Minet: One of the Leading Local Insurance Brokers in Uganda by Maurice Amogola

Interview with Maurice Amogola, CEO of Minet Uganda

What is your assessment of the sector in Uganda?

Uganda is a growing economy with 5 to 6% GDP growth per year. Our insurance sector is still an asset we are developing. For the last 35 years we have been undergoing various metamorphoses. Our penetration is still quite low at 1% GDP ratio. There are immense opportunities in Uganda. We encourage investments because of the opportunities in mining and oil and gas. The country is looking forward to getting the final investment decision which will help spur the economy. We are predominantly an agricultural economy with the majority in the subsistence sector, but there is a lot of potential for growth. We have a very good climate in terms of rain. We can grow all manner of crops in this country that can be commercialized. The insurance sector is doing around 250 million dollars annually, both general and life. There are about 25 insurers doing general business insurance and 7 insurers doing life insurance. You can invest in insurance and make good revenue out of it. However, the market has to work towards acceptance of insurance. There is still work to be done to make people trust the partnership with insurers.

Is the sector competitive? How do you stand out?

We have just started agricultural insurance which poses a lot of potential for growth because Uganda is an agricultural economy. The challenge we have is to get people to accept insurance as a very strategic partner towards their business in agriculture.

We have been in the Ugandan market since 1954. We are proud to have over 60 years in the market. We have gone through various mergers and acquisitions. For over ten years, we worked under the Aon Corporation brand. Aon Corporation then decided to pull out of Africa and sold the business to Minet. Minet is now represented in 10 African countries. By virtue that we are the largest correspondent of Aon in Africa, we do a lot of work for those clients in Africa as well as local corporates and many individuals that would like to have qualitative risk management and insurance consulting here in Uganda and beyond. We are among the leading local insurance brokers both in Uganda and in the region.

What are the areas where there is potential for growth?

We have just started agricultural insurance which poses a lot of potential for growth because Uganda is an agricultural economy. The challenge we have is to get people to accept insurance as a very strategic partner towards their business in agriculture. We have a lot of potential in oil and gas. Once the final investment decision is done, we expect that about 20 billion dollars’ worth of investment will pour into Uganda. This will bring opportunities to people in banking, insurance, contractors. Among the 20 billion dollars’ worth of investment, there will be a pipeline, a refinery, a holding facility. A major international airport is being developed in western Uganda so aviation will also be a very significant part of this investment. The potential for investment carries on along these major investment opportunities. In mining, we have a lot of iron ore deposits, cobalt deposits, and all these are opportunities that any potential investors can look forward to investing in. For insurance to make money and for us as insurance consultants to make money, we rely on a lot of investors coming into the country to put up manufacturing plants and to exploit the mineral potential. We have a lot of gold and very soon a number of companies will be licensed to start mining it as well.

What are some of your success stories?

We have worked on a number of projects. We are currently doing projects for an investor in mini hydro substations. The country requires a lot of hydroelectric power which is a cheaper form of power because it comes from water. We have a lot of rivers that flow out of our forests. We have many hydro projects coming up from 8 to 15 megawatts. We are currently sitting with a client who is now developing 8 mini hydro projects. We have worked with them and the development partners. An 8-megawatt project could have an investment value of 25 million dollars which means that there must be lenders and international contractors that can put up mini hydropower plants. The country wants to ramp up power to 2,500 megawatts to steer the industrial development. So far, a number of new hydropower plants have been put up for those who are keen in Uganda. Karuma Hydropower Plant has just been completed. Isimba is doing about 180 megawatts and has just been completed. All of these are investments into the country which provides energy that will then develop the manufacturing sector and any other industrial processes that require power to spur the mining and requires also a lot of industrial power. There is also potential development in solar power. We have a lot of sun being on the Pearl of Africa. We also have the equator passing through the country. There are a number of solar power plants already. Depending on the size of the plant, it is quite a significant investment. We have been working closely with the major distributor of power in this country for a few years now. This is a success story because they have an insurance program that is cost effective and at the end of the day, they are able to do their business and they know that their claims and their insurance program are both cost effective.

What are the key success factors in your industry?

The first aspect is that you need to have trained personnel. In insurance, you start from being an engineer, lawyer, architect, actuary. Then you learn insurance which enables you to advise clients in that particular sector. You are able to design programs that ensure that the client is able to get value for money. Apart from that, of course, it requires a lot of experience. I have around 20 years’ experience in the insurance sector. There is then training which a number of institutes and colleges require. The main training body worldwide is the Chartered Insurance Institute of London. Other bodies have also come up that are equally strong in terms of training. India, Australia, Kenya, and South Africa all have very strong colleges of insurance. East Africa is not being left behind. Uganda is now formulating a college and is training local personnel towards risk management. The capacity to get insurance personnel who understand insurance and the dynamics of insurance is critical for the success of the industry. Equally important is the aspect of pooling premiums together and investing them prudently so that at the time a claim arises there is sufficient money. Insurance cannot be done in isolation of reinsurance. Most insurers will also work with their reinsurance partners to provide that qualitative service. This shows the success of the industry.

Project yourself towards the medium term, three years’ time. What would you like to have achieved? What is your vision for the company?

We are keenly waiting for the final investment decision which will trigger a massive transformation in this country. Once the 20 billion dollars of investment is put in this country, it will change the way we look at many aspects of life. It will offer massive employment to various sectors, there will be investments in having the pipeline exporting the crude oil, there will be a refinery that processes part of the crude and offers petroleum products to the various industries, there will be those auxiliary companies that come out of crude oil like plastics and bitumen which can be used for roads. With the country investing in another airport, we should see a lot of exports in agricultural products that go into Europe as well as ease of access in and out of the country. As soon as all these investments are in, we will definitely see an upside in revenue for the company. We project ourselves to grow in the next 3 years by 30 to 50%. We are very bullish and we are happy that the government is really talking to development partners to develop these natural assets that God gave to Uganda.

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