As part of its strategy to expand its reach in Africa’s life market, South Africa’s second-largest insurer, Sanlam, has launched a life insurance business in Uganda. Though Sanlam has operations in eight other African countries outside its home market, the Ugandan unit, Sanlam Life Insurance Limited, is the first to carry its brand name.
Commenting on the move into Uganda, Sanlam’s CEO Johan van Zyl said the decision was prompted by the scope for growth in the country’s life insurance industry.
“Currently life insurance contributes less than one% to GDP,” said van Zyl. “However, a number of factors such as the projected economic growth of 3% to 5% in 2009 and 2010, the recent discovery of oil fields and Uganda’s developing democracy mean that the need for a well-insured population is increasing rapidly.”
The Ugandan unit forms part of Sanlam Developing Markets (SDM) provides financial solutions to the entry-level market in South Africa, all market segments in other African countries where Sanlam operates and India where the insurer is a partner in a joint venture, Shriram Life.
Marguerite de Waal, who heads the Ugandan unit, said building of a distribution network for the company’s products was already underway and the intention was to create a wide network of agents.
“Initially, we will provide a credit life offering in association with banking partners and other credit providers which will later be extended to include other financial services and solutions,” said de Waal.
She added that Sanlam will offer solutions relevant to the 80% of Uganda’s workforce that is engaged in the agricultural industry.
In Uganda Sanlam joins another South Africa insurer, Liberty Life, which launched the country’s first pure life insurer in August 2007. There are now 21 insurers in Uganda, six of which are composite insurers, according to the Uganda Insurance Association (UIA).
The most recent data available from the UAI is for 2006. This reflects life insurance premium income of $3m which gave a penetration rate of 0.03% of GDP totalling $10.2bn. General insurance premium income in 2006 was $52m.