Uganda’s insurance sector shows rapid growth

Mashrukh Khan: Uganda’s insurance market closed 2025 with gross written premiums of UGX 2.03 trillion, up 14.8% from UGX 1.76 trillion in 2024, driven by strong life insurance growth of 39.3% to UGX 978.5 billion while non-life reached slightly above UGX 1 trillion. The sector paid out UGX 721.96 billion in claims during the year, reflecting improved claims settlement and rising policy volumes.

Life insurance products include term, endowment, whole life, group life, credit life, deposit administration, annuities, and unit-linked or investment-linked plans for death benefits, retirement savings, and critical illness.

Non-life offerings encompass mandatory motor third-party liability plus comprehensive for accidents, theft, and own damage; medical and health insurance; property and fire insurance for buildings and contents against fire, storms, floods, and collapse; marine cargo (mandatory for imports since February 2025); liability; personal accident; workers’ compensation; travel; surety bonds; engineering; and emerging micro-insurance and index/parametric covers.

Mandatory insurances require motor third-party liability for all vehicles (covering third-party bodily injury and property damage), group life for employers, marine cargo for all imports, and specific professional or builders’ liability in regulated sectors, while private health, comprehensive motor, and property covers remain voluntary but see growing uptake through bancassurance and employer schemes.

Clauses follow the Insurance Act and Insurance Regulatory Authority (IRA) guidelines, enforcing utmost good faith, full pre-contract disclosure of material facts, and prompt policy issuance. Non-disclosure or misrepresentation risks reduced payouts or voidance if material.

Exclusions typically cover intentional acts, war, nuclear events, gradual wear, and unendorsed perils. Claims must be acknowledged promptly with decisions and settlements within defined timelines; ambiguities favor the insured, and insurers face penalties for unjustified delays.

Claims predominantly arise from motor accidents and own-damage due to road conditions and rising repair costs, medical treatments under health plans, property damage from fires, floods, storms, and theft, plus marine and liability events. Industry claims paid reached significant volumes, with motor, medical, and fire dominating payouts. Denials often stem from non-disclosure, late notification, suspected fraud, improper documentation, or policy exclusions.

Premiums are risk-assessed: motor third-party starts at modest regulated levels while comprehensive depends on vehicle value, type, driver age, history, and location; medical and property factor age, asset value, and peril exposure with recent increases in high-risk areas; life ties to age and sum assured. No-claims bonuses and bundling provide discounts, though inflation and reinsurance costs exert moderate upward pressure.

Claim values range from the lowest minor motor repairs or small thefts under UGX 100,000 to the highest aggregates from major motor, health, property, or marine events reaching billions of shillings, with total claims paid reflecting robust industry capacity.

Regulated by the Insurance Regulatory Authority (IRA), the market features leaders such as Jubilee and Prudential in life, and SanlamAllianz and Old Mutual in non-life, with five firms controlling over 60% of non-life and four holding 81.8% of life. Challenges include low penetration below 1% of GDP, fraud risks, and claims management pressures, yet opportunities expand through compulsory marine cargo enforcement, digital platforms, bancassurance growth, micro-insurance, and product innovation in life and health segments. The sector demonstrates resilience with steady premium and asset growth amid economic activity.