Growth in insurance not enough to deepen penetration - IRA
What you need to know:
- Growth in insurance uptake has been more prominent in life, with a number of people seeking to cushion themselves against large hospital bills.
Insurance Regulatory Authority (IRA) has said the sector experienced a 20 percent growth in uptake in 2022, demonstrating growth in insurance coverage against risks.
However, the growth was not good enough to deepen penetration, which continues to be below 1 percent.
Speaking at the Annual Insurance Week in Kampala, Mr Ibrahim Lubega Kaddunabbi, the IRA chief executive officer, said deliberate steps that seek to bring services closer to the people, digitizing products and innovating products that are relevant to people, continue to shore up the sector, amid a number of disruptions, worsened by a slowdown in economic growth.
“We have now put products for low income earners on the market for people who earn about Shs10,000 a day. Due to these micro insurances, the number of policies sold has increased by about 50 percent,” he said.
The insurance week, which is organised by IRA in partnership with Uganda Insurers Association, Insurance Training College and Insurance Brokers Association of Uganda, seeks to enhance uptake that has remained low over the years. .
However, despite the low penetration, the sector has been growing steadily in recent years, with an annual growth rate of around 15 percent.
The growth has been more prominent in the life sector, with a number of people seeking to cushion themselves against large hospital bills.
Mr Kaddunabbi said IRA had noticed that more people are buying new products such as agricultural insurance, which have traditionally registered low uptake.
“As we speak, the government premium subsidy has been exhausted. This is an indication that the uptake has increased,” he said.
However, the growth has been achieved as the sector gains more trust through payment of claims, which as of December 2022, shored up written premiums to Shs242.49b.