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AIG taps on Lydia Kayonde to lead their return to Ugandan market

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New AIG Insurance Managing Director, Lydia Kayonde. She is a seasoned insurance executive with over 15 years experience, most of them at AIG

American International Group (AIG) has tapped on seasoned insurance executive, Lydia Kayonde to lead their re-entry into the Ugandan market, CEO East Africa Magazine has learnt.

The Insurance Regulatory Authority’s Chief Executive Officer, Ibrahim Kaddunabbi Lubega, was quoted by The Independent magazine in December 2018, confirming that AIG Uganda Ltd, had been issued a green-field insurance investment.

Before its exit late 2016, AIG had operated in Uganda since 1962. It, in the wake of the 2008 financial crisis and subsequent federal bailout of the mother company, was rebranded to Chartis Insurance in 2009, but reverted to AIG in 2012.

Before its exit, AIG had gradually lost its market leadership position to Jubilee Insurance and UAP Insurance (now UAP), with UGX31.9 billion premiums in 2016 and a market share of 7.10% compared to its heydays in 2013 when it underwrote UGX50.1 billion in non-life premiums and UGX29.9 billion in life premiums.

Lydia Kayonde, then Head of Bancassurance at Stanbic Bank, at their 2017 launch of bancassurance services. She has been instrumental in earning Stanbic the leadership position in bancassurance with over 50% market share in the first full year of bancassurance.

In 2014, when IRA stopped issuing licenses to composed insurance companies and ordered for the split of life and non-life business, AIG dropped its life insurance arm. Their industry market share and business continued declining till their eventual exit in 2016.

Their headquarter building was sold to Britam Insurance for an undisclosed amount.

However, even in their last days- AIG remained one of the most respected and trusted brands in the business, especially in claims settlement.

Who is Lydia Kayonde?

Lydia Kayonde, is no stranger in both the AIG and insurance corridors. For nearly 10 years, she was the Manager-Liabilities & Financial Lines at both AIG and Chartis before she was tapped by Stanbic Bank to head their newly established bancassurance unit.

Stanbic was the first bank to receive a bancassurance license in October 2017.

Other than leading Stanbic to being the first bancassurance agent, Kayonde has been instrumental in shaping Stanbic as the industry leader in bancassurance.

Stanbic, according to the IRA 2018 annual report, collected UGX9.9 billion in premiums, out of the industry’s UGX19.7 billion non-life premiums- earning a UGX50.22% market share, well ahead of Barclays Bank and dfcu Bank, their closest rivals, who collected UGX5.1 billion and UGX1.5 billion translating into 26.1% and 7.6% market share respectively.

Stanbic also led in non-life premiums collections – having collected UGX1.8 billion in premiums- of the total UGX6.3 billion industry premiums, translating to a 27.9 market share.

Positive 2019 outlook

AIG is yet to officially comment about their return to the Ugandan market, but is believed to be driven by the growth in infrastructure spending by especially government and oil and gas companies- all of which herald positive industry projections.


Left-Right: Insurance Consortium for Oil and Gas (ICOG), Chairman and Goldstar Insurance Managing Director, Azim Tharani, Peter Muliisa Chief Legal and Corporate Affairs Officer of the Uganda National Oil Company (UNOC) and Hon. Dr. Elly Karuhanga the Uganda Chamber of Mines and Petroleum chairman at the announcement of the $200 million oil & gas insurance fund. Oil & gas related infrastructure investments are expected to boost the local insurance sector

Government infrastructure investments, reached 8.9 percent of GDP in FY17/18 and is envisaged to increase further this year and next, according to the IMF Uganda Country Report, May 2019.

Uganda is transitioning from the oil exploration stage to development and production stages; industry estimates say this stage will take up to 5 years and will cost up to USD20 billion. Uganda has also opened a second licensing round for five oil and gas exploration blocks in the Albertine Graben.

14 insurance companies in Uganda, under their Insurance Consortium for Oil and Gas (ICOG) have raised over $200m (sh745b) aggregated insurance capacity in readiness for Uganda’s oil and gas industry.

The insurance industry in Uganda underwrote UGX856 billion (USD227.8 million) in 2018- that is UGX73.60 billion (USD19.6 million) more than the Shs782.4 billion (208.2 million) underwritten in 2017. This is a 17.5% growth rate, compared to a 14.75% growth rate registered in 2017.

IRA Q1, 2019 reports show that industry premiums grew 9.1%, from UGX260.5 billion in Q1, 2018 to 284.1 billion, on the back of a 30.7% growth in life premiums- from UGX48.5 billion to UGX63.4 billion. Non-life business grew by 4.1% from UGX190.8 billion to UGX198.5 billion while Health Membership Organisations (HMOs) grew by 4.4% from UGX21.2 billion to UGX22.1 billion.

IRA’s Kadunabbi in a recent 23rd May 2019 industry presentation also expressed optimism that the industry would maintain this positive trend in 2019, on the back of upcoming projects like the Standard Gauge Railway, the USD3.5 billion East African Crude Oil Pipeline (EACOP), Uganda Airlines and the UGX470 billion CCTV cameras project in metropolitan Kampala.

He also said that growth in bancassurance as a channel as well the increased uptake of micro-insurance facilitated by mobile money platforms spelt growth news for the sector. Kadunabbi is also betting on recent industry engagements with Uganda Revenue Authority to enforce Section 9(3) of the Insurance Act so as to stop the millions of dollars being haemorrhaged out of the country in marine and cargo insurance.

Section 9(3) of the Insurance Act, dictates that, “all local risks and persons including imports shall be insured by insurance companies licensed to carryout insurance business in Uganda.”  

According to Bank of Uganda Balance of Payments report, USD67.5 million (UGX254.2 billion) left the country in 2018 for insurance- this is equivalent to 30% of the entire Ugandan insurance industry.

Kenya, under their revised insurance laws in 2017 localised all marine cargo insurance business, with some penalties for errant parties and in just one year, alone, grew marine premiums by 37%- from KES2.6 billion (UGX96.6 billion) to KES3.6 billion (UGX132.2 billion).

By comparison, Uganda underwrote UGX33.5 billion under the marine/aviation category in 2017.

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Kwame Ejalu’s Kent Holdings, acquires Alexander Forbes’ Ugandan unit; rebrands to Zamara

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Zamara Group’s logo; now the new face of Alexander Forbes Uganda, who have rebranded into Zamara Uganda

Alexander Forbes Financial Services Uganda Limited is now Zamara Actuaries, Administrators and Consultants (U) Limited.

This follows the ongoing exit of the South African financial services group from Uganda and the sale of their 51% stake in Uganda to Kent Holdings Limited- a Ugandan financial services group with interests in insurance brokerage and pensions management.

The two companies affirmed the sale, in a joint statement on August 21st, by Bonga Mokoena the Alexander Forbes Emerging Markets (AFEM) Chief Executive Officer and Kwame Ejalu, the Kent Holdings Limited Chairman.

Kwame Ejalu, the Kent Holdings Limited Chairman wields a rich experience in Uganda’s financial services industry. The Kent/Zamara partnership blends Kent Holdings’ 22 years of local experience and strategic leadership with Zamara’s 23-year African heritage and technical capacity

“Alexander Forbes Emerging Markets (AFEM) and Kent Holdings are pleased to announce that an agreement has been reached on a sale of shares to Kent Holdings Limited. On 2 July 2019, a sale of shares agreement was executed in terms of which, AFEM sold 51% in Alexander Forbes Financial Services Uganda Limited, to Kent Holdings Limited, a co-shareholder in Alexander Forbes Financial Services Uganda Limited,” read the statement.

Kent Holdings, previously owned 49% of the Ugandan operations.  

The statement however said that “the sale of shares agreement is subject to fulfilment of conditions precedent.”

“The terms and conditions of the sale agreement remain confidential,” both executives announced, but confirmed that Alexander Forbes has effected a name change and will now be known as Zamara Actuaries Administrators and Consultants (Uganda) Limited.

The name change was gazetted on 17th July 2019.

“Alexander Forbes Financial Services (Uganda) Limited, has been by a special resolution passed on 10th July 2019 and with the approval of the registrar of companies changed its name to Zamara Actuaries Administrators and Consultants Limited- 17th July 2019,” reads General Notice No. 762 of 2019, extracted from the Gazette.

Miriam Ekirapa Musaali, the Zamara Uganda Chief Operating Officer. She possesses over 11 years in Uganda’s capital markets industry- where she rose to the Director Market Supervision role at Uganda’s capital markets regulator – Capital Markets Authority, from whence she became the Alexander Forbes Uganda (Now Zamara Uganda) COO and Head of Business for slightly for slightly over 2 years. She says, the name change shall not in any way impede the quality of service as the team remains the same “enthusiastic, energetic, creative” team.

In a separate announcement, media announcement run in the local dailies, Zamara also confirmed their entry into the Ugandan market, promising that they called “fresh perspective in the delivery of financial services in Africa.”

Who is Zamara?

According to their media announcement, the Zamara Group is a specialised financial services group providing actuarial advice and retirement administration solutions in financial services, umbrella retirement solutions, investment and risk sectors to individuals, corporates, parastatals and retirement fund clients. 

The firm currently administers assets in excess of KSh. 280 billion an equivalent of UGX 9.995 trillion and is the only actuarial, consulting, accounting and pension administration firm in Kenya to be ISO 9001:2015 certified.

Zamara Group Executive Director , James Olubayi

Uganda is the sixth Zamara operation after Kenya, Nigeria, Rwanda, Tanzania and Malawi. Zamara started operations in Kenya over 23 years ago as Hymans Robertson and later changed to Alexander Forbes (East Africa) Limited before renaming to Zamara Actuaries, Administrators and Consultants Limited, following the exit of Alexander Forbes from the Kenyan market in 2017.

For four consecutive years, Zamara, their umbrella fund, the Zamara Fanaka Retirement Fund (formerly Alexander Forbes Retirement Fund) and Zamara Vuna Pension Plan (formerly Alexander Forbes Vuna Pension Plan), Zamara’s individual pension plan have been variously awarded in Kenya’s Think Business Awards.  

A brand that embodies a fresh perspective on the delivery of financial services

Commenting on the entry of Zamara into Uganda, Kwame Ejalu, the Kent Holdings Chairman said: “We are enthusiastic about this partnership between Kent Holdings and Zamara Group as it marks the entry into Uganda, of a formidable brand that embodies a fresh perspective on the delivery of financial services in Africa. This partnership blends Kent Holdings’ 22 years of local experience and strategic leadership with Zamara’s 23-year African heritage and technical capacity, to deliver innovative and excellent services to our clients, underpinned by simplicity, empathy and trust,” adding: “Zamara Uganda will now add to our portfolio pan-African expertise, actuarial services and other online solutions that we previously did not offer.”

Asked if Zamara had acquired the stake, previously held by Alexander Forbes, he said he would comment on this after “the Alexander Forbes-Kent Holdings transaction is fully complete and all conditions precedent are fulfilled.”

Ejalu however said that Zamara Uganda inherits and will continue to run a managed private pension funds sector in Uganda and managed assets under administration portfolio in excess of UGX380 billion- roughtly 40% sector market share.

James Olubayi, the Zamara Group Executive Director said that the Zamara Group looked at Uganda as “one of the key strategic regions in the market for growth of the group.”

“Zamara aims to elevate the quality of advice and solutions offered to stakeholders and inevitably be a game changer for clients it serves in Uganda. We look forward to the extended partnership with Kent Holdings, clients, stakeholders across Africa,” he said.

Miriam Ekirapa Musaali, Chief Operating Officer, Zamara Uganda who previously was the Alexander Forbes COO said “We remain the same enthusiastic, energetic, creative team that is committed to serving our clients in Uganda. We will no doubt continue to offer superior consulting, advisory and administration services to pension funds in Uganda and further enhance our offering and advice to truly world class levels.”  

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Finance

Stanbic Bank scoops June/July best gov’t securities dealer award

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The Governor Prof. Emmanuel Tumusiime-Mutebile has given an award to Stanbic Bank Uganda (LTD) for being the best performing bank in dealing government securities for the months of June and July 2019. The award was received by Stanbic Bank CEO Mr. Patrick Mweheire during the quarterly Uganda Bankers Association (UBA) meeting at BoU headquarters in Kampala.

Governor BOU Prof. Emmanuel Mutebile(L) and Patrick Mweheire(R), CEO Stanbic Bank Uganda(LTD) at the do

The bank has been recognised by the regulator for its role in the primary dealer system that helps in developing Financial Markets and in reducing the costs associated with issuing Government Securities; through increasing demand, market efficiency, encouraging secondary market trading and improving the quality of Financial Market information.

A primary dealer is a pre-approved bank, broker or financial institution that is able to lend money to the government through treasury bonds and treasury bills. 

Background information on best performing banks in government securities award

In January 2005, the Bank of Uganda initiated the “Award for the Best Performing Primary Dealer in Uganda Government Securities for the Month” to recognize the Primary Dealer that performed best in trading Uganda Government Securities and transmitting information regarding the status of the financial markets to the Central Bank.

A Primary Dealer is any financial intermediary that has signed a Memorandum of Understanding with the Bank of Uganda to execute the following actions on a consistent basis:

§ To participate as counter-party in Uganda Government securities auctions conducted by the Bank of Uganda.
§ To provide the public with prices or yields that they will buy and sell “On-the Run” (the most recently auctioned) Uganda Government securities. i.e. Treasury bills and Treasury bonds on a continuous basis.
§ To provide the public with prices or yields that they will buy Off-the-Run (Other than the most recently auctioned) Uganda Government securities on a continuous basis.
§ To trade with the public Uganda Government securities at the prices or yields that they have quoted.
§ To make available information on the status of the market to the Bank of Uganda on a timely basis.

The points allocated for the Award to the Best Performing Primary Dealer in Uganda Government Securities for the Month are aggregated to determine the winner of the prestigious award.

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Dfcu Profitability Improves, Records Shs35.6bn Profit In Half Year Results

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Early this year, Dfcu bank posted its 2018 profits indicating a sharp fall from its 2017 results.

The results indicated a decline in the deposits, the bank registered 0.4 per cent decline from Shs11.987 trillion registered in 2017 to Shs11.979 trillion in 2018.

The bank has now posted Shs35.68bn net profit in the first six months of 2019 compared to Shs41.62bn registered in first six months of 2018.

According to unaudited results which were released recently, dfcu Ltd attributed the decline in net profit to lower recoveries in the first half of 2019 compared to the first half of 2018.

Headed by Mathias Katamba as the new Managing Director, dfcu also saw its total assets reduce to Shs2.95 trillion from Shs3.04 trillion for the period under review.

Mathias Katamba, MD dfcu

The bank also saw its loans advanced to customers reduce to Shs1.36 trillion down from Shs1.42 trillion recorded in the first half of 2018.

Customer deposits almost remained stagnant, reducing slightly to Shs1.99 trillion from Shs2.1 trillion.

According to a statement, the company explained that it has maintained a cautious view to lending “particularly in wholesale area in light of turbulent circumstances in the international financial markets (Brexit, trade wars, lower growth in China and Europe.”

It adds that it has continued to reduce reliance on expensive funding, registering a 13% decrease in borrowed funds during the first half of 2019.

“Cash and investments increased by 4% as the bank maintained a healthy liquid position allowing us the flexibility to increase its loan book if opportunities arise particularly in SME and retail areas,” the company’s statement adds.

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