To reduce the insurance costs and save the country from massive capital flight
The Ugandan government has finally agreed to establish a national reinsurance company. The move is intended to reduce the insurance costs and save the country from massive capital flight, starting next year – reported in Daily Monitor.
As per the government, the cabinet has approved the formation of the company that the insurance commission and insurance firms have for over past 15 years.
Evelyn Nkalubo, commissioner of Insurance in Uganda, said: “By not having a national re-insurance company, almost half of the premium collected by insurance firms to cover anticipated costs of life and business losses was going out of the economy. When you look at 2008, the premium was Shs167 billion out of which Shs67 billion was taken out of the country.”
Olli-Pekka Ruuskanen, CEO of the Uganda Insurance Association, said: “For ordinary Ugandans and businesses, a national re-insurance company would lead to a reduction in the cost of insurance especially that of high risk covers offered by local firms.”