THE INSURANCE INDUSTRY: INSIGHTS FROM 2024 AND THE PATH FORWARD INTO 2025.

The insurance industry has continued to register robust growth rates in the first three quarters of 2024, with the total gross written premium growing to Ugx.1.39 trillion in the third quarter of 2024 compared to Ugx.1.23 trillion recorded over the same period in 2023, registering a 13.51 percent growth. We expect that after analyzing the third quarter of the year performance, this year’s performance will exceed last year’s because we have seen heightened business activity, which translates into more insurance products/services being consumed.

The IRA CEO Alhaj Kaddunabbi Ibrahim Lubega puts the above in perspective in the following interview.

What have been some of the sector’s highs and lows during the 2024?

The key highlights for 2024 for the industry are:

1. We launched the Local marine insurance platform on November 6, 2024, which is expected to become mandatory effective February 01, 2025. This platform is expected to ease access to insurance services locally compared to what importers have been going through to secure policies from foreign firms. In addition to cabbing capital outflow and generating more revenue for government, the platform will ease claim processing in case of a loss thus ensuring that businesses recover swiftly and continue their operations with minimal disruption in case of cargo loss or damage.
2. We have observed ongoing product innovation in the industry as companies adapt to the constantly changing needs of customers. Many have adopted digital platforms, such as online transactions, to make insurance services more accessible and user-friendly. The integration of technology to meet the increasing demand for efficient, seamless transactions has helped attract a wider range of clients. 
3. There has been enhanced collaborations with the Parish Development Model (PDM) program technocrats to sensitize farmers that receive PDM funds to take on insurance for their agricultural projects to safeguard against unforeseen risks given that agro-enterprises are susceptible to natural calamities such as prolonged drought, excessive rainfall, unpredictable weather changes, and pests and diseases that have seen farmers suffer huge losses.
4. IRA is also proud to have opened Regional Offices in Eastern (Mbale), Western (Mbarara), and Northern (Gulu), so as to take insurance services closer to the people.
5. The industry has also continued to be attractive to players, especially under the new distribution channels. For instance, issued bancassurance licenses to two new players this year – Pride Micro Finance and FINCA Uganda Ltd.
6. The industry also successfully hosted the Africa Reinsurance Corporation’s 46^th Annual General Meeting in June this year, bringing together delegates from across the continent.

And what is the outlook of the insurance sector come 2025?

1. We project continued positive developments driven by expected public sector investments in engineering and construction in 2025, which will support industry growth.
2. Following the launch of the local marine insurance platform, we expect more premiums from all imports into the country. As you may be aware, Ugandan is a net importer, and every year billions worth of goods are imported into the country. Previously, all importers have been purchasing insurance from foreign insurers in the countries of importation, which has been draining our industry and economy of significant amounts of money. In its 2015 report, the Inter-Government Standing Committee on Shipping (ISCOS), noted that the Ugandan Government lost revenue worth Ugx. 60.3 billion as Value Added Tax and Ugx.35 billion as stamp duty through insurance of imports by foreign insurers, that between 2009 and 2013. This is money that should remain within the country to foster economic growth and development.
3. We also project that increased public trust, arising from prompt claims payment and complaints handling will also lead to the growth of the industry as we anticipate more Ugandans to take up insurance as a result. For instance, Ugx. 658.92 billion was paid out in total claims in the third quarter of 2024 which is 47.24% of the total Gross Written Premiums, compared to Ugx. 479.88 billion which was paid in quarter 3, 2023. I would like to assure the public that payment of genuine claims will continue because that is the reason we exist.

What are your final remarks regarding the insurance sector to either the public, government, agents or banks?

I urge all Ugandans to embrace insurance as a means of protecting their assets, themselves, and their loved ones from unforeseen risks. While problems cannot be predicted, they can strike unexpectedly, potentially plunging you back into poverty in an instant. Insurance ensures that, in the event of such risks, the affected individual is swiftly restored to the position they were in before the incident occurred.