Following the civil war in Uganda in the 1980s, the insurance industry was essentially restarted with the introduction of the Jubilee insurance company in 1991. From this start, the industry has grown rapidly from a nil base but has yet to reach a meaningful penetration rate. Growth is hampered by the low formal employment ratio with possibly 80% of the employable population working in informal employment such as agriculture.
A statistic recently published suggests that there are as many as 1.2 million boda-boda operators (motorcycles for hire used for the transport of passengers or goods) supporting up to five times that many people representing around 13% of the 2020 projected population.
Due to Covid-19, from 30 March 2020, a complete ban of all forms of motor vehicle transport was effected; the public transport ban was partially lifted from 1 June 2020, but the ban on the use of boda-bodas remained.
In 2018 life insurance premiums continued to grow rapidly, recording a 24.69% growth, with life insurance penetration remaining at just 0.16%. Provisional figures for 2019 suggest continued growth with an increase of 24.00%, although this growth may be expected to have reduced due to the COVID-19 responses in 2020.
Life premium income in 2018 (including personal accident and healthcare) was UGX 217.12bn (USD 58.25mn) and total assets that year amounted to UGX 436.67bn (USD 117.16mn). The low ratio of assets to premium reflects the relative newness of the market as well as an emphasis on protection products, most notably group life insurance that is mostly group credit life.
In 2018 there were nine life insurance companies of which only one was truly local as the other eight were wholly or partly foreign-owned. Initial unaudited figures for 2019 show that the same nine insurers achieved premium income of UGX 269.23bn (USD 72.69mn) and, in addition, there were two microinsurers, although only one showed premium income that amounted to UGX 138.91mn (USD 37,501).
Of this total, individual life was the largest component representing around 47% of gross written premium income. Group life was the next largest class representing around 34%, whilst medical insurance represented slightly under 15% and deposit administration (used to fund retirement benefits for employees) represented slightly under 8%.
Despite the setbacks caused by COVID-19, countries like Uganda are looking to a better future. If you're interested in the insurance market in countries like this, discover how Axco's non-life insurance reports can help.