Medical cover uptake grows, profitability remains low
Medical insurance gross written premiums have increased from Shs107.6b in 2014 to Shs244.98b in 2021. Photo / File
What you need to know:
- For the last eight years, according to Insurance Regulatory Authority, from 2014 to 2021, medical insurance premiums have more than doubled with users growing to Shs245b.
Medical insurance uptake and gross written premiums have more than doubled in eight years since 2014, according to a study by Insurance Regulatory Authority (IRA)
The study - Formal Medical Insurance in Uganda – further indicates that profitability by insurers, despite the growth in uptake, remains far below expectation with corporate clients dominating the uptake. .
Speaking during the release of the findings of the study in Kampala, Mr Ibrahim Lubega Kaddunabbi, the IRA chief executive officer, said for the last eight years from 2014 to 2021, medical insurance premiums have more than doubled with users growing to Shs245b.
“The study established that medical insurance gross written premiums for the last eight years increased from Shs107.6b in 2014 to Shs244.98b in 2021. The loss ratio on the other hand remained consistently high over the same period averaging about 75 per cent with claims amounts increasing from Shs61.2b in 2014 to Shs117b in 2021,” he said.
However, the level of profitability for medical insurers remains low with 75 percent of written premiums paid out in claims.
The study also found that medical insurance is dominated by corporate clients, anchored by underlying values of companies that employ users.
“For corporate clients, it enhances the wellbeing and improves the health of workers and family members through access to quality health care. It motivates staff and also provides a healthy workforce,” Mr Kaddunabbi said.
The study also found that while aggregated premiums for corporates were relatively affordable, individuals who took out medical insurance noted that it was costly and inaccessible to most.
