Of 2.5m vehicles in Uganda said to be covered by motor insurance, only 500,000 have mandatory motor third party insurance, a situation which represents around UGX200bn ($54.50m) in lost revenue to insurers and UGX70bn in lost stamp duty to the government.
For many years, Uganda’s insurance firms have failed to grow motor third party insurance business amidst a surge in the number of vehicles on the roads as many motorists resorted to using forged policy insurance certificates, reported Independent.
To address this issue, the Insurance Regulatory Authority of Uganda (IRA) in collaboration with the Uganda Revenue Authority, Ministry of Works and Transport and the Uganda Insurers’ Association have developed a mobile payment platform to streamline the operations of motor third party insurance, setting the pace for insurance companies to invest in offering products digitally.
The platform, which has been in operation since 1 July 2020, will enable motorists to purchase motor third party Insurance policies via their mobile phones using mobile money.
Mr Joseph Ndiho, the project’s technical leader at IRA, said the new system, which can be accessed using both smart phones and the basic phones, is linked to the different government agencies which in turn will be able to verify the owner of the vehicle.
“There’s going to be no room for premium negotiation between a customer and an insurance firm because the system will automatically pick data from the car registration agency indicating the car type and owner based on the registration number inserted into the mobile money platform and automatically indicates the amount of money one is supposed to pay for the policy,” he told The Independent in an interview.
“Now, once the payment has been made, a statement is generated indicating payment of insurance for a particular car, which is then presented to any insurer of choice,” he said.
The insurer will then key in the codes of the statement generated in their system, confirms the data and an insurance certificate is issued, he added.
Mr Ibrahim Kaddunabbi Lubega, the CEO of IRA said the new platform will not only eliminate forgeries in compulsory motor insurance, it would also enable clients to pay the appropriate insurance premiums and avoid being overcharged.
“This platform will also improve motor third party insurance claims management processed through accurate data which is generated on a daily basis, and therefore reducing substantially the period between claim lodging and settlement,” he said.
He also said that the centralised system would enable the IRA to set policies that protect and safeguard the rights and benefits of policyholders.
Source: MEIR
