By Justine Namara
The insurance Regulatory Authority (IRA) has issued a bancassurance licence to Diamond Trust Bank (DTB). This was at a ceremony that took place 0n Thursday at the IRA headquarters in Nakasero. The insurance license means that the bank can now start offering insurance products to the public.
Bancassurance, is a relationship between a bank and an insurance company, aimed at offering insurance products or insurance benefits to the bank's customers. DTB has partnered with Jubilee Insurance to offer products to their customers. The bank received the certificate on 28th December 2017.
Bancassurance takes effect in Uganda following the passing of the Financial Institutions Amendment Bill 2016 into law which provides for bancassurance.
According to Financial Institutions Act 2016, IRA is responsible for receiving applications from financial institutions for licensing to conduct bancassurance business, subject however to prior written authorisation from the Central Bank.
Handing over the license to DTB, Alhaj Ibrahim Kaddunabbi Lubega, the Chief Executive Officer at IRA said that Bancassurance will help to increase insurance penetration in Uganda.
“This partnership will surely serve the public. There are two benefits; serving the people and earning from the service,” Kaddunabbi said. He however noted that all banks venturing into insurance services must adhere to the “set rules”.
On his part, the Managing Director at Diamond Trust Bank Uganda Varghese Thambi reiterated Kaddunabbi’s remarks, noting that the development will speed up insurance penetration from the current 0.8%. He also added that their aim is to make a change in the insurance sector and ensure maximum awareness as far as insurance products are concerned.
“It is 99% an opportunity for us since the insurance penetration is still very low. There is less number of outlets in the insurance sector and we have opened up windows through our 38 branches across the country,” Thambi said.
He added that the bank will carry out free training on the importance of insurance to its customers from their respective branches.
IRA says that about 6 banks including Barclays, Stanbic, NC and Bank of Africa among others have already received certificates to sell insurance products.