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.