Mr Kaddunabi says the low performance underscores the need for mergers or increased investment among smaller companies. Photo / Michael Kamukumirizi
In the 12 months to December 2024, the insurance sector grossed Shs1.76 trillion in gross written premiums for both life and non-life insurance.
But the interesting part is, a large part of this was written by just a few companies, while the rest were just peripheral players in the larger scheme of things.
For instance, according to data from Insurance Regulatory Authority (IRA), during the period, Shs987b worth of written premiums were recorded under non-life insurance.
However, nearly 60 percent or Shs592.2b was written by just five companies.
Life has about 20 companies, which means the remaining 40 percent or Shs394.8b was written by over 15 companies.
IRA does not break down the share for each company, but a further analysis of existing data indicates that the non-life market has a high market concentration, with the top three insurers accounting for a combined market share of 41.1 percent.
Such a scenario, IRA argues, presents a dilemma, where there are so many small companies working just to survive and with no chance of achieving market standards as long as they continue to work as sole entities.
Therefore, IRA chief executive officer Ibrahim Kaddunabi Lubega says, the figures above underscore the regulator's advocacy for mergers or increased investment among smaller companies.
“… just three out of 20 companies control nearly half the market. The top five collectively hold 59.7 percent of the market,” he says, noting that this means that a quarter of the players dominate well over half the industry's total gross written premium.
Mr Kaddunabi notes that the high up concentration means that competition is highly tilted in favour of larger companies, and because of this, smaller companies have not been allowed space to grow organically.
IRA data indicates that in the three months to March, UAP General held the largest market share of 17 percent, followed by Sanlam General (12.9 percent), Jubilee Health (10.7 percent), Jubilee Allianz (10.2 percent) and Britam, which closed off the top five with a market share of 8 percent.
The market has already recorded some mergers this year, including the merger of Jubilee Health and Jubilee Life, which will operate under the Jubilee Life Insurance name.
Mr Kaddunabi notes that the industry might this year and beyond see several mergers and acquisitions, yet several new insurance applications remain pending.
The insurance sector has been recording some good growth in terms of premiums, even as penetrations have stagnated at under 1 percent for decades now.
In the 12 months to December, gross written premiums rose to Shs1.76 trillion, according to IRA, which was a 10 percent growth from Shs1.6 trillion recorded in 2023.
The improvement was largely due to sustained premium growth across life and non-life insurance.
During a reflection on the 2024 insurance sector performance and 2025 outlook at the 64th CEO's breakfast meeting in Kampala, Mr Kaddunabi noted that gross written premiums for non-life rose to Shs987b from Shs923b in 2023, a 5.8 percent increase, while life premiums increased to Shs702b, up from Shs612b, a 14.7 percent growth.
The insurance sector, according to IRA, has continued to show remarkable resilience throughout 2024, navigating macroeconomic challenges, embracing digital innovation, and deepening its commitment to customer-centered solutions.
However, IRA argues that there is need for more efforts to achieve double-digit growth.
Premiums from health membership organizations have also been growing, increasing to Shs69.8b from Shs56.4b, a 23.76 percent growth in premiums.
Data further shows that during the 12 months to December, 801,927 policies (or 85.4 percent) were written, of which 684,561 were individual, while 117,366 (14.6 percent) were group or corporate policies.
