As Uganda’s insurance industry becomes more competitive, only firms that are sufficiently prepared will survive.
In the latest development, Sanlam insurance has finalized plans to take over NIKO Uganda and has now rebranded to Sanlam General Insurance. Sanlam is a South African-based financial services group.
Sanlam is member of Sanlam Group, a South African financial services company with assets under management of more than $65.83bn, nearly thrice the size of Uganda’s economy.
The group’s business has expanded and diversified over many years. Sanlam closed a deal to acquire a 50.3 per cent stake in NIKO Uganda as part of a deal that saw it acquire a 49 per cent stake in NIKO Group’s insurance business in Uganda, Malawi, Tanzania and Zambia.
NIKO insurance books of accounts have been in the red for the second year in row as the company registered a net loss of sh1.7bn in 2013 and a subsequent Ugx.1.03bn net loss in 2014.
Speaking at news conference at Sheraton Hotel recently, Gary Corbit, the Chief Executive Officer Sanlam General Insurance, said the rebranding is a fundamental change and that Ugandans should only expect better and innovative products.
Ian Kirk, the Group Chief Executive Officer pointed out that the company is set to roll out specialized insurance services which are still lacking in this country in the next 12 months.
These specialized services include aviation and marine, corporate risks properties liability and crop insurance in next few months.
“We look forward to using this opportunity to strengthen our business relationship with our clients, partners and associates and to further entrench the Sanlam way of doing business to a wider range of clients’’ he said.
Kirk noted that the Sanlam Group is opportunistic about Ugandan economy and they are ready to give all the support they need to realize their objective of growing business.
In a separate interview carried on Newz.com, Kirk pointed out that Sanlaam has so far invested close to 200mn South African Rand in the NIKO deal. He added that the Group is optimistic of recovering their investment in Uganda because the country has had good economic discipline over the last couple of years.
Putting the Sanlam deal into context
According to the 2014 Insurance Regulatory Authority (IRA) report, the total industry asset base rose to sh915bn from sh754bn the year before. The industry realized a gross written premium of sh663bn up from sh495.9bn in 2013, representing 6.9 per cent growth.
Net claims incurred for both life and Non-Life insurance increased by 10.7 per cent to sh101.3bn in 2014 from sh85.5bn the year before. Over 65% of market is commanded by four players-Jubilee, UAP, AIG and Liberty Life Assurance and Lion Assurance.
The Uganda Insurers Association (UIA) report for 2014 ranks its members by market share as percentage of premium. Uganda has 29 licensed life and general insurance companies and 29 licensed insurance brokers.
The report reveals that in life insurance, Jubilee insurance tops with 19.20%, UAP insurance follows with 15.71%, AIG Uganda 9.38%, Liberty Life Assurance 5.88% and Lion Assurance with 5.13%. From the bottom, Nova Insurance holds 0.26%, Leads 0.55%, PAX 0.76%, NIC General 1.90%, and First Insurance 0.93%. In Non-Life/General insurance category, Jubilee insurance leads with 23%, followed by UAP Insurance with 19%, AIG Uganda with 11.16% and Lion Assurance with 6.10% in that order. In this category, from the bottom, NOVA Insurance trails with 0.31%, Rio Insurance 0.42%, Leads 0.65%.