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Insurance premiums to grow to Shs1.5 trillion, says regulator 

Mr Kaddunabi says the insurance sector has seen significant growth in premiums, notwithstanding the low penetration of under 1 percent. Photo / File 

What you need to know:

  • Insurance remains a key part of Uganda’s financial system. The low penetration notwithstanding, the sector offers an array of opportunities and strengthens Uganda’s financial system. The Insurance Regulatory Authority chief executive officer, Ibrahim Kaddunabi Lubega, talks about the sector’s performance, outlook, projections, trends and more in 2025

Insurance remains a key part of Uganda’s financial system. The low penetration notwithstanding, the sector offers an array of opportunities, which Insurance Regulatory Authority chief executive officer Ibrahim Kaddunabi Lubega, says strengthens actual performance, outlook, and trends in the sector. 

Could you give us a few insights on the sector?

The insurance sector has seen significant growth in premiums, notwithstanding the low penetration of under 1 percent.

The sector is projected to grow to about Shs1.5 trillion in gross written premiums. This represents a compound annual growth rate of 7.4 percent from 2018 to 2024. This is an indication of an increase in awareness of insurance among Ugandans.

The adoption of digital technologies remains key to enhancing customer experiences and service delivery, helping the industry remain competitive.

In 2024, insurance continued to register robust growth rates in the first three quarters of the year, with total gross written premium growing to Shs1.39 trillion in the third quarter from Shs1.23 trillion recorded over the same period in 2023.

This was a 13.51 percent growth. We expect that after analysing the third quarter of the year's performance, this year’s performance will exceed last year’s because we have seen heightened business activity, which translates into more insurance products or services being consumed.

What were some of the sector's highlights in 2024?

There were a number of key highlights, among which included the launching of the local marine insurance platform on November 6, 2024. Local marine insurance is expected to become mandatory effective February 01, 2025.

It is expected to ease access to insurance services locally compared to what importers have been going through to secure policies from foreign firms.

In addition to curbing capital outflows and generating more revenue for government, the platform will ease claim processing in case of a loss, thus ensuring that businesses recover swiftly and continue their operations with minimal disruptions in case of cargo loss or damage.

Secondly, we have observed ongoing product innovation in the industry as companies adapt to the constantly changing needs of customers.

Many have adopted digital platforms, such as online transactions to make insurance services more accessible and user-friendly. The integration of technology to meet the increasing demand for efficient, seamless transactions has helped attract a wider range of clients. 

There has also been enhanced collaborations with the Parish Development Model programme to sensitise farmers that receive PDM funds to take on insurance for their agricultural projects to safeguard against unforeseen risks given that agro-enterprises are susceptible to natural calamities such as prolonged drought, excessive rainfall, unpredictable weather changes, and pests and diseases that have seen farmers suffer huge losses.

Last, but not list, as Insurance Regulatory Authority, we are proud to have opened regional offices in Mbale, Mbarara, and Gulu, which will enable us to take insurance services closer to the people.

The industry also continued to be attractive to players, especially under the new distribution channels. For instance, we issued bancassurance licenses to two new players this year – Pride Micro Finance and Finca, which offers customers more alternatives and gives the sector the momentum it needs to grow. 

Would you give us your projections for the sector this year?

We project continued positive developments driven by expected public sector investments in engineering and construction in 2025, which will support industry growth. Additionally, following the launch of the local marine insurance platform, we expect more premiums from importers across the country.

Ugandan is a net importer, and every year billions worth of goods are imported into the country. Previously, all importers have been purchasing insurance from foreign insurers in the countries of importation, which has been draining our industry and economy significant amounts of money.

In its 2015 report, the Inter-Government Standing Committee on Shipping, noted that government lost revenue worth Shs60.3b as value added tax and Shs35b as stamp duty through insurance of imports by foreign insurers between 2009 and 2013.

This is money that should remain within the country to foster economic growth and development.

Furthermore, we also project increased public trust, arising from prompt claims payment and complaints handling, which we anticipate will encourage more Ugandans to take up insurance services. 

For instance, Shs658.92b was paid out in total claims in the third quarter of 2024 which is 47.24 percent of the total gross written premiums, compared to Shs479.88b, which was paid in quarter three of 2023.

I would like to assure the public that payment of genuine claims will continue because that is the reason we exist.

What would you tell Ugandans who don’t see insurance as an important sector?

Insurance, as a means, protects both life and property. Life presents so many unforeseen risks, which have the potential to wipe out all that we own, and have built for years.

Thus, it is prudent that we embrace insurance so that we can protect ourselves from risks, and when they happen, we have the potential to rebuild.

While problems cannot be predicted, they can strike unexpectedly, potentially plunging you back into poverty in an instant.

Insurance ensures that, in the event of such risks, the affected individual is swiftly restored to the position they were in before the incident occurred.