In a country where the insurance industry is grappling with low penetration levels and lack of awareness about insurance, insurance companies have had to find innovative ways to stay in business. The sector’s premium growth declined to 18.48 percent in 2012 from 20 percent in 2011 owing to ‘high inflation and bank lending rates’, which made different products expensive. However, with a 24 percent market share, Jubilee Insurance Uganda has been at the helm of the industry growth, emerging market leader over the last 5 years and while the industry recorded fluctuating growth over the years, Jubilee grew by 43 percent in 2012 marking the highest growth in the history of the company. According to the Insurance Industry Report for 2012 recently released by the Insurance Regulatory Authority (IRA), Jubilee insurance underwriting profit rose by 17 percent to represent 66 percent of the industry’s total underwriting profit. Additionally, the company was awarded the best insurer award for 2012 for the third time by the Uganda Association of Insurance Brokers (UAIB).
The genesis
The story of Jubilee Insurance began 75 years ago in Kenya when the mother company Jubilee Holdings was founded on 3rd August 1937 to mark the Agha Khan’s golden Jubilee. The name Jubilee was settled on as it was the amount of paid up capital that would be needed to launch the company that would take up all kinds of risks from fire to marine, life and accident. The company was incorporated with an authorized capital share of Kshs1 million made up of 50,000 shares of Kshs20 each. In a few months, Jubilee had issued over 1,200 life policies and in 1940, the company opened a branch in Kampala and another one in Mumbai, India. Following a period of political and financial instability in the 1970s and 1980s in Uganda, Jubilee Insurance Uganda closed shop and only re- established presence in 1992.
The company is owned by Jubilee holdings limited with 30 percent shareholding, Jubilee investments Uganda (a 100 percent subsidiary of Jubilee Holdings limited) with 30 percent and the Agha Khan Fund for Economic Development holds the remaining 35 percent. Innovation, many firsts The company CEO, Deepak Pandey attributes Jubilee’s success to brand equity, values, claims paying ability and team work. Having worked with Jubilee Insurance for 16 years, it is safe to say that Deepak Pandey is part of the legacy and the strong brand that the company has built thus far. He is proud to be at the helm of a company that has established itself as a strong brand and which enjoys support from customers, brokers and other stakeholders who trust the company’s ability and willingness to pay claims.
Pandey says running a successful and profitable insurance operation while retaining the market leadership is no mean feat. “We have had to constantly find ways to do things differently in order to stand out and create a better perception for the company amidst the negativity surrounding the industry on claims payment. In line with this we took a number of initiatives,” Pandey, said in an interview with The CEO Magazine, adding: “In 2006, we became the first insurance company in the country to implement a quality management system and achieve ISO certification and soon after that Jubilee became the first insurance company in Uganda to cross-list on the Uganda Stock Exchange (USE).” In addition Jubilee Insurance also became the first company in Uganda to volunteer for credit rating since it is not mandatory for Insurance companies to be rated.
Today, the company enjoys the highest credit rating owing to its robust growth over the years, well capitalized balance sheet underpinning sound solvency margins, increased underwriting profits as well as a significant investment portfolio. “We have launched many new products in a bid to become a one stop shop for all our customers and brokers. Other than the traditional general insurance products, we have ventured into travel, medical insurance for both corporate and retail sector as well as individual life policies and personal pension plans and agriculture insurance. This has seen Jubilee emerge as a multi-line insurer providing a wide range of solutions to almost all sectors of societies including those at the lower end of the economy,” Pandey says. In early 2012, the company launched micro insurance to provide funeral covers for village communities in partnership with CARE which is an international NGO. This, he says, has been a welcome diversification, away from the corporate sector but has also allowed the company to meaningfully provide cover for especially the lower segment of the market which is underserved by the insurance industry.
Furthermore in 2007, the company made a decision to venture into medical insurance which is a risky business due to the fact that insurance claims are very high and the cost of treatment keeps increasing. Six years down the line since the decision was made, the company now serves over 40,000 members under its medical insurance scheme and is looking to provide a bare minimum basic medical care for people in rural areas who have no schemes and cannot afford the high end product.
“Medical insurance is a risky business because currently as we speak out of 22 insurance companies in Uganda, only 5 are offering medical insurance. Jubilee is however financially very strong with a large general insurance business which is how we have managed to sustain the medical insurance segment. We also have a good reinsurance program for medical which has further boosted the product,” he said, adding,
“I believe that everyone in this country is entitled to access good medical services despite their social standing and all stakeholders of this sector should work hard to develop medical insurance solutions for the market.” Pandey attributes 2012 achievements for the company in terms of profitability, business growth and human resource development to team work and investment in the work force. As of 2012, the company recorded gross written premiums of over Ushs 83 billion compared to Ushs 59 billion in 2011. It also registered profits of Ushs 10 billion in the same year compared to 6.2 billion in 2011. General Insurance recorded a net income of Ushs 41.7 billion while life insurance netted Ushs 2.2 billion. The company paid claims of Ushs 30 billion in 2012 compared to 23.9 billion in 2011.
Since the insurance industry like many other industries suffers from an acute lack skilled labour, Jubilee has opted to run an in-focused talent pool development program in which high potential staff are identified and continuously exposed to on the- job training. “Through this program, we identified 16 young energetic, dynamic, high potential team members and we hired a consultant to equip them with soft skills for two months and now they are going through the second phase. We are looking at the future by building a strong team of staff that will not only sustain the current growth but also build on our achievements and initiatives going forward,” he explains.
Deepak Pandey
Pandey is a strong believer in team work, employees’ loyalty and investment in human resource. His vision for Jubilee Insurance Uganda is to be the most preferred and respected brand for all strata of the society not only for its products and services but also for having the best Ugandan work force. “I would like to nurture a strong, motivated and loyal team of local insurance professionals through training and development over the next 5 years to be the future leaders,” he states.
Reaching out to the uninsured
Pandey believes micro-insurance is the sector’s future because with low penetration levels, there is a need to attend to a critical mass to provide this product by bringing in more people especially those in the rural areas. To tap into this future potential, the company has extended its tentacles outside Kampala to Mbarara, Mbale, and Jinja and is looking to open more branches.
“Jubilee holds monthly seminars to address village communities and educates them on the benefits of insurance. We also participate in trade shows and exhibitions which is a great avenue to reach out to a lot of people and do sales pitches,” he says. For Pandey, 16 years in Uganda insurance industry have not come without challenges. After a 15 year stint with a large public sector insurance company in India, I was looking to take on challenges in a new environment. Initially, Uganda presented challenges of low awareness accompanied by a lack of skills in insurance. I believe in developing people by giving them opportunities to learn at work. When I joined the company, we were a small team of about 15 people. Today, Jubilee directly employs 80 people and over 150 indirectly.
“When I look at my team members some of whom came in fresh from the university 10 to 15 years ago with no insurance experience, I derive a great deal of satisfaction in knowing that I have been part of their success story. I want to give back to the team that has served their company all these years by helping them achieve their career aspirations,” he says proudly. Pandey who is probably the industry’s longest serving CEO and currently the chairman of the Uganda Insurance Association (UIA), has also served as the association’s Vice Chairman. He has also served on the board of the Insurance Regulator- then called Uganda Insurance Commission between 2006 and 2009.
The future hangs on innovation
The future looks bright for the company. Jubilee has a long term plan aligned with the Jubilee Holdings 2020 vision of continuing to achieve the growth, build customer base as well as expand to new markets by upgrading the IT system. “Our vision for the future is based on innovative ways of building and sustaining a large customer base through product innovation, improved service delivery and IT upgrade. We are proud to be among the companies that are fully automated and that continue to invest in staff training and development,” he adds.