Advised. Mr Kaddunabbi explains in Kampala recently. He says
persistently loss-making insurance firms need to review their operations
as well as managing costs. PHOTO BY ISMAIL KEZAALA
Kampala. At least 12 general insurance companies posted a combined Shs19.7b in underwritten
losses for the year ended December 2018.
However, the industry posted an increase in written premiums, according to data from Insurance Regulatory Authority (IRA).
Data indicates that nine insurance companies made profits against 12 which registered losses.
Mr Ibrahim Kaddunabbi, the IRA chief executive officer, said that although the 12 companies made loses “it does not mean they are badly off,” adding they will be lifted from the loss-making zone by address certain challenges.
losses for the year ended December 2018.
However, the industry posted an increase in written premiums, according to data from Insurance Regulatory Authority (IRA).
Data indicates that nine insurance companies made profits against 12 which registered losses.
Mr Ibrahim Kaddunabbi, the IRA chief executive officer, said that although the 12 companies made loses “it does not mean they are badly off,” adding they will be lifted from the loss-making zone by address certain challenges.
Underwriting losses are calculated after claims have been settled and management expenses deducted.
Among the loss making companies were APA, Mayfair, Pax, Insurance Company of East Africa, NIC General Liberty and General Insurance.
Worth noting is, in 2017, 11 companies posted losses grossing at Shs20.3b compared to Shs19.7b for the year ended 2018.
Eight of the 12 companies have consistently made losses in both 2017 and 2018.
However, four companies, apart from, Mayfair, which entered Uganda last year, made losses in 2018 yet had made profits in 2017.
Among the loss making companies were APA, Mayfair, Pax, Insurance Company of East Africa, NIC General Liberty and General Insurance.
Worth noting is, in 2017, 11 companies posted losses grossing at Shs20.3b compared to Shs19.7b for the year ended 2018.
Eight of the 12 companies have consistently made losses in both 2017 and 2018.
However, four companies, apart from, Mayfair, which entered Uganda last year, made losses in 2018 yet had made profits in 2017.
Cause of losses
Mr Kaddunabbi, attributed the losses on increased claim settlements, lower business volumes underwritten and low premium rates charged by the insurance companies.
Changes in foreign currency, especially for international businesses, whose claims are settled in dollars, Mr Timothy Mabirizi, an insurance consultant at Redeemed Agencies, said is another reason for losses.
In 2018, insurance companies raised a total of Sh855b in gross written premiums but a huge chunk of this was raised by two companies, which underwrote premiums in excess of Shs100b.
Mr Kaddunabbi, attributed the losses on increased claim settlements, lower business volumes underwritten and low premium rates charged by the insurance companies.
Changes in foreign currency, especially for international businesses, whose claims are settled in dollars, Mr Timothy Mabirizi, an insurance consultant at Redeemed Agencies, said is another reason for losses.
In 2018, insurance companies raised a total of Sh855b in gross written premiums but a huge chunk of this was raised by two companies, which underwrote premiums in excess of Shs100b.
According to IRA, the 12 loss making companies made up slightly above Shs119b of the total gross written premiums.
Data representing particular claims settled by individual companies is expected to be released in the sector annual report in July.
Mr Kaddunabbi said insurance companies that have persistently posted losses could need to review their operation and management costs to ensure they save money to sustain their business.
According to IRA, the 21 general insurers in the three months of 2018, spent Shs31.7b in maintenance costs.
Data representing particular claims settled by individual companies is expected to be released in the sector annual report in July.
Mr Kaddunabbi said insurance companies that have persistently posted losses could need to review their operation and management costs to ensure they save money to sustain their business.
According to IRA, the 21 general insurers in the three months of 2018, spent Shs31.7b in maintenance costs.
How insurance firms make money
The insurance sector in 2018 raised its gross written premiums to Shs855b from Shs728.5b in 2017.
Insurance companies earn money from, among others, investment income earned on premiums withheld.
The insurance sector in 2018 raised its gross written premiums to Shs855b from Shs728.5b in 2017.
Insurance companies earn money from, among others, investment income earned on premiums withheld.
Underwritten
losses, Mr Timothy Mabirizi, an insurance consultant at Redeemed
Agencies, said do not include investment income earned.
Nonetheless, non- life companies grew their profits in the period under review to Shs19.8b from Shs3.1b in 2017, a 538 per cent growth.
This essentially means that general insurance companies making money are making superfluous profits while those that are making losses are deeply entrenched in their sorrows.
Nonetheless, non- life companies grew their profits in the period under review to Shs19.8b from Shs3.1b in 2017, a 538 per cent growth.
This essentially means that general insurance companies making money are making superfluous profits while those that are making losses are deeply entrenched in their sorrows.
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