The Insurance Regulatory Authority(IRA) has revealed that insurance companies paid out shs 564.8 billion in claims in the year ended 2021.
A claim is a formal request to your insurance provider for reimbursement against losses covered under your insurance policy.
Releasing the performance report for the year 2021, IRA Chief Executive Officer, Ibrahim Kaddunabbi Lubega said there was a significant increase in claims paid out by insurance companies; a gesture he said is good for the sector.
“Claims payment is critical to the insurance value chain as it makes insurance tangible. As a regulator, we have instituted measures for zero-tolerance for non-payment of legitimate claims. In this regard, it is impressive to note that gross claims paid on account of both life and Non-life including Health Membership Organisations increased by 27.01% from Shs 44.7billion in 2020 to Shs 564.79billion in 2021,”Kaddunabbi said.
He noted that the figure for growth in claims has consistently exceeded the growth in gross written premiums, showing an enhanced commitment by players to honour their obligations.
“This is a very good gesture that shows that when you take an insurance policy and suffer a legitimate loss, you are paid out,” the Insurance Regulatory Authority CEO noted.
In terms of insurance penetration, the latest annual performance report indicates that insurance penetration in the country slightly improved by 0.026% to 0.796 % in 2021.
According to the IRA CEO, the figure should not be construed to mean that growth in insurance was insignificant but rather the continued spread effect of the rebased GDP.
Insurance penetration is a ratio of insurance premium to the Gross Domestic Product measured at current prices.
In terms of underwriting performance, the latest insurance sector report indicates that non-life underwriting performance reduced from Shs 23.77billion in 2020 to Shs 22.28billion in 2021.
“The decline in underwriting performance is on the account of increased claims over the reporting period,”Kaddunabbi said.
In terms of asset base, the net assets for the sector stood at shs832.6 billion a 30% increment from Shs 640.6billion in 2020 .
Net assets are a measure of financial strength and capability of the sector to absorb risks.