Life insurance surges as Uganda’s insurance industry tops Shs2 trillion

Kampala — Uganda’s insurance market is undergoing a significant transformation, with life insurance recording unprecedented growth that has nearly matched the country’s traditionally dominant non-life business as total industry premiums exceeded Shs2 trillion for the first time.

Figures released by the Insurance Regulatory Authority (IRA) show gross written premiums grew by 14.72 percent to Shs2.024 trillion in 2025, up from Shs1.764 trillion in 2024, reflecting rising demand for insurance products and growing public confidence in the sector.

However, the standout performer was life insurance, whose premiums jumped 39.2 percent to Shs977.6 billion from Shs702.3 billion a year earlier. The rapid growth narrowed the gap with non-life insurance, which generated Shs1.002 trillion after expanding by just 1.5 percent over the same period.

The shift marks one of the most significant changes in Uganda’s insurance industry in recent years, with life insurance now accounting for 48.3 percent of total industry premiums, compared to 39.8 percent in 2024. Non-life insurance’s market share fell to 49.5 percent from 55.9 percent.

The trend suggests that more Ugandans are increasingly embracing life insurance products for retirement planning, family protection and long-term savings, moving beyond the traditional focus on motor, fire and property insurance.

Industry analysts say the changing composition mirrors the evolution of more mature insurance markets, where life insurance plays a central role in mobilising long-term domestic savings that can be channelled into investment and economic growth.

The sector’s expansion was supported by stronger distribution networks, particularly bancassurance partnerships between banks and insurance companies.

Premiums generated through bancassurance rose by 34.3 percent to Shs302.3 billion, while insurance brokers collected Shs564.8 billion, up 31.9 percent from the previous year.

Microinsurance, which targets low-income households and small businesses, also posted the fastest growth, with premiums rising more than fourfold to Shs7.3 billion, reflecting growing efforts to extend insurance services to previously underserved communities.

The industry’s financial position also strengthened during the year. Total assets rose to Shs3.459 trillion, enhancing insurers’ capacity to underwrite larger risks, finance investments and support economic activity.

The regulator said insurers remained well-capitalised, with capital adequacy ratios of 250 percent for life insurers and 266 percent for non-life insurers, comfortably above the statutory minimum of 200 percent. The strong capital buffers indicate that insurance companies are well-positioned to meet policyholder obligations even during periods of economic stress.

IRA attributed the sector’s resilience to continued regulatory reforms, improved corporate governance, stronger market conduct and enhanced consumer protection. The regulator also cited digital transformation as a key driver of growth, saying technology is helping insurers lower operating costs, improve customer service and expand access to insurance products.

The improved performance was also reflected in claims settlement.

Insurance companies paid out Shs934.6 billion in claims during the year, up from Shs887.6 billion in 2024, meaning policyholders received nearly Shs1 trillion in compensation for losses arising from accidents, fires, illness, death and other insured risks.

Speaking at the fourth Annual Insurance Agents Association convention in Kampala in May, Absa Bank Uganda’s Head of Bancassurance, David Wandera, said the industry should shift its focus beyond selling policies to delivering meaningful financial protection.

“We are living through a defining shift,” Wandera said, noting that changing customer expectations and emerging risks require insurers to rethink their role.

“The real test of insurance is what happens when things go wrong,” he added, arguing that the sector’s value is ultimately measured by its ability to support customers during times of crisis.

Despite the strong growth in premiums, Wandera noted that insurance penetration remains low.

“For every Shs1,000 spent in the economy, less than Shs9 goes towards insurance,” he said, highlighting the gap between the industry’s financial growth and the proportion of Ugandans covered by insurance.

Insurance penetration has remained at about one percent for several years, well below regional and global averages, suggesting substantial room for market expansion.

Looking ahead, IRA projects the industry will sustain premium growth of more than 10 percent in 2026, supported by stable macroeconomic conditions, easing inflation and continued government investment in infrastructure and industrialisation.

The regulator expects major projects such as the Standard Gauge Railway, preparations for the 2027 Africa Cup of Nations, oil and gas developments, mining, manufacturing and energy infrastructure to drive demand for construction, engineering, marine and liability insurance.

At the same time, expanding trade, agriculture, financial inclusion programmes and digital insurance platforms are expected to increase uptake among households and businesses.

“Uganda’s insurance sector grew stronger and more resilient in 2025, driven by robust life insurance growth, strong capital adequacy, rising assets and increased claims payments,” IRA said.

The authority added that it remains committed to building a stable, innovative and inclusive insurance market that protects policyholders, promotes investment and contributes to Uganda’s economic transformation.