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The Insurance Regulatory Authority (IRA) has revealed that a significant portion of Uganda’s insurance business is controlled by just five companies, accounting for over 60 percent of the sector’s activity. This revelation came during the 59th meeting aimed at assessing the performance and outlook of the insurance industry for the year 2024. Mr. Ibrahim Kaddunabbi, the CEO of IRA, stressed the importance of considering mergers and acquisitions to foster a sustainable insurance sector in Uganda.
According to Mr. Kaddunabbi, the dominance of these five companies highlights the need for strategic collaborations within the industry. He emphasized that smaller companies, even if they were to merge, would contribute only a fraction of the business compared to the larger entities. Thus, mergers could enable companies to operate more efficiently and competitively while still maintaining substantial market share.
However, Mr. Kaddunabbi did not disclose the specific companies responsible for the majority of premiums nor did he identify those with the least contribution. The insurance sector in Uganda comprises approximately 30 companies, with separate entities for life and non-life insurance businesses.
In terms of written premiums, IRA reported growth in gross written premiums from Shs1.44 trillion in 2022 to Shs1.6 trillion by the end of December 2023, marking an 11 percent increase. Non-life insurance accounted for the largest share of written premiums, with a growth rate of 4 percent to Shs934.5 billion, while life insurance saw a significant growth of 21 percent to Shs606.6 billion.
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Despite the overall growth, Mr. Kaddunabbi expressed concern over the decline in premiums for micro-insurance, which decreased by 8 percent to Shs559.7 million from Shs611.3 million. He highlighted the importance of micro-insurance in serving low-income earners and announced regulatory measures to address this decline and ensure adequate coverage for ordinary citizens.
Looking ahead, the insurance sector is expected to continue its recovery from the disruptions caused by the Covid-19 pandemic. Mr. Kaddunabbi projected a positive outlook for 2024, citing improvements in the macroeconomic environment and expectations of lower inflation. Additionally, the implementation of the National Health Insurance Scheme is anticipated to contribute to sector growth in the coming year.
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