is seen in retail business however general business is stagnant and most of the businesses keep switching between insurers. It was observed that there was a general increase in the number of consumers buying life assurance policies and most bought educational products. On average, it was noted that 76,013 individual life products were sold in 2017.Despite the growth of the insurance sector, penetration in Uganda is still low at less than 1%. Further quantitative analysis revealed that there is a relationship between the purchase of life assurance and factors such as disposable income, premium cost, claims settlement, occupation, gender and age of the respondent however there was no relationship between the marital status and the purchase of life assurance. It was observed that married people mainly focus on fending for their children hence would consider buying life assurance while the single populace is relatively young; erratic in decision making and live for the moment hence many may not consider buying life assurance as a priority. The insurance companies should also lower the cost of premiums, have efficient claims settlement, improve on customer service, have product variety, have country wide presence to improve the penetration of insurance in Uganda. In addition, insurers will need to develop products that are market segmented. Therefore, diversification in product development to suit the different tailor-made gender, marital status, needs of the populace is recommendable. The concept of insurance is still a complicated concept to understand. There is still need to increase awareness of insurance knowledge to the public. The insurance bodies such as the regulator, associations, training institutes and the various companies should invest in public awareness as a necessity. The insurance sector’s contribution to Gross Domestic Product of 1% with a market penetration of 0.85% is still below 1% signifying low operation standards according to the international best insurance practice guidelines. The findings of the study will provide more knowledge in life assurance to practitioners, researchers and policy makers.