Uganda’s insurance sector must embrace affordable and convenient digital payment systems if it is to boost penetration and win public trust, Bank of Uganda Deputy Governor, Dr Augustus Nuwagaba, has advised.
Speaking at the CEO Conference organised by the Insurance Regulatory Authority (IRA), Nuwagaba emphasized the need for customer-centric innovation, pointing out that payment convenience is now a central driver across industries.
“Markets today are demanding convenience, and many sectors are responding through digitisation,” he said. He cited Kenya as a regional example, where vehicle owners can pay comprehensive insurance premiums in up to 12 installments, compared to Uganda’s rigid lump sum system.
Presenting findings from a recent survey by his firm, Reev Consult, Nuwagaba said public perception and limited access to flexible insurance products remain major barriers to deeper insurance uptake in Uganda, where penetration lags at just 0.8 percent of GDP.
Insurance penetration is defined as the ratio of underwritten premiums to a country’s gross domestic product. Uganda’s rate remains among the lowest in the region.
According to the survey, other key limitations include poor public understanding of insurance, negative experiences during claims processing, and lack of confidence in the system.
Nuwagaba challenged the industry to adopt innovative products and processes, noting that countries with higher penetration have earned public trust by putting customer needs at the centre of service delivery.
He also urged the Ugandan government to lead by example by insuring public assets like vehicles and buildings, which could significantly boost the sector’s revenue.
“The lack of government participation in insurance has cost the industry significant premiums,” he said. He also lamented the slow progress of the proposed National Health Insurance Scheme, which he noted has already been successfully implemented in neighbouring countries.
In response, IRA Chief Executive Officer, Ibrahim Kaddunabbi Lubega, acknowledged the challenges but expressed optimism. He reported that the industry is growing steadily, with underwritten premiums reaching UGX 1.7 trillion last year and an annual growth rate of about 11 percent.
He added that engagements with government on public asset insurance are ongoing and that the National Health Insurance Scheme Bill is currently under cabinet review. He welcomed Dr Nuwagaba’s support, expressing hope that his new role in the central bank would help push key reforms forward.