Insurance association eyes marine deals for local companies

Insurance association eyes marine deals for local companies

Kampala, Uganda | JULIUS BUSINGE  | The Uganda Insurance Association (UIA) is sensitising importers of goods about marine insurance in a bid to complement efforts by the regulator –Insurance Regulatory Authority – in creating awareness and appreciation of the local purchase of this policy.

This move is targeting different groups including; Uganda Shippers Council, Uganda Clearing and forwarders Association, Uganda Chamber of Commerce, Uganda Small Scale Industries Association, and Kampala City Traders’ Association (KACITA) as well as other groups such as car importers, manufacturers, Printers, Freight Forwarders and Haulage operators.

The sensitization covers the insurance policy options, the benefits of purchasing the insurance policy locally, as well as the claims process in case of loss or damage of cargo.

According to the UIA Head of Public Relations and Advocacy, Faith Ekudu, through these efforts, Ugandan importers will start to appreciate that purchasing insurance from a local insurer is cheaper and gives buyers more control over the types and levels of insurance purchased.

The most obvious benefit, according to Ekudu however, is that it is easier to engage an insurance company in Uganda as opposed to one in another country.

Also, she adds that with local marine purchase, a trader will be able to reduce the importation costs and the anxiety related to loss and damage.

Ekudu says it is essential for businesses engaging in international trade; especially those shipping large quantities of goods by sea to take up marine insurance policies while at the same time follow up with insurance companies.

She says that with a representative or agent of any local insurance company and, or perhaps with the help of a good insurance broker, cargo can be insured for a single shipment or multiple shipments over a specific time frame.

“Most policies will provide coverage for the cargo’s value as well as other charges based on the payment that would have been received if the cargo were to reach its destination,” Ekudu says.

Section 3(2) of the Insurance Act of Uganda states that no person, other than a person licensed as an insurer under this Act, shall issue any insurance policy on ‘goods imported from other countries except personal effects and donations’.

This provision, according to Ekudu, means that, if any Ugandan importer chooses to insure their imports, they have to do with a Ugandan insurance company.

Government of Uganda through the Ministry of Finance Planning and Economic Development made a key pronouncement in the FY2017/18 aimed at empowering locally licensed insurance companies to issue all policies relating to domestic marine cargo insurance effective July1, 2017.

The Insurance Regulatory Authority would administratively enforce and implement the provisions in the Insurance Act.

However, the implementation is yet to take effect and because of this, the country continues to lose millions of dollars that go to foreign insurance companies for goods destined to Uganda.

UIA officials are optimistic that once its sensitisation campaign on this product gain momentum, going forward, it will contribute to growth in insurance penetration in the country – that has been muted at 1% for years.

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