UGANDAâ€™S insurance industry accumulated a gross premium worth sh167b written by licensed insurance companies by 2008.
UGANDAâ€™S insurance industry accumulated a gross premium worth sh167b written by licensed insurance companies by 2008, according to the annual report issued by the Uganda Insurers Association (UIA) last week.
Of the total premiums, non-life insurance accounted for 91% and life premiums stood at 9%, a state that requires public sensitisation about the relevance of insurance policies that are not mandatory.
The non-life policies, incorporate the Motor Third Party, a statutory insurance policy which accounted for 90% of the industryâ€™s total revenue.
The industry, however, recorded a reduction in the totals assets amounting to sh1.912b in 2008, down from sh1.92b in 2007.
Similarly, the total reserves and liabilities were sh1.912b in 2008 as opposed to sh1.921b in 2007.
Whereas there has been a positive growth in the insurance sector, the report indicates, the countryâ€™s insurance market penetration level still lags behind industry averages if put on the scale of the African continent. In 2008, Uganda accounted for only 0.4% of the total African gross premium.
South Africa, the continentâ€™s insurance giant, accounted for 80% with 15.3 penetration rate in an economy of up to $280b of GDP.
The gross premiums and market penetration rates on the African scale for 2008 puts Uganda at 0.6% operating under an economy worth $13 billion of GDP, lagging far behind Kenya which commands a penetration rate of 2.5% with a GDP of $29b.
By the end of 2008, there were 21 licensed insurance companies operating in Uganda. 14 were non-life insurance companies while six were composite companies offering both life and non-life insurance policies.
Six of the companies were offering microinsurance products despite the low premiums that accrue from the segment.
In the same report, the Uganda Investment Authority chief executive officer, Dr. Olli-Pekka Ruuskanen, says Ugandaâ€™s insurance industryâ€™s failure to flourish is partly due to the absence of a national re-insurance firm, unlike in her neighbours Kenya and Tanzania.
This has led to part of local premiums leaving Uganda to countries with already established re-insurance companies, he added.
Insurance premiums hit $167b