Gross written insurance premiums have grown to just over Shs 1 trillion, the highest ever. The announcement was made by Ibrahim Kaddunabbi Lubega, the chief executive officer of the Insurance Regulatory Authority (IRA) of Uganda.
This was during a breakfast meeting held at Serena Hotel, Kampala. Kaddunabbi said, “The industry remained on a positive growth trajectory in the third quarter of 2022. The total gross written premium grew from Shs 912 billion in the third quarter of 2021 to Shs 1.08 trillion in the third quarter of 2022. This reflected an 18.57 per cent growth over the same reporting period although we (IRA) had projected a 15 per cent growth.”
During the same reported period, non-life business accounted for 58.5 per cent of the aggregate industry written premiums (Shs 632 billion). Life business accounted for 32.5 per cent of the aggregate industry written premium in the reporting period (Shs 351.3 billion).
The rest of the classes combined (Dedicated Health Insurers, Micro insurers etc) accounted for nine per cent of the aggregate premiums underwritten. This, Kaddunabbi explained, was fair since non-life is never the biggest contributor to gross written premium in developed economies.
Commenting on the general sector growth, Kaddunabbi partly attributed it to the significant improvement in the settlement of claims. He added that “Our core mandate remains policyholder protection and ensuring that legitimate claims are paid in time. At least Shs 476.52 billion was paid out in gross claims during the period, accounting for 44.1 per cent of the industry’s total premium compared to Shs 363.15 billion, which was paid in quarter three of 2021.”
Among the intermediaries, brokers collected Shs 367.6 billion as gross written premiums, accounting for 27.5 per cent of the total insurance premium during the third quarter of 2022. Under the Bancassurance distribution channel, Shs 102.44 billion compared to Shs 74.73 billion in September 2021 was collected.
This represented a 37 per cent growth. This growth was attributed to the increased adoption of the bancassurance channel as a one-stop Centre for financial services. It is expected to continue growing in the future.
To tap into the large agriculture base, Kaddunabbi expressed the desire to recruit over 10,000 extension workers as agriculture agents spread out in different parts of the country. These agents, he said, would be able to support the penetration of agriculture insurance.
According to Uganda’s 2021 insurance sector performance report, 75,868 farmers received an agricultural insurance cover, generating a premium of Shs 19.8978 billion, an increase from 54,287 farmers who generated Shs 11.426 billion in premium in 2020. Also, the total claims paid for agriculture insurance increased to Shs 7.505 billion in 2021 from Shs 4.116 billion in 2020.
Source: The Observer