Uganda’s insurance sector grew by 13.2% in 2019 to UGX973.58bn ($261m) in premiums from UGX859.80bn, according to a report released by the Insurance Regulatory Authority (IRA).
The insurance regulator attributes the growth to non-life business which generated premiums of about UGX622bn in 2019 that represented an increase of 26.8% over 2018.
However, the insurance industry could register a 50% plunge in premiums in the second quarter this year owing to the COVID-19 pandemic, preliminary indicators by the IRA show.
Mr Ibrahim Kaddunabbi Lubega, IRA CEO, said while the first quarter of 2020 registered 11% growth, the effects of COVID-19 are expected to be felt in the second quarter, according to a report by Monitor.
“The slowdown in economic activity and the near cut-off of the public’s earning potential means low disposable income and minimal allocation to insurance will affect aggregate performance this year,” he said.
Furthermore, public sector infrastructure investments are bound to be reduced as reallocations are made to strengthen the health sector’s response capabilities
“There are no more insurance premiums emanating from travel insurance since international travels are banned, and premiums from marine insurance have dipped as international trade has slowed down,” Mr Lubega said.
IRA expects some recovery beginning in July when the new Budget with an expected stimulus package takes effect. There is also hope as people slowly return to work following gradual lifting of the lockdown.
Source Middle East Insurance Review
