Nine Life Assurance Companies, in 2018 underwrote UGX216.88 billion, nearly 4 times the amount of business the sub-sector underwrote in 2013- a year before the regulator took a strategic decision to separate life and non-life insurance businesses, in September 2014.
Since then the life business, as it is known has grown by leaps and bounds, attracting 3 new regional and global players and raking up more premiums.
Life insurance gross written premiums grew by 28.69%, from UGX168.53 in 2017 to UGX216.88 billion in 2018. The previous year, it grew by 27.19% from UGX132.5 billion.
By comparison, the entire insurance industry grew by 17.51% in 2018 and 14.75% the year before that. In fact, in 2018 life insurance outgrew entire industry for the 5th straight year.
Non-life insurance business income grew by 12.36% from Shs507.2bn in 2017 to Shs570bn in 2018, While Health Membership Organisations (HMO’s) grew by 31.25 % from Shs52.7bn in 2017 to Shs69.1bn in 2018.
Consequently, life’s industry contribution has consistently risen from 12% in 2013, growing year on year to 25.3% in 2018, eating into both into HMOs and non-life.
As a result, non-life insurance contribution to the entire sector has reduced from 76% in 2015 to 66.6% while HMOs has reduced from 12% in 2013 to 8.1% in 2018. Medical Insurance is a major component of life insurance- accounting for 14% in 2017- UGX24bn of the UGX169bn life premiums went to medical insurance.
Life insurance is composed of 4 major products: life individual- the most dominant, followed by life group, medical insurance and Deposit Administration Plan (DAP).
Who are the leading players in life insurance?
The Life assurance business is a fairly balanced with the top 5 out of 9 companies holding significant portfolios all running neck to neck.
UAP Life Assurance, the industry leader with a 22% market share, grew premiums written by 8.25% from UGX44.13 billion in 2018 to UGX47.77 billion in 2017.
Liberty Life Assurance, although it posted a 5.54% decline in premiums- from UGX37.56 billion to UGX35.48 billion, it remained the second-biggest life assurance company with a market share of 16.36%.
Sanlam Life in the 3rd position and a market share of 16.22%, increased their premiums by a whopping 41.86% from UGX24.8 billion to UGX35.18 billion- just a few million behind Liberty Life.
ICEA Life Assurance, in the 4th position and with 15.4% market share grew their premiums by 21%, from UGX27.59 billion to UGX33.38 billion.
Jubilee Insurance grew by 27.73% from UGX21.66 billion to UGX27.66 billion and occupies the 5th place.
Prudential Assurance, which in June 2015 acquired the life business of Goldstar Insurance, registered a 190.49% growth in premiums, nearly tripling the UGX6.96 billion premiums in 2017 to UGX20.24 billion.
New players, CIC Life which entered the Uganda Market in 2014 and Metropolitan Life which entered Uganda in 2017 are in the 7th and 8th positions.
CIC Life in grew picked up UGX9.9 billion in premiums while Metropolitan picked up UGX5.17 billion. NIC Life is in the last position with just UGX2 billion in 2018 premiums.
Liberty Life to pull out of Uganda
Liberty Holdings, the parent company of Liberty Life has indicated, it is exiting Uganda this year over what it calls “mixed results” over the years, “impacted by sub-optimal scale across most product offerings” as well as high operational risks relative to potential returns and market challenges that among others included competitor practices and immature product categories.
Liberty has also indicated it is leaving Malawi and Tanzania over the same reasons.
The Liberty Group, a South African insurance firm, has put on sale its Kenyan investment advisory business, Stanlib, which has Sh135 billion worth of assets under its management. Liberty Holdings in Uganda, other than Liberty Life Assurance also owns Stanlib Uganda- which will also be sold.
Projections for 2019 look even rosier, if Q1 industry figures are to go by. Premiums for Q1 grew by 30.71% from UGX48.53 billion in Q1, 2018 to UGX63.43 billion in Q1, 2019. The industry on the other hand registered a 9.1% growth. Total industry premiums grew from UGX260.5 billion in Q1, 2018 to UGX284.12 billion in Q1, 2019.