Uganda’s insurance industry expects significant growth as increased government spending on infrastructure projects creates new opportunities for insurers, the Insurance Regulatory Authority (IRA) has said.
Dr Protaszio Sande, the acting chief executive officer of the IRA, said government-funded infrastructure projects already underway are expected to generate more business for insurers as contractors, investors, and other players seek insurance cover for their activities.
“We welcome the infrastructure projects funded by government that have already commenced. We are hopeful that there will be a lot of money coming from premiums,” Sande told journalists during the release of the insurance industry’s half-year performance results at Insurance Tower in Kampala.
He said the industry’s performance was assessed by looking at premium growth alongside claims, expenses, and distribution costs to determine whether the sector was growing sustainably.
“We are here to inform you that insurance premium growth has been closely considered alongside claims, expenses and distribution costs to assess the stability of the insurance industry’s performance,” Sande said.
Sande also identified growth in imports, particularly motor vehicles, as another opportunity for insurers. He said more Ugandans tend to buy vehicles towards the end of the year, which could increase demand for motor insurance.
He said the half-year results showed that the insurance sector remained financially stable and adequately capitalised, despite the challenges faced by individual companies.
Sande urged investors who may have concerns about the sector to continue investing, saying the regulator was working to ensure that the industry remained sustainable.
“It is one thing to generate Shs1 trillion, but if you don’t manage the expenses and loss ratio, companies may remain unsustainable,” he said.
Sande also called on small and medium-sized insurance companies to grow responsibly, particularly by controlling their management expenses.
He said companies whose management expense ratios were above the market average needed to review their costs while also investing in business growth.
“Companies need to invest in both the top line and bottom line because shareholders want a share of the dividends from the investment,” Sande said.
Sande said the leadership changes were part of a restructuring process and should not create uncertainty among insurance companies, policyholders or other stakeholders.
He said the legal and regulatory framework governing the industry remained in place to protect the interests of insurers, reinsurers, the government and policyholders.
“The business of the insurance sector was never affected,” Sande said, assuring stakeholders that the regulator remained committed to maintaining stability in the industry.
He said IRA had also introduced several measures to improve the handling of claims and complaints.
These include the establishment of a claims desk, a complaints bureau, a fully functional online complaints system and the use of standard templates to help settle claims and protect the rights of insurance stakeholders.
The measures are intended to improve compensation processes and ensure that legitimate claims are settled promptly.
Bernard Obel, IRA director of supervision, urged smaller insurance companies to consider merging so they can build enough financial capacity to meet the needs of their customers.
He said the regulator was interested in having insurance companies with strong capital positions because this would help reduce risks associated with inadequate capacity and capital flight.
“We encourage the small-sized insurance companies to merge and obtain enough capacity to attend to the demands of their consumers,” Obel said.
Obel also said the insurance industry was ready to take advantage of opportunities expected to arise from Uganda’s oil and gas sector.
He said insurers had established procedures and systems for managing the risks associated with oil and gas operations.
Asked whether the sector was ready to handle the expected oil and gas business, Obel said: “We are more than ready to handle all oil and gas business due to our standard procedures to manage all associated risks that will come along the way.”
The half-year results for the period ended June 30, 2026, showed growth across several areas of the insurance industry, with claims remaining within what IRA considers manageable levels.
The non-life insurance business recorded a loss ratio of 41%. This means that for every Shs100 collected in premiums, about Shs41 was paid out in claims.
Sande said the ratio remained within acceptable levels for the non-life insurance business.
The wider insurance sector, however, recorded a loss ratio of 57.17%. The ratio can rise to between 65 and 70% in some parts of the industry, depending on the nature of the business.
Medical insurance recorded a loss ratio of 70.6%. Sande said the relatively high ratio was not necessarily a sign of weakness because health insurance is naturally more claims-intensive.
Microinsurance recorded the lowest loss ratio at 28.5%.
The regulator also reported that management expenses remained within what it considered manageable limits, although the ratios differed across the various categories of insurance.
The average management expense ratio was 19 per cent for non-life insurance, 20 per cent for life insurance, 11 per cent for health maintenance organisations and 37 per cent for microinsurance.
Sande said the expense and loss ratios were important indicators because they show the quality and sustainability of insurance business being written in the market.
He said insurance companies must therefore balance the need to grow their premium income with proper management of claims and operating costs.
Mariam Nalunkuuma, IRA corporate affairs manager, said the regulator would continue working with insurance companies and the media to increase public awareness about insurance and explain how the industry operates.
She said continued engagement with the media would help the public understand their rights as policyholders and the role of insurance in protecting individuals, businesses and investments.
