Uganda's insurance industry registered robust growth rate in 2023 on the back of enhanced insurance customer confidence, improved distribution channels, and growth in online transactions, says the Insurance Regulatory Authority of Uganda (IRA) in a statement.
Statistics released last week by the IRA indicate that the industry’s gross written premiums grew by 11.29% to UGX1.6tn ($433m) in 2023 from UGX1.44tn in 2022. Growth in 2024 is also expected to be in the double digits.
Speaking during a press briefing, IRA CEO, Mr Kaddunabbi Ibrahim Lubega, said that enhanced claims payment, consumer empowerment, and strengthened complaints redress mechanisms provided by the Authority had increased customer confidence in the sector, leading to increased uptake of insurance services.
The other factors that led to industry growth were higher demand for online transactions, enhanced distribution channels, and growth of Uganda’s middle-class population.
Of the UGX1.6tn total underwritten premiums in 2023, the non-life business segment generated UGX932bn, up from UGX898bn in 2022 while the life insurance segment generated UGX611.4bn compared to UGX501.6bn in 2022.
Health membership organisations (HMOs) generated UGX56.3bn of the gross written premiums, up from UGX38.2bn in 2022 while microinsurance generated UGX707m, up from UGX611m in 2022.
-
|
Type
|
GWP
|
Market share
|
|
2023
|
2022
|
Y-oY Change
|
2023
|
2022
|
|
Life
|
611.4
|
501.6
|
21.9%
|
38.2%
|
34.8%
|
|
Non-life
|
932.0
|
898.1
|
3.8%
|
58.2%
|
62.4%
|
|
HMO
|
56.3
|
38.3
|
47.0%
|
3.5%
|
2.7%
|
|
Microinsurance
|
0.7
|
0.6
|
16.7%
|
0.1%
|
0.1%
|
|
Others*
|
-
|
2.1
|
-
|
-
|
-
|
|
Total
|
1,600.4
|
1,440.7
|
11.1%
|
100.0%
|
100.0%
|
|
Source: Insurance Regulatory Authority of Uganda
*Foreign Reinsurance Business Ceded to Reinsurers
|
The statistics show that in 2023, the life business segment grew faster than the non-life segment, at 21.9% compared to 3.8% growth recorded by non-life.
Mr Kaddunabbi said that the target is 70% of the industry’s gross written premiums contributed by life business. In 2023, this contribution was 38%.
He said that growing the life insurance segment is essential for Uganda as the collected premiums provide the needed long-term funds for investment.
“The faster rate of growth in life indicates a positive trend towards individuals prioritising long-term financial security and protection,” he said.
HMOs expanded their business the fastest among the various branches, with a growth rate of 47% in 2023. Mr Kaddunabbi explained that this shows that people are slowly shifting from paying out-of-pocket for medical services.
“This is promising; we will support it further by making new interventions to increase the uptake of medical insurance,” he added.
Double-digit growth expected in 2024
Mr Kaddunabbi is optimistic that 2024 will be even better because inflation has been contained at an average rate of 3.2% in the 12 months that led to May 2024, while the annual headline inflation was reduced from the peak of 10.7% in October 2022 to 3.6% by May 2024.
He noted that this stable macroeconomic environment provides a good investment climate and impacts positively on people’s purchasing power.
The other factors projected to support sector growth are public sector projects, innovations such as marine insurance, and enhanced public trust, among others.