Centenary Bank Partners With Service Cops to Improve Insurance Penetration in Uganda

Centenary Bank launched its bancassurance offering on the 11^th July 2019 following the release of the guidelines under the enabling law that allowed Banks to perform the business of Bancassurance.

Bancassurance is an arrangement between a bank and insurance companies allowing the insurance companies to sell their products to the bank’s client base but even more by utilizing the Bank’s infrastructure to increase Insurance penetration beyond the actual client base of the Bank. This partnership arrangement can be profitable for both companies.

The distribution of such insurance products has been and continues to be largely offered using the traditional approach of insurance agents armed with paperwork filling up proposal forms, sending such forms manually to their head offices and once approved, then physical Insurance policy documents have to be delivered to clients with the entire process taking anywhere between 2 to 7 days depending on which part of the country the clients are located.

In addition to the challenge of the delayed Turn around times described above such manual processes are usually prone to:

• Fraud cases where the unsuspecting insurance consumer is handed a policy document that has been forged and not from the real Insurance company
• Lack of a standardised Insurance pricing mechanism where different agents present different prices to potential consumers characterized not enough knowledge to defend such pricing regimes.
• Loss of money in form of Insurance premiums because consumers often release cash to the handlers who if are not people of integrity end up suppressing such funds and are forced to produce forged documents for clients
• The Banks involved in granting credit against insured collateral would have to run an authentication process with the Insurance companies to be certain that the policy document is real and a number of them fell victim to forged documents
• The Insurance companies themselves are dealing with some bad apples in form of their agents who receive insurance premiums from clients and is not remitted. The clients are given forged receipts from the Insurance companies and forged Insurance policies.

The presence of such challenges continue to dent the reputation of the Insurance Industry in the eyes of the potential consumers and creates bottlenecks in the growth of the Insurance business.

The Role of the U-INSURE platform

The Bank made a deliberate decision to use the U-insure platform developed by Service Cops to addresses all the above challenges by digitizing the entire Insurance process thereby offering a standardized, secure, reliable and user-friendly platform.

Brian Muhimbura, the Insuretech Lead at Service Cops says the company has positioned itself in the Insuretech space and will continue to innovate around products and services that speak to the masses. In addition to U-insure, it partners with NEON INC, a related entity to deliver the Motor Third Party platform currently used by the Insurance industry for the MTP product and recently unveiled the Mandatory Marine Insurance platform also under the auspices of the Insurance Regulatory Authority and Uganda Insurers association that will promote the consumption of local Marine Insurance thereby helping in the growth of the Insurance industry.

U-Insure delivers the following;

1. Digitization of the client onboarding process; Bancassurance agents at the various Bank branches have a desktop/ Mobile Application that they use to capture the Insurable assets details that get forwarded directly to the Insurance company for approval. There is absolutely no need for paperwork in the underwriting process.
2. Reduction in Turn around Time: due to the digitization of the attendant processes, the entire underwriting and final client policy generation process has been reduced from an average of 3 to 7 days to between ten to thirty minutes.
3. Automated Insurance premium computation: The platform has an inbuilt insurance premium computation engine for all the possible insurance scenarios thereby eliminating the need for any manual intervention, which makes it more acceptable to the clients
4. Accessibility to all Insurance companies; All the Insurance companies that partner with the Bank have access to the platform, which they use to approve all policies generated from the different branches in real-time.
5. Integration to several payment channels: All clients that are created through this platform receive unique identifiers, which enable them to make payments over several payment channels such as Cente Agents, Bank Tellers, Mobile Money etc.
6. Ease of reconciliation; All payments made by the client are directly updated at the Bank and on the Insurer’s portal and as such at any one time, the Insurer knows exactly how much they have collected in a specific time frame;
7. Superior reporting for Management; The Bank and Insurance companies both have a real-time ability to track the activity of their staff, insurance premiums collected and can make informed decisions about human resources and business placements.
8. Client Access; The clients have access to their Insurance status and history of payments for running policies at any time using the client App
9. Claims management; The platform offers a unique claims management process by digitizing the entire process thus providing information to the insurer claims departments in real-time. This helps in reducing the costs involved in the management of the claims process, reduces the turnaround time too.

The U-insure platform that won the Bancassurance innovation award 2022, provides so far the best-case scenario of a paperless insurance process wherein a space of between 10 to 30 minutes, a client based in Arua over 500KM from Kampala can initiate an insurance process, make premium payment and receive a policy document in their email without visiting any physical brick and mortar outlet of an Insurance company.

This same client has access to their insurance information through the client App and does not need to call anyone to check on their Insurance status or track their payments for those that take long term continuous payments policies but will simply interact with their phone at their convenience.

The insurance penetration in Uganda continues to be low, under 1% and it is evident that one of the contributing costs to the provision of an insurance service is the high distribution costs, which ultimately makes insurance costly and unaffordable to the masses. The evolution of innovative platforms like U-insure by Service Cops will not only serve to reduce the cost of distribution of insurance services but will go a long way in driving acceptance of the service by potential consumers given the benefits it brings to the table and may as