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INSURANCE INDUSTRY POSTS IMPRESSIVE Q2 PREMIUM GROWTH

The Insurance Regulatory Authority of Uganda (IRA) has reported strong second-quarter results, showcasing impressive growth in written premiums on the back of a resilient sector.

The industry’s written premiums posted an upswing of 16.5% from UShs711.6 billion posted in Q2, 2022 to uShs828.9 billion as at the end of June 2023.

The IRA Chief Executive Officer, Alhaj Kaddunabbi Ibrahim Lubega, said the steady growth reflects the sector’s attraction of more customers committing more money to purchase of insurance.

Alhaj Kaddunabbi who was speaking during the quarterly press briefing at the Insurance Tower on September 14, noted that widening and deepening the insurance sector remains a strategic focus area for the Authority both in the short and medium term.

Of the total underwritten premiums, the non-life business segment generated UShs510.1 billion, up from UShs446.6 billion in Q2, 2022, representing a 14.2%.

The life insurance business segment on the other hand generated UShs291 billion during the period under reveiw, compared to UShs242.7 billion generated in the same period in 2022. This represents a 19.9% growth.

Health Membership Organisations contributed UShs27.32 billion of the total premiums posted during the period under review, registering a 24.1% growth from the UShs22 billion posted in the same period the previous year.

IRA CEO, Alhaj Kaddunnabi Ibrahim Lubega

Micro insurance continues to grow; figures show that premiums collected from this line of business grew from UShs317.4 million in Q2 of 2022 to UShs462.63 million in Q2 of 2023. This represents a 45.8% growth.

While the life insurance segment is growing faster, non-life still accounts for a bigger market share of 61.6%. The life insurance segment accounted for 35.1% of the market pie while the rest of the classes accounted for 3.3%.

Claims paid

The industry paid UShs311.3 billion in gross claims during the period under review, accounting for 37.6% of the total premiums registered in Q2,2023. This compared with 43.7% of total premiums registered in Q2, 2022.

Alhaj Kaddunabbi said the Authority will continue examining the trends as the year progresses and ensure that all payable claims are paid, and in good time, adding that paying claims fulfils the fundamental promise of providing financial protection in times of need. This helps maintain trust between policyholders and insurers.

Distribution channels

As at end June 2023, the gross written premium collected through the brokerage distribution channel was UShs257.8 billion, up from UShs133.6 billion in Q1, 2023. This accounts for 31.1% of the total insurance premium during the period under review.

Alhaj Kaddunabbi said brokers remain critical players in the market as they play a key role in providing expert, value-adding advice on Risk Management to their clients.

“We shall continue to implore brokers to sell their value propositions to the consuming public so as to increase their share,” he noted.

The bancassurance channel on the other hand collected UShs83.6 billion compared to UShs62.1 billion in Q2, 2022, representing a 34.5% growth and an overall contribution of 10.1% to total industry premium in Q2, 2023.

Alhaj Kaddunabbi expressed optimism for a better performance at the end of the year, noting continued traction life insurance, marine insurance that is expected to come in force on October 1, 2023 and motor insurance.

The other areas where growth is expected to come from are public sector investments, the Parish Development Model and agriculture insurance, risk awareness and innovation and digitization of insurance.

In addition to digitisation of the supervisory activities, Alhaj said the Authority has embarked on the process of ISO 9001 certification to enhance its internal processes to deliver improved regulatory services.

He pledged that more attention will be paid to claims and claims processes to ensure that all payable claims are paid in time.