Uganda's insurance sector has continued with its growth trajectory to ensure premiums grow to shs898.10billion representing a 16.5% growth to the half year results released on Thursday.
Results for the same period last year indicated shs711.6billion was recorded in gross written premiums.
According to the half year results, at shs510.1 billion, non-life premiums shored up the growth trajectory.
"This steady growth is worthy acknowledgement because it is a reflection of, among other things, the sector's attraction of more customers (people and businesses) committing more money to purchase of insurance," said the Insurance Regulatory Authority CEO, Al Haj Ibrahim Kaddunabbi Lubega.
The performance
According to the half year results, life insurance business generated Shs291 billion growing from shs 147.3billion in in quarter one representing about 58% of the total shs501.6 billion premiums from life segment underwritten in 2022 .
When compare with premiums from life generated in quarter two of the year 2022 which was at shs242.7billion, there has been a 19.9% growth.
During the same period, Health Membership Organisations generated shs27.3billion growing from shs16.6billion in quarter one representing about 71.3% of the total premiums underwritten by HMOs in 2022 .
"When compared with the corresponding period in 2022 where shs22billion was underwritten, the current performance represents a 24.1% growth," Kaddunabbi said.
The half year results show micro insurance business generated shs462.63million growing from shs 117.51million in quarter one and when compared to the same period last year, there has been a 45.8% growth.
In terms of market composition ,the half year results indicated that non-life insurance accounted for 61.6% whereas life contributed 35.1% of the aggregate industry premiums underwritten until June, 2023.
Claims payouts
According to the IRA CEO, gross claims paid on account of both life and non-life (including HMOs) accounted for 37.6% of the total premiums registered in quarter two of the year 2023 which is an equivalent of shs311.3billion.
This however differs from the 43.7% of the total premiums registered in the second quarter of the previous year.
"We shall continue to examine the trends as the year progresses and ensure that all payable claims are paid, and in good time since paying claims fulfills the promise provide financial protection in times of need and maintains the trust between policyholders and insurers," Al Haj Ibrahim Kaddunabbi Lubega said.
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The half year results also show that gross written premiums collected through brokerage distribution channels rose to shs257billion from shs133.6 billion in quarter one.
These figures account for 31.1% of the total insurance premium underwritten during the period.
On the other side, bancassurance distribution channels contributed to shs83.6 billion up from shs62.1 billion in quarter two of 2022 in gross written premiums, representing a 34.5% growth.
Outlook
The BOU forecast for inflation indicates between 6 to 10% from January to June 2023 with an average of 7.9% during the period.
According to IRA, whereas the reduction in inflation did not revert to the medium-term target of 5%, if sustained, it is likely to catalyze economic growth and demand for insurance.
IRA says there continues to be traction in life insurance, especially individual policies, marine insurance with enforcement expected effective October, 1, motor insurance, public sector investments, PDM, risk awareness, innovation and digitization.
They say in these areas, growth is expected to be generated in the short and medium term.
