Uganda's insurance industry raised shs1.6 trillion in gross written premiums in the year 2023, the regulator, Insurance Regulatory Authority has said.
The shs1.6 trillion represented a 11.29% growth, compared to the shs1.4 trillion collected the previous year.
Al Haj Ibrahim Kaddunabbi Lubega, the Chief Executive Officer of Insurance Regulatory Authority (IRA ) said these figures show continue resilience of the insurance sector in Uganda.
"This surge reflects heightened business activities, underscoring the sector's resilience and its pivotal role in the country's economic landscape,"Kaddunabbi said.
Market concentration
According figures by Insurance Regulatory Authority, non-life insurance accounted for 58.14% of the aggregate industry written premiums which was 4.20 percentage points lower than the market share index of 62.34%in 2022.
On the other hand, life business accounted for 38.14% of the aggregate industry written premiums.
This was 3.32 percentage points higher than the market share index of 34.82% in 2022.
The regulator welcomed this development that he said shows signs of progress.
"The increasing share in life is a key highlight because life insurance is essential in any country as it provides financial security and peace of mind to individuals and their families, ensuring that loved ones are protected from financial hardships in the event of unexpected loss or tragedy," CEO Al Haj Ibrahim Kaddunabbi Lubega said.
The figures also show that Health Membership Organizations accounted for 3.52% of the market share, up from 2.66% in 2022.
In terms of relative growth, Life Insurance business continued to grow much faster than non-life at 21.90% compared to 3.79% of non-life business and HMOs growth by 47.24%.
"The faster rate of growth in life indicates a positive trend towards individuals prioritizing long-term financial security and protection. This shift suggests that people are increasingly recognizing the importance of safeguarding their futures and that of their loved ones, reflecting a growing awareness and readiness to invest in comprehensive financial planning and security measures,"Kaddunabbi said.
The report says that in the year 2023, brokers accounted for shs541.22 billion compared to the shs453.51 billion generated in 2022 representing a 19.34percentage growth.
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This means brokers business accounted for 33.8% of the total insurance premium, an increase by 5.16% from 2022.
On the other side, bancassurance distribution channel accounted for shs179.48 billion compared to shs142.70 billion in 2022 representing a 25.77 percentage growth.
2024 outlook
The regulator says things will only get better in the year 2024.
"Inflation has been contained at an average rate of 3.2 percent in the twelve (12) months leading to May 2024, remaining one of the lowest in the region. Annual headline inflation has reduced from the peak of 10.7 percent in October 2022 to 3.6 percent by May 2024. Such a stable macroeconomic environment is generally favorable for the growth of the insurance sector as it provides a good investment climate as well as impacts positively on the purchasing power of money," the Insurance Regulatory Authority CEO said.
He said with expected public sector engineering or construction related investments in the first half of 2024/25, the impact of innovations such as marine insurance as compliance improves, and enhanced public trust, among others, they project a positive outlook with growth remaining above 10 percent.
