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Insurance Sector Posts Record Growth to Shs1.6 Trillion Premium

Haji Ibrahim Kaddunabbi Lubega, the IRA Chief Executive Officer

Uganda’s insurance industry grew 11 percent in 2023, in terms of Gross Written Premiums.

Overall, GWPs, which refers to the total value of insurance policies that clients bought during the period, grew from 1.44 Trillion shillings in 2022 to 1.6 Trillion realized in 2023, a record-breaking growth.

The IRA attributed this high growth rate to its sustained calls to insurance companies for awareness creation about insurance; a growing goodwill amongst different stakeholders, both the private and public sectors; continued innovation as well and improved payment of claims, which attracted public confidence.

While Non-life business continued to dominate the premiums, accounting for 58 percent, it grew by 4 percent, while the highest growth rate was still posted by the Health Membership Organisation, which recorded gross premiums of 56.36 billion shillings.

Life insurance business on the other hand generated the second-largest value of premiums at 606.6 billion shillings and a growth rate of 21 percent.

IRA Chief Executive Officer, Haji Ibrahim Kaddunabbi Lubega, attributed the growth in the two segments to the continuous health self-awareness by Ugandans and the need to invest in their health and the welfare of their dependents.

However, the Microinsurance business declined, generating 559.7 million shillings, 8 percent less than the 611.3 million registered in 2022.

“There is a need to have candid discussions on required practical interventions for this segment,” Lubega said.

The sector, however, encountered challenges, especially to do with safety and security.

It was noted that as technology continues to evolve, helping business operations and product innovation, so are cases of fraud.

The complaints received at the IRA complaints desk also reveal customer illiteracy and mistakes including wrong spellings, that at times end up affecting the effectiveness of the service provider.

The insurance industry leaders have in recent years been pressing for easy and convenient claim payment processes in response to the frustrations exhibited by the public at the insurance companies.

A bigger part of the Ugandan public remains convinced that insurance is there to rip them off because getting compensated for a loss is one hard thing.

IRA admits that this is one of the reasons insurance penetration remains below 1 percent in Uganda.

“Our core mandate as an Authority remains policyholder protection and ensuring that legitimate claims are paid,” said Haji Lubega.

In 2023, Gross Claims paid on account of both life and non-life (including HMOs) accounted for 45.45 percent of the total premiums registered, equivalent to 727.5 billion shillings, compared to 40.25 of total premiums in 2022.

“This 5.2 percent growth in claims paid shows the increased commitment of players to honor their obligations,” the CEO said.

Looking ahead the sector hopes for better business with the economy expected to continue growing, with most growth coming from the oil and gas sector and public investments.

Opportunities are expected from, innovation, possible rollout of the National Health Insurance Scheme, operationalization of IRA regional offices, and increased agriculture insurance, according to IRA.

-URN

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