The Insurance Regulatory Authority (IRA) has revealed that at least 15 insurance companies are on the verge of collapse due to the dire economic situation which has slowed down uptake of insurance services.
Ibrahim Kaddunabi, the chief executive officer of IRA said unless some of these firms invest more capital or seek mergers, they may not live to see the light of day in the coming months.
“They have to find ways of surviving,” Kaddunabi said.
Some of the failing firms, according to Kaddunabi are: AIG Uganda, Nova Insurance Company, Rio Insurance Company, First Insurance Company, Pax Insurance Company, Excel Insurance Company , Alliance Insurance Company limited among others.
According to the figures they are below Shs 20 billion in capitalisation.
However the general performance of the insurance sector was above average in 2017. Generally, the sector grew by 16% while the total income in the industry increased to Shs 3.81 billion from Shs 3.4 billion in 2016.
But with growth comes challenges such as failure to do due diligence on some of the claims hence leading to losses.