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Uganda’s insurance industry grew faster in the third quarter of 2022 than had been earlier projected.

Figures released by the Insurance Regulatory Authority of Uganda (IRA) at a media briefing held at the Insurance Tower on November 21, indicate that the industry grew by 18.57% as at the end of September, surpassing the 15% growth rate that had been projected earlier.

This impressive growth saw the industry’s Gross Written Premium increase to UShs1.08 trillion as at the end of September 2022, up from UShs912 billion posted over the same period in 2021.

With the higher-than-expected growth rate posted during the quarter, IRA has revised the full year growth projection from 12% to 14.2%.

Speaking at the media briefing, the IRA Chief Executive Officer, Alhaj Kaddunabbi Lubega noted that the posted growth rate is a statement of the industry’s resilience in an economy that is contracting due to challenging macroeconomic fundamentals, characterised by double digit inflation. Uganda’s inflation rate stands at 10.7 percent, according to the Uganda Bureau of Statistics.

The notable growth rate notwithstanding, Alhaj Kaddunabbi said that with the macroeconomic fundamentals still unfavourable, especially the double-digit inflation which is affecting people’s purchasing power and constraining savings, the demand for insurance will be impacted given that it is not yet a priority for most Ugandans.

How the different segments performed

Non-life insurance business generated UGX632.3 billion of the industry’s total Gross Written Premium during the third quarter of 2022, compared to UShs528.8 billion posted over the same period in 2021.

Life insurance business on the other hand generated UShs351.3 billion in the period under review, growing from UShs291.6 billion registered in the third quarter of 2021. This represents a 20.46 percentage growth.

The dedicated Health Insurer, which is a mono-line insurance company licensed in the third Quarter of 2021, generated UShs64.3 billion, compared to UShs55.2 billion posted in the third quarter of 2021. This represents a 16.5 percentage growth.

The gross written premium collected through the brokerage distribution channel during the period under review was UShs367.6 billion, accounting for 27.5 percent of the total insurance premium during the third quarter of 2022.

The Director Planning, Research and Market Development Mr. Protazio Sande said brokers remain critical players in the market as they play a critical role in providing expert and value-adding advice on risk management to their clients.

The Gross Written Premium generated by Health Membership Organisations (HMOs) during the period under review declined to UShs33.04 billion in the third quarter from UShs35.9 billion generated in the same period in 2021, representing a 7.97 percent decline. This was attributed to a recurrent effect of acquisition of IAA by Prudential Life Assurance.

The underwritten premium registered by the microinsurance business also declined by 7.33 percent from UShs505 posted in the third quarter of 2021 to UShs468 million in the third quarter of this year. This was partly attributed to hardening economic times as inflation continues to make it hard for the population at the lowest levels of the economic pyramid to save.

Growth in claims payment 

The industry also posted an increase in the volume of claims paid during the period under review, an indication of that industry players are committed to honouring claims. UShs476.52 billion was for instance paid out in gross claims during the period, accounting for 44.1 percent of the industry’s total premium. This is an increase from UShs363.15 billion paid in the third quarter of 2021 which represented 39.82 percent of total premium.

Alhaj Kaddunabbi said the Authority’s mandate remains policyholder protection and ensuring that legitimate claims are paid. He added that this remains high on the Authority’s priorities.