Uganda's insurance sector posts 12% growth in 2024 - report
Average Insurance spending has risen in Uganda. PHOTO/FILE
What you need to know:
- The Ugandan insurance sector demonstrates "remarkable resilience and growth," the report shows.
Uganda's insurance sector experienced a robust 12.04 percent growth in gross written premiums in 2024 compared to the previous year, reaching approximately Shs1.79 trillion (around $485 million), according to a new report by the Insurance Regulatory Authority (IRA).
The micro-insurance segment led this expansion with an impressive 67.40 percent increase. While non-life insurance held the largest market share at 54.53 percent, its growth was slower at 4.5 percent.
Life insurance continued its strong performance with a 22.47 percent growth, and Health Maintenance Organisations (HMOs) also saw significant expansion at 24.01 percent.
Kenbright Actuarial Advisory had predicted this trend, with the overall insurance penetration rate rising slightly to 0.883 percent in 2024 from 0.867 percent in 2023. The average annual spend on insurance per Ugandan also increased from Shs34,931 to Shs39,011.
UAP Old Mutual recorded the highest non-life insurance premium at Shs184.9 billion, followed by Sanlam.
Motor, fire, and health insurance constituted over 61 percent of non-life insurance expenditure. Fire insurance saw the highest growth in this category at 15.2 percent, while engineering and bond insurance premiums decreased.
In the life insurance sector, Prudential Life led with Shs196.3 billion in premiums, followed by UAP Life. Individual life and health insurance accounted for over 68 percent of life insurance spending. Notably, investments in unit trusts saw a significant 53.9 percent growth in the fourth quarter of 2024.
Ernest Magezi Barusya, CEO of Kenbright Actuarial Advisory, attributed the sector's growth to the IRA's "conducive environment."
Ernest Magezi Barusya, CEO of Kenbright Actuarial Advisory. PHOTO/COURTESY
He highlighted the significant increase in gross written premiums from Shs500 billion in 2014 to Shs1.79 trillion in 2024.
"An annual growth rate of 27.25 percent for the life insurance business over a period of 10 years has had a significant impact on the overall insurance industry growth," Barusya told Monitor.
While acknowledging the low insurance penetration rate of under one percent, Barusya explained that "the country does not entirely depend on insurance as a contributor to the GDP," with other sectors like agriculture and tourism playing major roles.
However, he believes that government initiatives such as the National Health Insurance Scheme and agricultural and oil & gas consortiums could boost penetration.
"Penetration rate increases where there is higher acceptance of insurance and in places where insurance is mandatory. We just need to continue improving it to catch up with the likes of South Africa which is at 13.07 percent," he said.
Insurance density, the average spend per Ugandan, has risen from Shs13,781 in 2014 and is projected to exceed Shs39,011 in 2024.
"That is a good step ahead showing better willingness to spend more of their income on insurance," Barusya stated, while cautioning that density figures don't reflect the actual number of policyholders.
Looking ahead, Barusya anticipates potential mergers and acquisitions due to regulatory requirements like Risk-Based Capital and IFRS17.
"Under Risk-Based Supervision, insurance companies are required to maintain capital equivalent to twice the amount of risks they hold... this framework should give confidence to the market that the insurance industry remains safe and capable of settling any payable claim," he explained.
Barusya emphasized that risk-based supervision "protects policyholders, ensuring that the insurance market remains solvent and reliable."
The Ugandan insurance sector demonstrates "remarkable resilience and growth," the report released in March 2025 concludes.
While challenges like low penetration and capital requirements exist, the sector's upward trend is attributed to a strong regulatory environment, increasing consumer awareness, and market innovation.
The focus for 2025 includes “enhancing digitalization, promoting innovation, improving affordability and ease of access to insurance services, and prioritizing environmental, social, and governance (ESG) factors for long-term sustainability.”
