The Challenges of Managing Microinsurance Schemes in Uganda

This paper indicates that microinsurance schemes in Uganda face some management challenges that impact their effectiveness. The paper states that these challenges include:

• Institutional weaknesses, particularly in the areas of management, administration, technical expertise and data systems, which lead to:
  • Weak communication and coordination between partners,
  • Poor marketing of products,
  • Weak accountability.
• Lack of client knowledge of insurance policy, which affects beneficiary choice, understanding and appreciation of the product.
• Limited coverage due to:
  • Restrictive mechanisms of reaching the poor through agents such as microfinance institutions (MFIs),
  • Restrictive insurance policy, which affects the demand for insurance.
• Sustainability partly caused by small premiums that are not able to cover re-insurance.

The study:

• Reviews the performance of several insurance schemes through documents and interviews with relevant authorities,
• Discusses experiences in the provision of microinsurance for the informal economy as well as challenges faced in managing microinsurance schemes.

The study concludes that there is a need to:

• Improve institutional managerial, administrative and technical capacities,
• Develop more efficient transactional and informational systems,
• Ensure client education and awareness,
• Increase market outreach through other approaches,
• Ensure sustainability.