Africa Business Communities
AIG insurance exits Uganda market in an operations review strategy

AIG insurance exits Uganda market in an operations review strategy

Insurance company AIG has exited the Ugandan market following what it attributed to a review of its strategy to create simplified organization that positions them to achieve their global strategy based on capabilities and market opportunities.

 “After careful consideration and in depth review AIG will stop offering insurance products in the general market in Uganda. Our existing clients will continue to receive full administration and claims support for the remaining period of their policies. We will remind our clients of this change at the appropriate time prior to expiration of their policy,” reads the statement issued by AIG Insurance.

Mr Ibrahim Kadunabbi Lubega, the chief executive officer Insurance Regulatory Authority, said he is aware that AIG is exiting the country as a result of their desire to reduce their presence in various economies. It is not only in Uganda that they are closing their operations but they are also doing the same in other countries.

“To us as the Insurance Regulatory Authority (IRA), we wouldn’t have wished it to happen but we are comforted that even when it happens, the businesses will still remain with us because the businesses are being passed on to other companies. We do not have a direct loss as Uganda because it is just one investor who is pulling out but other people are increasing their investment and their capacity to underwrite the risk is available,” Mr Lubega said. 

However, an investigation conducted by this newspaper reveals that some employees have already been given letters notifying them of termination of their contracts which will expire by December 2016. Some employees, speaking on condition of anonymity, said the insurance company, in the letter, said they would receive their severance pay and their employment would be terminated by end of the year.

Data from IRA indicates that gross claims for both life and non-life insurance (including health membership organisations) rose from $53 million in 2014 to $62 million in 2015, representing a growth of 16.08 per cent.

This excludes the outstanding claims and those that will emerge from the long-term policies.  According to the 2016 IRA preliminary report, the insurance industry gross premium underwritten slightly increased from $145 million in 2014 to $176 million in 2015, representing a compound growth of 21.58 per cent.

www.aig.co.ug

 

Share this article