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By Naome Namusoke/KMA Updates
Despite Uganda’s growing economy, insurance uptake remains alarmingly low, with current figures indicating an uptake rate of just 2% and a penetration rate of less than 1%. This stark reality has raised concerns among stakeholders who warn that the country’s economic resilience is at risk if the trend is not reversed.
This was the major focus at the 63rd CEO Breakfast Meeting organized by the Insurance Regulatory Authority (IRA), where industry leaders convened to reflect on the pressing issues hindering insurance growth in Uganda.
Speaking during the forum, Deputy Governor of the Bank of Uganda, Prof. Augustus Nuwagaba, pointed to a number of critical gaps in the sector. These include limited public knowledge about insurance, lack of trust, high costs, widespread misconceptions, and poor collaboration with financial institutions, particularly banks.
“There is still a lot of misinformation about insurance, and many people do not trust the system. The costs are also relatively high, and the sector has not collaborated enough with banks to ease access to services.”
Prof. Nuwagaba further criticized insurance companies for being excessively profit-driven in their operations. He urged them to take a cue from commercial banks by adopting inclusive innovations like agency banking and internet banking to expand access.
He also highlighted that while sectors like tourism, external labor to the UAE, and the export of medical professionals to countries like Canada contribute significantly to Uganda’s GDP—at a rate of 9.7%—insurance barely registers and must be strengthened to boost the national economy.
“We need to see insurance playing a bigger role in the economy. It’s time for the sector to embark on wide-scale sensitization through diverse platforms, and for government to offer stronger backing.”
Al Hajji Kaddunabbi Lubega, the CEO of the Insurance Regulatory Authority, echoed the need for mainstream government support, stressing that without it, the sector’s growth will remain stunted.
“We need government to come on board in a bigger way. If we are to strengthen the economy, insurance must be part of the foundation.”
Also weighing in was Jonan Kisakye, CEO of the Uganda Insurers’ Association, who revealed that while the industry spends close to 2 billion shillings on public sensitization annually, awareness and uptake remain disappointingly low—raising questions about the effectiveness of current strategies.
“We are spending a lot on sensitization, but the results are not matching the investment. There’s probably something we’re not doing right. It’s time to re-evaluate and work more closely with both the government and private sector to address this.”
As Uganda continues to grapple with economic shocks and vulnerabilities, sector players now say strengthening insurance is not just about industry growth it’s about national economic security.