Government to establish re-insurance firm

The government has finally okayed the establishment of a national re-insurance company, which is expected to lead to the reduction of insurance costs and save the country from massive capital flight starting next year.

The Minister of State for Investment, Mr Aston Kajara, said the cabinet has approved the setting up of the company that the insurance commission and insurance firms have for over the past 15 years.

UG1The minister was speaking at the official launch of Apollo & Pan African (APA) Insurance, a new insurance firm and one of the leading general insurers in Kenya at the Serena Conference Centre last week.

“By not having a national re-insurance company, almost half of the premium - money collected by insurance firms to cover anticipated costs of life and business losses - was going  out of the economy,” Ms Evelyn Nkalubo the Acting Commissioner of Insurance in Uganda said. “When you look at 2008, the premium was Shs167 billion out of which Shs67 billion was taken out of the country.”

The Chief Executive Officer of the Uganda Insurance Association Mr Olli-Pekka Ruuskanen told Daily Monitor that for ordinary Ugandans and businesses, a national re-insurance company would lead to a reduction in the cost of insurance especially that of high risk covers offered by local firms.

“If you have a local re-insurance company, it knows the market and it can say that this risk should be priced lower. So, the actual consumer benefits by lower insurance premium,” Mr Ruuskanen said in an exclusive interview. “If you don’t have a local one, it’s the foreign companies that decide. They come to Uganda and just say it is so risky. So they charge a lot for re-insurance.”

 

 
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APA Insurance | Government to establish re-insurance firm

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