Uganda’s insurance posts slow growth in Q2 2020

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Uganda’s insurance companies raised about $144.54 million in the second quarter of 2020 in gross written premiums, a 7 percent increase from about $133.9 million during the same period in 2019.

According to data from the Insurance Regulatory Authority (IRA) showing performance of the insurance sector from April to June this year, indicates that across all sectors there was an increase in premiums despite the impacts of COVID-19 on economies.

General insurance is also known as non-life insurance registered a 3.4 percent increase in gross written premiums to about $93.9 million in 2020 from about $90.9 million in 2019.

Health membership organizations recorded $10 million in 2020 compared to $9.47 million in the same period in 2019.

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Life insurance, which has been growing exponentially, collected about $40.49 million in the second quarter of 2020, a 20 percent increase from 2019.

However, in the entire sector, Microinsurance recorded the highest growth of about $56,033 from $7,850 in  2019.

According to the IRA director of market research and development,  Mr. Sande Protazio, while there is an absolute growth in real terms, the trend analysis reflects a reduction in the growth of gross written premiums.

“This must be the smallest increase we ever had. When you look at trend analysis, you will notice it is a 5 percent decline in comparison to the 2019 growth from 2018,” he said

He however noted that the adoption of technology by the micro-insurers has boosted the growth in microinsurance.

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“The micro players have adopted technology to distribute microinsurance products and it is those innovations that have delivered growth,” he said.

Edge Micro, is the newest entrant into the microinsurance space placing competition on Grand Micro Insurance Company which made its entrance in Uganda in 2018.

This comes after a report by Financial Sector Deepening Uganda (FSDU) which aimed at determining the impact of Covid-19 on multiple sectors including tourism and transport, ranked Uganda’s insurance sector as highly likely to recover after Covid-19.

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