Insurance players tasked on innovations to boost sector growth

Insurance penetration in Uganda has remained below 1 per cent despite several efforts by sector players, including the government.

Despite these challenges, statistics by the Insurance Regulatory Authority (IRA) say the industry has shown robust growth. In 2023, gross written premiums grew by 11.29 per cent to Shs1.6 trillion, with 134 insurance players authorised to transact.

Now, sector players, including insurance brokers, agree that there is a need to intensify efforts to improve public understanding of their services.

Mr Alhaj Kaddunabbi Lubega, the CEO of the Insurance Regulatory Authority of Uganda (IRA), urges insurance companies to embrace digital transformation.

"It is essential to embrace digital transformation to thrive in this competitive landscape. Let us go back to our companies and digitalize our operations. We should not wait for the IRA to issue directives; let us do it voluntarily," Mr Lubega said.

Ms Sarah Siryowe, the general manager at Liaison Uganda (Insurance Brokers) Ltd, emphasises that insurance is not a luxury but a necessity, providing critical financial protection.

She highlights that many Ugandans remain unaware of its importance, contributing to the country’s low insurance penetration.

“One of the major obstacles is the prevalence of myths and misconceptions—many associate insurance with high costs or see it as a luxury reserved for the wealthy. These beliefs have contributed to the country’s low insurance penetration,” she adds.

Ms Siryowe says insurance companies must address this by tailoring affordable products, such as microinsurance, to cater to low-income earners.

Mr Isaac Nabeta, the board chairman of Insurance Regulatory Authority of Uganda (IRA), said as insurance players, they are the custodians of the financial well-being and security of their clients.

“Innovative practices will uphold transparency, clarify decision-making, and strengthen trust, fostering lasting client relationships. Balancing innovation with accountability and ethical behaviour is vital amidst rising scrutiny and expectations within the sector,” he said.

According to Mr Nabeta, this will ensure that we take responsibility for our decisions and foster an environment of continuous improvement whilst responsibly managing inherent risks.

Efforts to improve insurance literacy are also underway and insurance brokers are implementing various initiatives, including workshops, seminars, and online resources, to enhance insurance literacy among Ugandans, focusing on insurance products and risk management.

"We tailor our insurance literacy programs to different demographics by using targeted marketing strategies, collaborating with community leaders, and offering customized products and services that cater to the specific needs of each demographic," Ms Siryowe says.

She says to boost insurance literacy, Liaison Uganda collaborates with schools, community leaders, and government agencies, holding workshops and training sessions.

“These initiatives are designed to help Ugandans understand insurance basics, select appropriate policies, and navigate the claims process,” she adds.

Ms Siryowe underlines that education is key to building trust in the sector and fostering a financially literate society. By addressing common myths and offering transparent information, the company aims to empower consumers and promote informed decision-making.

Beyond individual benefits, insurance is seen as a tool for national development. It mitigates business risks, encourages investment, and reduces dependence on government aid during crises.

“Liaison Uganda aims to overcome these hurdles through innovation, customer-centric services, and partnerships that make insurance relatable and accessible to all Ugandans,” she says.

Ms Siryowe envisions a future where insurance becomes an integral part of financial planning across the country.

She said they support national initiatives aimed at improving financial inclusion and insurance penetration in Uganda.

Finance Minister Matia Kasaija says the government’s commitment to a conducive environment extends beyond regulatory measures.

He says the government has invested in infrastructure, digital connectivity, and education to empower the workforce and facilitate the seamless integration of technological innovations within different sectors of the economy.

“I am glad that the Insurance Regulatory Authority of Uganda (IRA) has recognised that innovations will define the future of the Insurance Industry and drive insurance penetration. This is what all the other regulators should be looking to because regulation without growth is no regulation at all,” Kasaija said.