Only nine insurance companies recorded approximately Shs40bn as profit
Kampala, Uganda | ISAAC KHISA | Only nine out of 21 Non-life insurance companies operating in Uganda made profits for the year ended Dec.2018, data from the Insurance Regulatory Authority of Uganda shows.
Jubilee, UAP, Sanlam, Britam, Goldstar, Alliance Africa, Statewide, Excel and Rio insurance companies are the only insurance firms that have recorded increase in their profits, with majority registering a double digit growth.
Market leader Jubilee recorded a 69% growth in profit to Shs17.8bn followed closely by UAP and Sanlam that recorded a 122% and 450% growth in their profits to Shs10.8 and Shs5.5bn, respectively during the period under review.
Britam, too, recorded a 114% growth in profit to Shs2.98bn while Goldstar recorded a 27% reduction in profits to Shs1.5bn in 2018.
On the other hand, four loss making insurance firms managed to record profits in 2018. These include; Alliance Africa that came from a loss of Shs 475million in 2017 to Shs 680million profit in 2018.
Similarly, Statewide insurance emerged from a loss of Shs 474million to a profit of Shs 176million while Excel insurance from Shs313million loss to Shs115.9million profit during the same period under review.
Rio, which recorded a loss of Shs 130million in 2017 managed to rake in Shs 30million in 2018.
Collectively, the nine insurance companies managed to record about Shs40bn in 2018 as profit.
However, Ibrahim Kaddunabi Lubega, the CEO at IRA said during the insurance industry’s CEO breakfast meeting at the Kampala Serena Hotel on May.23 that the remaining 12 firm firms that recorded losses does not mean that they are in bad shape and unable to meet their customer obligations.
“It only means that these companies need to look into their strategies to boost their performance going forward,” he said.
This development comes as the country’s insurance industry recorded a 17.5% growth in gross underwritten premiums to Shs856bn in 2018. Off this, non-life insurance companies recorded a 12% growth in premiums to Shs569.9bn while life insurance business recorded a 28.6% growth in premiums to Shs216.9bn.
Health Membership Organisations that include, among others, Case Medical Clinics, International Air Ambulance and AAR recorded a 31% growth in profit to Shs69.1bn during the same period under review.
The insurers net asset base increased by 11% from Shs 458bn in 2017 to Shs 508bn in 2018 signalling a growing strength of companies to handle more insurance risks locally as well as provide adequate protection to the insuring public.
The claims payment, which is the core value that the insurance industry offers to the policy holders and beneficiaries, increased by 11.9% to Shs326.7bn.
Similarly, insurance penetration, too, increased from 0.81% to 0.84% during the period under review but remains low compared with rest of the countries in the region. Kenya’s insurance penetration stands at 3.4%, Tanzania’s 2.3% and Rwanda at 1%.