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Life insurance drives record growth, even as most Ugandans remain outside the formal safety net
Kampala, Uganda | JULIUS BUSINGE | Uganda’s insurance industry reached a historic milestone in 2025 after gross written premiums (GWP) surpassed the Shs2 trillion mark for the first time, signalling a maturing sector that is increasingly becoming an important pillar of the country’s financial system and economic development.
According to the Insurance Regulatory Authority (IRA)’s media statement dated June 26, total industry premiums rose to Shs2.024 trillion in 2025, up from Shs1.764 trillion recorded in 2024, representing annual growth of 14.72%. The strong performance reflects rising public confidence in insurance, improved distribution channels, stronger claims settlement, digital innovation and growing demand for financial protection among individuals and businesses.
Perhaps the biggest story behind the impressive performance is the rapid expansion of life insurance, which has traditionally lagged behind non-life business in Uganda. Life insurance premiums grew by an exceptional 39.21% to Shs977.60 billion in 2025 from Shs702.25 billion the previous year, nearly matching non-life insurance, which generated Shs1.002 trillion after growing by only 1.53% from Shs986.48 billion in 2024.
The changing market composition indicates a significant shift in consumer behaviour, with more Ugandans beginning to appreciate insurance not only as protection against unforeseen losses but also as an important financial planning and wealth preservation tool.
The life insurance segment accounted for 48.31% of total industry premiums in 2025, up from 39.81% a year earlier, while non-life business contributed 49.49%, down from 55.92% in 2024. The narrowing gap suggests Uganda’s insurance market is gradually evolving towards a more balanced structure similar to more developed markets, where life insurance plays a dominant role in mobilising long-term savings.
Insurance analysts say this trend reflects growing awareness about retirement planning, family protection and income security amid increasing economic uncertainty.
Growth drivers
Several factors combined to drive the sector’s strong performance during the year, according to IRA. The continued expansion of bancassurance and brokerage channels made insurance products more accessible to customers, while digital innovation improved customer experience and product delivery.
Premiums generated through the bancassurance channel increased to Shs302.26 billion in 2025 from Shs225.01 billion in 2024, representing growth of 34.33%. The performance demonstrates the growing importance of partnerships between commercial banks and insurance companies in deepening insurance penetration.
Insurance brokers also continued to play a significant role, collecting Shs564.83 billion in premiums during the year, compared to Shs428.45 billion in 2024, representing growth of 31.85%.
Another notable performer was the microinsurance segment, which targets low-income households and small businesses. Premiums increased dramatically to Shs7.33 billion from Shs1.64 billion in 2024, representing growth of 347.86%. Although still relatively small, the growth demonstrates increasing efforts to promote financial inclusion by extending insurance services to previously underserved communities.
Meanwhile, Health Membership Organisations generated Shs30.06 billion in premiums, down from Shs69.90 billion in 2024 following the transition of AAR from a health membership organisation into a non-life insurance company. The regulator noted that the business remains within the insurance industry under the non-life segment.
Claims strengthen confidence
Beyond premium growth, one of the clearest indicators of the industry’s strength is its ability to honour claims promptly.
The IRA reported that insurers paid gross claims amounting to Shs934.55 billion during 2025, representing 46.20% of total gross written premiums. This compares with Shs887.55 billion paid in 2024 and Shs820.47 billion in 2023.
In practical terms, nearly Shs1 trillion was returned to policyholders, beneficiaries, businesses and families affected by insured events ranging from road accidents and fires to medical emergencies and death.
Higher claims payments are generally viewed as a positive signal because they reinforce confidence that insurance works when policyholders need it most.
IRA described the industry’s performance as evidence of increasing resilience and public trust.
“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—signs of growing public confidence and a greater role in economic transformation and financial inclusion. As regulator, we remain committed to a stable, innovative, inclusive and consumer-focused market that protects policyholders, promotes investment and supports national development,” the authority said.
Strong foundations
The industry’s financial position remained solid throughout the year. Total assets increased to Shs3.459 trillion, reflecting insurers’ growing capacity to underwrite larger risks, support investment and contribute to economic growth.
The sector also maintained strong capital adequacy ratios of 250% for life insurers and 266% for non-life insurers, well above the regulatory minimum requirement of 200%. These levels indicate that insurance companies remain financially capable of meeting policyholder obligations even during periods of economic stress.
The regulator attributes the sector’s resilience to ongoing regulatory reforms, stronger corporate governance, improved market conduct and enhanced consumer protection measures.
Digitalisation has also become an increasingly important growth driver, enabling insurers to reduce costs, improve service delivery and reach previously underserved customers through technology-enabled platforms.
Speaking at the 4th Annual Insurance Agents Association convention in Kampala in May, David Wandera of Absa Bank Uganda said the industry must rethink its core purpose beyond policy sales and focus on real-world protection. “We are living through a defining shift,” he noted, pointing to changing customer expectations and evolving risks. “The real test of insurance is what happens when things go wrong,” he added, stressing that the true value of the sector is only revealed in moments of crisis.
Wandera also highlighted the gap between headline growth and actual coverage, noting that “for every Shs 1,000 spent in the economy, less than Shs 9 goes towards insurance,” underscoring how limited protection remains for most households. While the sector has continued to expand in premiums, insurance penetration has remained at around 1% for many years, reflecting a persistent structural gap between growth in value and reach across the population.
Looking ahead
The outlook for Uganda’s insurance industry remains positive. The regulator projects overall premium growth will remain above 10% in 2026, supported by stable macroeconomic conditions, controlled inflation and sustained government investment in infrastructure and industrialisation.
Opportunities are expected to emerge from major national projects, including the Standard Gauge Railway, preparations for AFCON, oil and gas developments, mining, manufacturing and expanding energy infrastructure. These investments will generate demand for construction, engineering, marine, liability and operational insurance products.
At the same time, expanding trade, agriculture, financial inclusion initiatives and digital insurance platforms are expected to increase insurance uptake among households and businesses.
Despite the encouraging progress, Uganda’s insurance penetration remains relatively low compared to regional and global averages, indicating significant room for expansion.
Industry players believe improving public awareness, developing affordable products and leveraging digital technology will be critical in bringing more Ugandans into the insurance ecosystem.
