Digitised but not insured: why technology is failing to lift Uganda’s insurance uptake
Several sector experts assert that the problem is no longer access. The problem is trust.
Digitised but not insured: why technology is failing to lift Uganda’s insurance uptake
________________
The insurance offer had appeared on Ogwal Geoffrey Blair’s phone so many times that he no longer noticed it. Every day, the 33-year-old passionate cyclist used mobile money to receive payments, send cash to relatives, buy airtime, and settle small business transactions.
Every so often, a familiar prompt flashed briefly on his screen: Invest and Insure. For as little as sh500, he could enrol in an insurance cover by MoMo (mobile money) within seconds.
However, like many users, Ogwal always pressed “skip” to other options. “You are usually in a hurry. You want to send money and continue with work. You don’t stop to think about insurance,” he says.
Then came the accident. A collision left him injured and unable to work for weeks. His motorcycle remained idle. Medical bills accumulated. Income dwindled overnight. For the first time, the insurance offer he had ignored countless times suddenly seemed important.
But by then, it was too late for him. “Now, I have learned that, if possible, everyone should be subscribed to some form of insurance cover. It is so important as a strategy to avert unforeseen risks. The challenge is that sometimes economic hardships stand in the way for most of the people. But also, we doubt as to whether we will be compensated in the event of loss,” he says.
Ogwal’s story captures a paradox at the heart of Uganda’s insurance industry. Never before has insurance been so accessible. Through mobile phones, digital and social media platforms, telecom partnerships, artificial intelligence (AI) tools, mobile money systems and online enrolment channels, insurance is now available to millions of Ugandans at the touch of a button. However, very few are buying it.
Despite rapid digital transformation, Uganda’s insurance penetration remains below one percent of Gross Domestic Product (GDP), among the lowest in the region and behind neighbouring Kenya at 2.4 percent and Tanzania at 2.1 percent.
Access versus trust problem
Several sector experts assert that the problem is no longer access. The problem is trust. According to the National Population and Housing Census (NPHC) 2024 undertaken by the Uganda Bureau of Statistics (UBOS), only 1.1 percent of the population had health insurance coverage.
With Uganda’s population now standing at 45,905,417 people according to the Census Report, it means that only about 504,959 people are subscribed to health insurance coverage. These statistics reflect a country that has gone digital but remains uninsured.
Expanded digital economy
Uganda’s broader digital economy has expanded dramatically over the past decade. Quarter 4 of 2025 industry data shows that mobile registered subscriptions rose to 57.4 million, closely mirrored by 53.6 million mobile money users, underscoring the deep integration of digital financial services into everyday life.
Additionally, Fourth generation (4G) network coverage has reached approximately 88 percent of the population, while internet costs have fallen by more than 70 percent. For insurers, this should have been the breakthrough moment. Instead, a troubling gap has emerged between digital availability and actual insurance uptake.
Awareness Versus uptake
A 2025 survey conducted under the Insurance Literacy and Market Development Agenda (ILMDA) revealed that 94 percent of respondents had heard about insurance. However, only 19.5 percent actually held an insurance policy.
The survey, conducted among 426 individuals across eight districts, exposed a fundamental disconnect between awareness and participation.
The indication is that people know insurance exists. However, they simply do not trust it enough to buy it. Even more alarming, only 37 percent of respondents said they believed insurers actually pay claims. This figure explains why millions of Ugandans continue scrolling past insurance offers despite seeing them repeatedly on their phones.
One survey participant described a claims experience that permanently changed his perception of insurance. “They delayed my payment for months. By the time they paid, I had already sold my motorcycle to recover losses,” the participant said.
The consequences extend beyond individual frustration. According to the survey, half of those who experienced a poor claims process stopped using insurance altogether.
The findings suggest that the industry’s biggest challenge is no longer technological capability. It is public confidence.
Technology cannot solve a trust deficit
Insurance experts consistently pointed to trust as the central issue preventing digital innovation from translating into higher penetration.
“Many Ugandans remain uninsured not because insurance is unavailable, but because it is misunderstood or mistrusted. Innovation that does not build trust will not close the protection gap,” says Alhaj Dr. Kaddunabbi Ibrahim Lubega, a sector expert.
His assessment is echoed by actuarial expert Ernest Magezi Barusya, Managing Director of Kenbright Uganda. “To me, it is trust. If I do not trust the traditional tools of insurance enough to deliver on the promise, why should I trust the digital tools put in place by the same insurers?” Barusya questions.
He argues that digitising insurance distribution may actually magnify existing problems if underlying concerns remain unresolved. “The traditional tools should first be trusted before the public can trust that a claim would still be paid if they bought a policy through a digital tool,” Barusya notes.
This finding runs counter to a common assumption that technology automatically increases adoption. Digital channels may make insurance easier to access, but they cannot compensate for weak public confidence.
As veteran insurance executive Ambrose Kibuuka puts it: “Trust is not what we say. It is what we consistently do.”
Trust may be the biggest obstacle, but it is not the only one. Uganda’s predominantly informal economy creates unique challenges for insurance providers.
More than 70 percent of Ugandans operate in the informal sector, often earning irregular incomes that fluctuate daily or seasonally. According to the ILMDA survey, most households interviewed reported earning less than sh500,000 per month.
And for many families, even relatively small insurance premiums compete with immediate necessities such as food, transport, rent and school fees. “Financial inclusion requires that people understand and feel part of the system,” says economist prof Augustus Nuwagaba, the Bank of Uganda deputy governor.
“Applied to insurance, this means product innovation must reflect people’s real cash flows. However, affordability is often misunderstood,” he notes.
According to Nuwagaba, a customer may not be able to pay a sh15 million premium upfront but could potentially manage the same amount through smaller monthly instalments. He says the issue, therefore, extends beyond price. It is also about the payment structure.
Country manager of Smart Applications International Uganda, Judy Elaine Mugoya, says insurers frequently design products based on assumptions that do not reflect how ordinary Ugandans earn and spend money.
“Even small premiums can feel out of reach if income is unpredictable. Flexible payment options such as daily or weekly contributions can make a significant difference,” she says.
When awareness is not understanding
Another major challenge lies in how people perceive insurance itself. The ILMDA survey uncovered widespread misconceptions about the purpose of insurance.
One participant summed up a common concern. “They don’t understand why you pay and don’t get money back if nothing happens.”
The statement highlights a persistent misunderstanding that insurance should operate like a savings account rather than a risk-sharing mechanism.
Insurance experts say this misunderstanding remains deeply embedded across many communities. The acting chief executive officer at the Insurance Regulatory Authority, Dr Sande Protazio, says technology alone cannot transform the industry.
“Technology has improved access, but trust and perceived value remain apparent constraints. Digitisation has mostly made purchase and payment easier, but it has not fully solved low awareness, weak trust, claims friction, product mismatch, rural distribution gaps or affordability,” he explains.
The challenge, therefore, Sande notes, is not merely teaching people how to buy insurance digitally. It is helping them understand why insurance matters in the first place.
Complexity of insurance contracts
Moses Joshua Muyomba, president of the Uganda Insurance Agents Association (UIAA), says another challenge stems from the complexity of insurance contracts.
Muyomba argues that insurance products remain too technical for the average Ugandan to fully understand, even after efforts by regulators and insurers to simplify policy information.
He notes that while many companies now provide “Key Fact Documents” summarising benefits, terms and conditions, insurance contracts continue to be dominated by technical language that ordinary consumers struggle to interpret.
This complexity, he says, creates a barrier to uptake because potential customers are often unsure what they are buying or what protection they are actually entitled to receive.
Language and usability hurdles
According to Muyomba, many digital insurance platforms are not designed with the realities of Uganda’s diverse population in mind.
He says insurance applications and digital channels often rely heavily on English-language terms and conditions while also presenting complicated user journeys that can be difficult for semi-literate users to navigate.
As a result, many potential customers abandon the process before completing enrolment. He believes insurers need to develop more user-friendly platforms that support local languages and simplify customer interactions if digital insurance is to achieve wider adoption.
Telecom partnerships: huge reach, limited conversion
One of the industry’s most ambitious strategies has been partnering with telecom companies. The logic appeared compelling because telecom operators possess massive customer bases, established payment infrastructure and daily engagement with millions of users.
Insurance products embedded within mobile money platforms could potentially reach people who had never interacted with insurers before. And some progress has been made. Low-premium products offered through telecom partnerships have significantly reduced distribution costs and expanded visibility.
Protazio agrees and notes that “Telecom partnerships show promise, but impact evidence is still thin.” Current reporting tends to focus on products launched and premiums collected rather than active users, renewal rates, claims experiences and customer outcomes.
As such, industry observers say those metrics will ultimately determine whether telecom-led insurance succeeds.
Outdated regulatory frameworks
Muyomba also points to regulatory constraints that he believes reduce the attractiveness of some insurance products.
He specifically cites mandatory covers such as Motor Third-Party Insurance (MTP), which continue to operate under compensation limits established years ago and which no longer reflect present-day economic realities.
According to him, outdated legal frameworks can diminish the perceived value of insurance because compensation levels may appear inadequate relative to current costs and risks.
He argues that updating such regulations would improve consumer confidence and make insurance products more relevant to today's market conditions.
Are insurers digitising the wrong things?
A growing number of experts argue that insurers may be focusing too heavily on technology while neglecting more fundamental reforms.
Mugoya believes much of the sector’s digital investment has centred on improving existing processes rather than reimagining insurance from the customer’s perspective.
“In many cases, inefficiencies from traditional insurance models have simply been transferred onto digital channels. So, the real issue is not the absence of technology, but whether that technology is addressing the everyday realities of Ugandans,” she says.
Barusya shares a similar concern. He notes that artificial intelligence (AI) is increasingly being deployed for fraud detection, claims management, customer service and operational efficiency. However, relatively little attention is being given to using technology to acquire new customers and increase insurance participation.
“AI is being majorly used to maximise performance and not for business acquisition and increasing insurance uptake,” he says.
Basically, although Uganda’s insurance industry surpassed sh2 trillion in gross written premiums in 2025, many insurers continue to struggle with underwriting profitability.
For many companies, improving operational efficiency has become an urgent priority. However, experts warn that efficiency gains alone will not expand insurance coverage.
The next frontier: embedding insurance into daily life
Where, then, does the future lie? Many experts point to embedded insurance. Rather than asking consumers to actively seek insurance products, embedded models integrate coverage directly into services people already use.
This could mean insurance bundled with healthcare, agricultural services, lending products, transport services or digital payments.
“The industry has yet to fully embrace embedded insurance. Coverage should be seamlessly integrated into everyday services where people already interact and build trust,” says Mugoya.
She points to healthcare ecosystems as a promising example. According to her, when insurance becomes part of the patient experience rather than a separate financial product, consumers may perceive greater value and relevance.
Barusya also sees significant potential in usage-based insurance models. He says future motor insurance products could allow drivers to purchase coverage for a specific day, route or driving pattern.
“Soon we shall be able to buy car insurance for a given day or for using a certain route. Such innovations could dramatically improve affordability and relevance,” he says.
Why insurance matters beyond the industry
The debate about insurance penetration extends far beyond insurers themselves. At its core, insurance is about resilience.
Without it, families facing illness, accidents, crop failures, fires or business losses often have few options beyond borrowing money, selling productive assets or relying on relatives and community donations.
The ILMDA survey captured this reality starkly. “Without insurance, families rely on loans, donations, or asset sales to recover from crises,” the report notes.
That vulnerability has implications not only for households but also for economic development. In a country like Uganda, where millions of people are just one emergency away from financial ruin, achieving long-term prosperity faces steep obstacles without insurance.
This explains why regulators increasingly frame insurance as a development issue rather than merely a financial product. “If innovation does not respond to the reality of everyday Ugandans, it will remain cosmetic,” says Kaddunabbi.