Over the past five years, Uganda’s insurance industry has continued to register growth in the underwriting premiums due to a surge in consumer confidence in the sector and so is the adoption of insurance as a reliable risk management tool. The non-life insurance products continued to dominate the industry, accounting for 76% compared with 16.3% for life and 7.7% for Health Membership Organizations (HMOs).
Significant premiums were realised from the ongoing infrastructural developments in the country including Karuma, Isimba, Entebbe Airport expansion, Entebbe Express Highway, Jinja Bridge, various dams and road projects. Insurers’ asset base saw an 18% growth, which shows a growing strength of companies to handle insurable risks locally and provide adequate protection to the insuring public. Gross claims paid for non-life insurance rose from Shs 184 billion to Shs 214 billion in 2015, representing a growth of 16%.
On the agriculture insurance product dubbed ‘Kungula Agrinsurance,’ which was unveiled in 2014, Kaddunabi said the government has put a side Shs 5 billion in the forthcoming national budget as subsidies to farmers to enable them undertake agriculture insurance products. He said another Shs 5 billion has been earmarked to benefit farmers as subsidies in the subsequent financial year. ‘Kungula AgrInsurance’ is packaged as two sub-products: Livestock All Risks Mortality (ARM) Insurance and Crop Indexed Insurance. With the new fund, farmers with less than five acres of farm land will get a 50% subsidy while those owning more than five acres will be entitled to a 25% subsidy of premiums on their insurance policies.
A group of six insurance companies – Lion Insurance, APA, UAP, FICO, NIKO and NIC – with financial support from Agribusiness Initiative (aBi) Trust – introduced the agricultural insurance product, with a planned investment of Shs 350 million to help farmers cope with devastating weather shocks but its uptake has been slow. Still on the innovation front, AIG, a property-casualty and general insurance firm, last year unveiled a Cyber Edge policy, an insurance product designed to protect customers against the full potential impact of a cyber-breach.
The solution covers financial, legal, investigative, and reputation exposures from a single premium. Similarly, IAA Insurance, introduced a new individual/family package dubbed ‘Taasa’ to ensure majority of the population benefits from health insurance. The product provides the customers with inpatient (in case of hospitalization) and outpatient (normal checkup and treatment visits to a doctor/health facility) services at designated hospitals and clinics.
And in 2014, AON and Jubilee partnered with MTN Uganda to introduce MTN LifeCare, a low-cost life insurance policy. According to KPMG, African countries including Uganda have one of the fastest-growing insurance industries in the world and therefore present an opportunity for investors.