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Protazio Sande Asst. Dir, Mkt Research and Dev’t

The Insurance Industry in the year 2013: Achievements, Challenges and Agenda for 2014 – The Regulator’s Perspective. Protazio Sande Asst. Dir, Mkt Research and Dev’t. Outline. Preamble Achievements Capacity and Growth Regulatory developments Supervision and Compliance Challenges

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Protazio Sande Asst. Dir, Mkt Research and Dev’t

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  1. The Insurance Industry in the year 2013: Achievements, Challenges and Agenda for 2014 – The Regulator’s Perspective Protazio Sande Asst. Dir, Mkt Research and Dev’t

  2. Outline • Preamble • Achievements • Capacity and Growth • Regulatory developments • Supervision and Compliance • Challenges • Agenda for 2014 • Conclusion

  3. Preamble • Companies have been resilient in the face of challenges ….industry expected to grow at a higher rate than in 2012 • Strides have been taken in a positive direction in the last 11 months by some companies • Opportunities to leverage our potential exist as we move into 2014

  4. Capacity and Growth • Innovations in products • Public Awareness • Technical Cooperation • Oil and Gas • Agricultural Insurance • Bancassurance • Research and Development • Participation in the regional activities • National Health Insurance Schemes

  5. Regulatory Initiatives • Pioneering the establishment of Policyholder Compensation Fund and the Insurance Appeals Tribunal • Streamlining the operations of the Complaints Bureau • Reviewed the Insurance Regulations, 2002 • Microinsurance Regulations • Merged the Insurance Act with the Amendment and a reprint is now available • HMOs: Interim guidelines for Licensing and supervision and Income & Expenditure Reporting format • Motor Third Party Act and Regulations

  6. Supervision and Compliance • Licensing • National Re-insurance company (Uganda Re) • 2013 licenses (22 Insurers, 07 HMOs, 30 Brokers, 18 Loss Assessors, 1027 Agents by end of October 2013) • Offsite Inspections • Onsite Inspections • Compliance with ICPs • Efforts to acquire RBS Software

  7. Challenges • Compliance (timeliness in submissions, data quality/legitimacy) • Market conduct issues (Undercutting; premium remittance; claims settlement…..) • Financial management issues (expense ratios…) • Public awareness/confidence-deficit • Slow pace of innovations (new products, simplified products and processes, markets etc)

  8. Challenges cont’d…….. • Gaps/ Restrictions in the Insurance Act • Enforcement of Workers Compensation Insurance • Macroeconomic challenges ranging from high lending rates, volatile Forex market, to high utility tariffs coupled with inflation and falling consumers’ real income.

  9. Opportunities • Strong growth: 6% forecast growth in economy 2014 • Strong growth in the service, construction and manufacturing sector • Increased investment in infrastructure dev't • More than average prospects for growth in agric • Increased commitment to economic integration in EAC • Renewed energies in Government commitment to poverty alleviation.... Microinsurance

  10. Agenda for 2014 • Separation of life and non-life companies • RBS (Financial issues, Governance issues, Organizational and internal controls); investment in software, skills… • Research into non-convention delivery channels • Compliance : Act, Regulations, Guidelines (significantly lower tolerance for customer detriment; more credible deterrence) • Market Conduct: Premium remittances, Unfair market practices, Claims settlement .. (Monitoring compliance to established standard)

  11. Agenda for 2014 cont’d………… • Engagement of relevant Authorities – NPA to come up with a National Risk Management Policy; URA for enforcement of Insurance on imports …. • Insurance of Government Assets –planned engagements • Big Qn for 2014: Keeping relevant in an ever changing environment – However good, you can do better • Managing and leveraging a paradigm shift to product and process simplicity • Tighter focus on the root causes of poor customer satisfaction/outcomes

  12. Conclusive notes • The success of the Insurance Industry will be a result of not only the promising momentum of the economy and the business environment in the country, but above all, of the capacity of the companies in this industry to permanently re-invent themselves. • Companies which anticipate and plan for change will create their own future. They will dare to innovate and believe in what is new.

  13. Conclusion notes cont’d • “…..Addressing the concerns of a Regulator is not the end, as something we put behind us. Rather it must be about putting our traditions behind us and beginning a transformation of how we operate that elevates clients interest, advances openness, spurs innovation, improves services and – most importantly - delivers value based on true relationships….” . Eliot Spitzer

  14. Thanks for your Keen attention Prosperous 2014

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