Uganda’s insurance gross written premiums grow to Shs1.4 trillion

Uganda’s insurance industry posted improved growth in gross written premiums and paid out more claims in 2022, a sign that the sector is recovering from Covid-19 impact.

According to 2022 sector report released on Wednesday, the industry’s Gross Written Premiums (GWP) grew to Shs1.425 trillion in 2022 from Shs1.183 trillion in 2021.

This implies a 20.4 per cent growth from 10.61 per cent in 2021 and 9.34 per cent in 2020 .

The Insurance Regulatory Authority (IRA) Chief Executive Officer, Ibrahim Kaddunabbi Lubega, while presenting the report on Wednesday, said of the 1.425 trillion Shillings, 818.7 billion went to insure non-life businesses, representing a market share of 57.7 per cent.

“Of the 1.425 trillion, Non-life business generated UShs 818.7billion in GWP (up from UShs 706.7billion in 2021) representing a 15.8% growth in premiums and accounting for 57.7% of the market share (59.8% in 2021). The growth rate in premiums of 15.8% registered in 2022 is Significantly higher than the 6.25% which was registered in 2021,” he said.

“Life insurance business on the other hand generated UShs 485.8billion in GWP in 2022 (up from UShs 397billion in 2021) representing a 22.3% growth in premiums and accounting for 34.1% of the market share (32.3% in 2021). Similarly, the growth rate in life premiums of 22.3% registered in 2022 is significantly higher than the 11.7% which was registered in 2021,” he added.

Non-life insurance covers property, businesses and individuals against losses. On the other hand, Life Insurance guarantees that the insurer pays a sum of money to one or more named beneficiaries when the insured person dies in exchange for premiums paid by the policyholder during their lifetime.

“Life insurance business on the other hand generated UShs 485.8billion in GWP in 2022 (up from UShs 397billion in 2021) representing a 22.3% growth in premiums and accounting for 34.1% of the market share (32.3% in 2021). Similarly, the growth rate in life premiums of 22.3% registered in 2022 is significantly higher than the 11.7% which was registered in 2021,”

Insurance Regulatory Authority (IRA) Chief Executive Officer, Ibrahim Kaddunabbi Lubega

However, there was a decline in business under the micro-insurance services, which largely serve low-income earners, with some products allowing one to deposit as little as 1,500 Shillings at a time. Gross premiums written under this amounted to 611 million, down from 657 million Shillings, the decline being attributed to harsh economic conditions that mainly affected the lower earners.

This, according to the CEO, is one of the main challenges because the low-income earners need insurance more than the richer communities, the reason the insurance companies are being encouraged to innovate in low-cost products and making transaction costs lower.

As of the end of 2022, more than 2.475 million Ugandan individuals and corporates were covered in one way or another, meaning that 4.5 per cent of the population had a form of insurance. It also means that on average, every Uganda is now insured to a total of 31,315 shillings, up from 28,059 Shillings in 2021.

During the year, a total of 618.7 billion was paid out to successful claimants, compared to 564.8 that was paid out in 2021. The IRA was particularly excited at the performance of agriculture insurance which is subsidized by the government, where 374 billion shillings was insured.

By the end of the year, according to records, some 665,000 farmers were insured to a cumulative total premium of 2.2 trillion Shillings. Over the year, 11.4 billion Shillings were collected in gross written premiums while 8.8 billion Shillings were paid out to farmers who incurred losses in different forms.

Kaddunabbi said they are urging the government to increase the subsidy from the current annual five billion Shillings so that the farmers can insure their crops throughout the year.