Insurance industry urged to strengthen cybersecurity amid digital transformation
"Cyber threats are becoming more pronounced as we digitize. We must invest in cyber risk protection," Kaddunabbi told industry players.
Alhaj Ibrahim Lubega Kaddunabbi appreciating Chief Executive Officer Stanbic Bank Uganda Kenneth Mumba Kalifungwa during the 7th Insurance Brokers Association Uganda (IBAU) conference at Lasvegas Garden hotel Mbarara. (Photos by Violet Nabatanzi)
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As Uganda embraces digital transformation, the Insurance Regulatory Authority (IRA) warns that the Insurance industry must prioritize cyber risk protection.
"Cyber threats are becoming more pronounced as we digitize. We must invest in cyber risk protection," Chief Executive Officer Insurance Regulatory Authority Alhaj Ibrahim Lubega Kaddunabbi told industry players.
He said many people see insurance as a quick route to financial gain through fraudulent claims.
Kaddunabbi said IRA has already stepped up its efforts to combat fraud, establishing a dedicated Anti-Fraud Unit and investing heavily in cybercrime detection.
"Several suspects have been arrested and arraigned in court, and others are being processed for prosecution. Insurance is not an option for those looking to make quick money," he said.
Speaking during the 7th Insurance Brokers Association Uganda (IBAU) conference which was under the theme, ‘A Whole New World: Major Trends Shaping the Globe ‘ at Lasvegas Garden hotel in Mbarara, the Chief Executive Officer Stanbic Bank Uganda, Kenneth Mumba Kalifungwa, said globally, cybercrime costs are projected to reach about $10.5 trillion annually by 2050.
He said Africa is not immune, adding that the continent is becoming an increasingly attractive target as its digital infrastructure expands more rapidly than its security frameworks.
According to a recent report, Africa experienced over 2,000 weekly cyberattacks in 2023, with countries like Uganda, Kenya, Nigeria, and South Africa among the top targets.
He said these nations are some of the fastest-growing financial markets on the continent, making them vulnerable to cyber threats.
The continent loses an estimated $4 billion annually to cybercrime a figure that continues to rise as financial services become more digitized.
‘’The future of the financial services industry will depend not only on how well we innovate but also on how deeply we are trusted,’’ he said.
Alhaj Ibrahim Lubega Kaddunabbi and Chief Executive Officer Stanbic Bank Uganda Kenneth Mumba Kalifungwa (behind) posing for a picture with the international delegates during the 7th Insurance Brokers Association Uganda (IBAU) conference at Lasvegas Garden hotel Mbarara. 
Kalifungwa also said in Uganda, insurance penetration remains critically low, hovering around 1% despite growing awareness and exposure to risk.
A 2023 study on insurance inclusion in Uganda by NDPI identified three key psychological barriers, among them was perceived trust. Trust in insurers significantly influences insurance uptake.
The study revealed that perceived trust had a stronger impact on insurance inclusion than even the perceived value of insurance or insurance literacy.
Many Ugandans expressed the sentiment: "I need to trust that when I'm insured and something happens, I will actually be covered."
Insurance literacy was the second major factor. A lack of understanding about insurance products and their benefits leads to underinsurance. The study showed that insurance literacy is positively associated with insurance inclusion.
Innovation
Kaddunabbi highlighted the urgency of innovation.
‘’The IRA is already laying the groundwork through its InsurTech and Sandbox regulations, creating space for innovation and partnerships with FinTechs, RegTechs, and other digital solution providers,’’ he said.
He cited that motor Third Party insurance, marine insurance, and travel insurance are being digitized, and some medical providers have joined in.
"Our goal is to automate all products, enabling Ugandans to access insurance services from the comfort of their homes or workplaces,” he added.
Beyond cybersecurity, the regulatory body is spearheading changes to Uganda’s insurance laws and policies. IRA is overhauling the regulatory framework to better serve the population.
Kaddunabbi urged all stakeholders to actively participate in shaping the upcoming regulations.
He called for customer-centric insurance products tailored to the realities of Ugandans.
"We need products that speak to people’s actual needs and micro-insurance solutions that reach households across the country," he said, stressing the role of the industry in supporting government efforts to increase financial inclusion.
IRA latest data shows that over the past year, brokers contributed over 30% of gross written premiums.
IBAU Board Chairman Paul Muhame said they helped businesses recover from the fire losses, supported families after unexpected tragedies and guided clients through intricate claims and policy decisions.
He said they were also witnessing powerful shifts from the rise of mobile-first financial services to the expansion of oil and gas, the formalization of SMEs, and the government's push toward inclusive financial services among others.
The conference was sponsored by Sanlam among others attracted international delegates.