The insurance industry in Uganda underwrote UGX856 billion (USD227.8 million) in 2018- that is UGX73.60 billion (USD19.6 million) more than the Shs782.4 billion (208.2 million) underwritten in 2017.
This is a 17.5% growth rate, compared to a 14.75% growth rate registered in 2017.
According to a release by the Insurance Regulatory Authority (IRA), the industry watchdog’s Chief Executive Alhaj Kaddunabbi Ibrahim Lubega non-life insurance business income grew from Shs507.2bn in 2017 to Shs570bn in 2018, life insurance business grew from Shs168bn in 2017 to Shs216.9billion in 2018.
Health Membership Organisations (HMO’s) grew from Shs52.7bn in 2017 to Shs69.1bn in 2018 and the licensed dedicated micro insurance organization underwrote Shs24.31million.
Non-life insurance accounted for 66.6% of industry premiums while life and HMOs account for 25.3% and 8.1% respectively.
Innovation-led growth
Kaddunabbi attributed the improved performance to the enhanced distribution channels like Bancassurance which generated Shs26bn and the use of mobile technologies generating Shs5bn.
The IRA has to-date licensed 17 commercial banks as Bancassurance Agents and a number of Insurance Companies have adopted the use of new technological platforms to provide insurance services.
IRA’s Alhaj Kaddunabbi Ibrahim Lubega (right) awards Stanbic Bank’s Patrick Mweheire, the first bancassurance license in October 2017. 14 months and 17 bancassurance licenses later, the new distribution channel has pulled in UGX26 billion in its first full year of operation. Even though just 3% of industry premiums, it is a promising sign of great things to come.
“This growth has also been attributed to the increased Agriculture insurance uptake with Central Region accounting for 39%, Western Region 38 %, Eastern Region 12% and Northern Region accounting for 11%”, said Kaddunabbi advising farmers to take up Agricultural insurance to protect themselves against agriculture related risks such a drought, excess rains etc.
Government introduced the Agriculture Insurance subsidy to make Agriculture Insurance affordable to farmers and increase access to credit by protecting agriculture loans disbursed by financial institutions from the effects of specified risks in agriculture.
Insurance industry ready for oil & gas
Meanwhile the Insurance Consortium for Oil and Gas (ICOG), a co-insurance group currently made up of 14 locally licensed insurance companies have raised over $200m (sh745b) aggregated insurance capacity in readiness for Uganda’s oil and gas industry.
The 14 companies are; APA Insurance, BRITAM, CIC General, Excel Insurance, Goldstar Insurance, Jubilee General Insurance, NIC General Insurance, NOVA Insurance, PAX Insurance, MUA Insurance, SANLAM, Statewide Insurance, TransAfrica Assurance and UAP Old Mutual General.