Out To Lunch: Elitism leading to low uptake of insurance services

By Denis Jjuuko

Over the weekend, a photo of a baby in an incubator started circulating on social media. It is said to be of a baby born at six months and it is fighting for its life at an elite Kampala hospital. In the message, the mother was appealing for help from well-wishers to pay the bill after the father disappeared on seeing the bill. In the Whatsapp message, the bill was Shs25m. There was no explanation how the couple ended up at the said hospital.

The story reminded me of a figure I had come across recently. There are only 220,000 individual insurance policies in Uganda. It must be noted that a policy can have more than one beneficiary. For example, a company that pays medical insurance for its staff is considered as one policy. We can assume that they are about half a million people with insurance.

That statistic also reminded me of the mid 1990s. A telecom company came to Uganda and wowed all of us with mobile phones. There was one problem. A single cellphone that didn’t have the capability to send a text message (sms) or even take a photo cost Shs3m. That is probably about 10m in today’s money. So cellphones were for the chosen few. Only CEOs, some politicians and the richest people could afford them — which were the size of your average brick! In the late 1990s, another mobile phone company came and changed everything.

Insurance companies today are living in the mid 1990s like that telephone company. They are so happy to have 220,000 individual policies when they could have 10 million or more. They have made it difficult and expensive for people to access insurance. An ordinary medical insurance policy for one year for one person costs upwards of shs800,000 and it must be paid upfront. That has excluded many people out of this segment. They can say that the cost of medical services is high and they may have a point but they can bring it down if they worked with hospitals and signed as much people as possible. The mother whose baby is fighting for its life wouldn’t have to go appealing for help when the husband runs away if insurance worked for everyone.

One of the problems with insurance companies is that they take ages to pay. It is not uncommon to go to a hospital and they refuse to work on you even when you have a valid insurance policy claiming delayed payments on previous invoices. Insurance companies also sometimes want to charge you a premium and then dictate which hospitals or consultants to visit. If consultant/hospital A accepts an insurance policy from Insurance A, then it should be the patient to decided where to go. Some of these details are never told to a customer when signing up because they have made policy to be too long with all sorts of clauses. In Europe and America, technology companies such as Google were forced to have a few lines of their terms of use policies. Previously, they had acres of spaces dedicated to such terms. Insurance companies in Uganda need to change. A few lines should be enough to promote transparency.

At any health facility, the first thing receptionists ask is whether you are paying cash. If you are paying cash, they are very happy to work on you. If insurance, some health facilities can even keep you in the queue as they handle cash people first. Some consultants don’t even want to know. If you have insurance, they don’t want to look at you. They want cash. That has led to low uptake of insurance services. I must however say that health insurance is one of the fastest growing segments together with the life policy.

The period for people to get claims, which aren’t medical related is also too long. The Insurance Regulatory Authority (IRA) set a discharge voucher period where an insurer acknowledges the claim. But that doesn’t mean that the insurer will pay. It can take years before you get paid. Insurers can come up with all sorts of excuses. I know somebody who lost his car to thieves and insurance
claimed he didn’t have his phone with him so they didn’t steal the car. They know that the court process will take many years. The person has been in court for over five years for a claim that is less than Shs20m.

The lack of innovation, slow uptake of technology, delays in settling claims, and concentration in urban areas for only the elite is the reason insurance penetration is so low and contributes a paltry 0.85% to the country’s GDP. Insurers should learn a thing or two from the mobile phone industry that stopped concentrating only on the elite. They say the fortune is at the bottom of the pyramid because that is where the majority of people are. At the top, they are very few people.

The writer is a communication and visibility consultant. djjuuko@gmail.com 

*Internet photo of a premature baby in an incubator