Uganda insurance regulator targets Muslims with new product to deepen penetration
Insurance regulator is mulling introducing Islamic insurance to Muslims in Uganda who are barred from conventional insurance with a view to roping in more people to the industry which still has dismal penetration.
Insurance Regulatory Authority chief executive officer Ibrahim Lubega opined that the regulator’s decision to consider takaful, Islamic insurance, will diversify uptake and lead to improved service delivery.
“We are concerned that a reasonable number of Muslims are not interested in the conventional banking and insurance; now that the Central Bank opened up for Islamic banking we plan to follow suit and work on the process of ensuring we begin Islamic Insurance,” he said.
The Insurance Institute of Uganda chairman governing council, Mr Ronald Zaake, said the Institute is in the process of developing capacity in continuously training human resource to cope with the changing job demands of the insurance industry profession.
“Islamic Insurance will add value to the industry, as the Institute, we shall ensure that we broaden our training scope in line with the changes in the industry,” he said.
In contrast with the conventional insurance where companies sell policies and invest the proceeds from premiums for the profit of its owners who are not necessarily policy holders, Islamic Insurance is founded on a mutual co-operative principle where all contributors of the premiums are shareholders such that in case of risks against a given member, compensation is paid out from the pool such that the risk is spread and shared between members.
