Ugandan insurance sector 'has to rely on overseas reinsurers'
The Ugandan insurance sector is losing out on billions of shillings every year because the country has no indigenous reinsurance firm.This is according to technical manager of the Uganda Insurers Association David Tumuhaise, who told the Daily Monitor companies have to turn to overseas reinsurers for the service.
Reinsurance gives insurance firms protection against having to pay out large sums in the event of a natural disaster or other catastrophe, but using foreign companies means money is not being reinvested in the local economy and does not contribute to the nation's growth.
Speaking to the news source, Mr Tumuhaise said in excess of 40 billion Ugandan shillings (€14.05 million) was lost in 2008 because domestic insurance firms are putting revenue "on a silver plate" for reinsurers.
"We are losing a lot of money from the economy year after year yet reinsurance firms don't offer any direct services to Uganda," he stated.
Business Daily recently noted East African nations have a range of differing insurance laws, meaning it is not possible for policyholders to get transnational cover across countries such as Uganda, Kenya, Tanzania, Rwanda and Burundi.