Gone are the days when buying insurance was akin to entering a supermarket and picking what is available on the shelves. Today, the “Customer is King” philosophy has made inroads into Uganda’s insurance market. Cover customization which is also referred to as cover personalization basically means repackaging an insurance cover to the liking or preference of the customer. While the standard insurance policy covers still serve their intended purposes, customer behavior shows a growing inclination towards specially packaged insurance covers that meet their individual needs. This pauses some challenges but it is also an indicator of the insurance sub-sector’s growth.
The trend can partly be attributed to increased sophistication & specificity of customer needs. The information age too is a contributing factor. Imagine a standard Electronic Equipment Policy which ordinarily provides protection against loss resulting from accidental damage to one’s electronics. While in the past this was sufficient as one would claim for replacement of the damaged equipment, today this is not enough. This is because the contents of a laptop, for example, could be more valuable than the laptop itself which raises the need to cover not just the laptop but the valuable data on it too. In this case, availing the customer an insurance cover that covers both the laptop and loss of data therefore suffices.
While many insurance companies are adapting to the customers’ unique insurance needs, insurance brokers have been quick to catch on and are benefiting from this trend. Customers are finding it easier to engage the services of an insurance broker who listens to their specific needs, shops around for an insurer that can offer sufficient cover or conjure up a special insurance cover that takes into account all those needs. In short, the insurance broker absorbs the burden of haggling and shopping from the available insurers on the market.
Mr. Solomon Rubondo, the Chairman of the Insurance Brokers Association of Uganda (IBAU) explains that the rise of this phenomenon is to the benefit of not just the insurance brokers and the clients but also the insurance companies. “In the end, all three parties are happy. The customer gets the right cover they desire, the insurance company gets the business but so does the insurance broker.” He went on to call upon insurance companies to embrace this development. “It is actually bound to just increase their business volumes and further improve the insurance penetration overall”.
Mary Nakahara a printery owner who recently acquired an insurance cover was in owe of the insurance cover customization trend. “I was always hesitant to acquire a generic insurance cover for my business but the recent political instability prompted me to think harder. Fortunately, through an insurance broker – Kenbright Uganda, I was able to secure an insurance cover that works for me and my business. It is a hybrid of Political Instability & Workman’s Compensation” she said.
All in all, a lot seems to be unfolding in the insurance landscape including the general upsurge in the uptake of medical insurance as a result of the COVID-19 Pandemic. The case of Mary, the printer owner, also inevitably points to the growing role of the insurance broker in the insurance market. Their risk cover solutions easily transcend traditional policy covers. This makes insurance more palatable as it is personalized to the insured’s needs. Without a doubt, the prospects of the sub-sector are looking up.
