Insurance companies raise shs933.8bn in gross premiums in first half of 2024

Insurance companies in Uganda raised shs933.8 billion in gross written premiums in the first half of 2024, a sector performance report by the Insurance Regulatory Authority(IRA) has indicated.

Gross written premium is the total amount customers are required to pay for insurance coverage.

Speaking on Thursday, IRA CEO, Al Haj Ibrahim Kaddunabbi Lubega said the shs933.8 billion is a 12.65% growth from the shs828.9 billion registered in the same period the previous year.

This was an impressive growth which reflects heightened business activities, underscoring the sector’s resilience and its pivotal role in the country’s economic landscape,” Kaddunabbi said.

The performance report shows that  of the shs933.8 billion in gross written premiums, non-life business generated shs542.3 billion representing a 6.30% growth from the shs510.1 billion the same period last year.

On the other hand, life insurance business generated shs357.8 billion which was 22.97% growth from the shs291 billion during the same period last year while Health Membership Organisations generated shs33.1 billion up from shs27.3 billion, representing a 21.24% growth.

The sector performance report also shows that microinsurance generated shs0.613 billion up from shs0.463 billion , indicating a 32.52% growth.

Kaddunabbi hailed the continued growth of microinsurance which he said remains vital in offering financial protection to vulnerable populations by safeguarding them against unforeseen events, fostering their resilience, and empowering individuals and communities to recover from economic setbacks

“This growth underscores the critical role microinsurance plays in enhancing the financial security of those who need it most,” he said.

Brokers

The sector performance report shows that during the half year ending June 2024, the gross written premium collected through the brokerage distribution channel was shs298.3billion , up from the  shs257.8billion generated in a similar period in 2023.

This represented a 15.63% growth.

In relative terms, brokers business accounted for 31.9% of the total insurance premium, an increase by 0.79% from 31.11% share during the same period last year.

On the other hand, bancassurance reached shs107.5 billion in gross written premiums, up from shs83.6 billion, reflecting a 28.59% growth.

The IRA CEO described this growth as a remarkable performance which underscores the tremendous potential of mutual partnerships in expanding access to insurance and enhancing financial security for customers.

Market share

In terms of market share, non-life continues to dominate with 58.07% of the aggregate industry written premiums.

However, the 58.07% is lower than the 61.54% during the same period last year.

The sector performance report on the other side shows that life business in the first half of the year 2024 accounted for 38.32% of the aggregate industry written premiums, 3.22% points higher than the market share index of 35.10% in 2023.

“The increasing share in life is a key highlight because life insurance premiums are essential for building a reserve that can support long-term investments,” the IRA CEO said.

Health Membership Organizations accounted for 3.54% of the market share, up from 3.30% in the first half of 2023.

The regulator said that the gross claims paid on account of both life and non-life, including HMOs was shs423.8 billion in the first half of 2024.

This was 45.39% of the total gross written premiums.

According to IRA, the stellar performance can be attributed to enhanced distribution , acceleration in online transactions, increased customer confidence and growth of the middle class.

“Looking ahead, we anticipate positive developments driven by expected public sector investments in engineering and construction in the second half of 2024 and into 2025. Additionally, innovations such as improved marine insurance compliance and increased public trust in the sector are likely to contribute to further growth. As a result, we project that the insurance sector will continue to expand, with growth rates remaining above 10%,” Kaddunabbi said.