A model regulator of a secure and developed insurance industry


Uganda’s insurance industry is expected to get more resilient to withstand any kind of shock as the regulator moves to enforce the 200% Capital Adequacy Ratio (CAR).

The Insurance Regulatory Authority Chief Executive Officer, Alhaj Kaddunabbi Ibrahim Lubega said enforcing the new CAR will ensure that the insured enjoy better and faster service provision.

“Increasing the CAR by 200% means you are doubling the businesses you are underwriting. The companies in this league will be very strong to insure all types of risks,” the CEO said at the 52nd CEOs Breakfast meeting.

Increasing the CAR, according to the CEO, will ensure that companies are very liquid and able to pay claims in a timely manner.

“We have given claims guidelines; there are those claims that must be paid within a week, and those that should be paid within a month,” the CEO said.

He added that IRA intends to revisit the claims guidelines in the course of the year to ensure that the insureds are served better.

The industry continues to post remarkable growth despite the havoc that the COVID-19 pandemic wreaked on the economy.

Impressive 2021 performance

The industry posted UShs912 billion in Gross Written premiums for the third quarter of 2021.

This impressive performance, according to the CEO, is an indication that much more was underwritten by the end of the year (statistics still being computed) compared to the UShs1.06 trillion underwritten in the entire 2020.

UShs528.76 billion of the UShs912 billion Gross Written Premiums was by non-life companies. This is 80% of the UShs664.29 billion underwritten the entire 2020. UShs291.6 billion came through life companies, UShs35.9 billion was raked in by Health Membership Organisations (HMOs), UShs55.2 billion by Health Insurers and UShs504.9 million by Micro Insurers.

One non-life company underwrote above UShs100 billion, three companies underwrote between UShs50 billion and UShs100 billion, 11 companies between UShs10 billion and five companies performed between UShs1 billion and UShs10 billion. AIG, which exited the market last year, was the only one with premiums below UShs1 billion.

Under the life insurance business, five company performed above UShs30 billion in gross written premiums, one company between Shs20 billion to UShs30 billion, two companies between UShs5 billion and UShs10 billion while one company was below UShs5 billion.

Under HMOs, one country was above Ushs20 billion, one company above UShs5b and below UShs10 billion, one between UShs1 billion and UShs3 billion and one company was below UShs1 billion

The good performance was pegged on the resilience of the regulator, who has ensured that industry players serve the people better, ensuring that players innovate products that address people’s needs and innovative delivery means.

Additionally, prompt claims payment also enhanced confidence in the sector, oiling its growth.

“The time it takes for players to have their claims paid has fundamentally reduced and the insured are more impressed by what insurance companies are doing,” he said.

Additionally, emphasis on products like micro insurance, agriculture have driven the industry in the right direction.

Enhance digital platforms

Kaddunabbi, however, urged industry players to enhance the use of digital platforms to improve on the way they conduct business. He called for retooling staff to align them with the new way of doing business.

He also appealed to non-life insurance companies to engage with Bancassurance agents to grow business. Currently, most premiums underwritten through bancassurance is for life business.