CMA Asks Insurance Companies To Float Shares To Expand Capital Base

Ugandan based Insurance companies should consider floating shares in the capital markets as a means of raising capital, the Chief Executive Officer of the Uganda Capital Markets Authority (CMA), Keith Kalyegira has advised.

Kalyegira says the move would expand the company’s capital base and strengthen their financial status by allowing individuals to put their money in to the companies. He was speaking during the corporate dinner hosted by the ICEA Lions at the Sheraton Hotel.

“The insurance penetration in Uganda is still very low and floating shares in to the market will give you another avenue of raising the much needed capital,” Kalyegera said.

He added that given that the insurance penetration in Uganda was still low, the reliance on premiums was not viable to sustain the corporate profits.

Kalyegira also urged top companies to take up comprehensive insurance covers to avoid falling in to cash crunch when things don’t go right.

“Times are tough and that is why some companies are seeking bail out from the government. But going forward, it would be prudent to work with the insurers to see which aspects of businesses can be covered to reduce the amount of losses,” said Kalyegira

During the ceremony, Fist Chattered Security Chairman, Philip Ndegwa said that ICEA is seeking to tap into the technology as a way of increasing customer awareness and proving services to clients..

“We  are moving swiftly to harness technology to improve our business processes and make them more efficient. The increased usage of online and new media has made it necessary for us to improve our method of distribution of information about our products and services while giving the opportunity for the consumer to give us feedback through our website and other forums,” he said.