Claims worth Shs225.5b were paid out by the insurance sector in the third quarter of 2020. pHOTO | file
Insurers paid out claims worth Shs225.5b in the third quarter of 2020. However, the sector collected Shs818b in premiums.
Insurance
companies shoulder risks that customer would otherwise face in case of
an occurrence, for example, a fire, at a fee known as premium.
Shouldering
the risk signifies that an insurance company will pay out money defined
as a claim to a customer on the off chance that the insured occurrence.
Uganda’s insurance industry comprises nine life insurance
companies, 21 non-life insurance companies, two micro insurers and five
health membership organisations.
Data released by the Insurance
Regulatory Authority (IRA) yesterday indicate that insurance companies
paid out more claims between January and September 2020 compared to the
same period in 2019.
Customers collected claims worth Shs225.5b in the third quarter of 2020 compared to Shs200.7b in 2019.
Non-life,
otherwise known as general insurance companies, paid out the most
claims, recording Shs112.5b in net claims, compared to shs82.1b paid out
by life companies.
The five licensed health membership organisations
paid out Shs30.7b in claims and micro insurers paid Shs44.7m. According
to IRA, increased claims pay-out builds confidence in the sector, which
could explain the increase in written premiums.
The industry
registered a 9.3 per cent growth in premiums, collecting Shs818b in the
third quarter of 2020 compared to Shs747.6b during the same period in
2019.
The performance, albeit good, was still lower than the average
growth of more than 10 per cent, which Mr Alhaj Kaddunabbi Ibrahim
Lubega, the IRA chief executive officer, said was partly affected by
unfavourable macro-economic conditions occasioned by Covid-19.
“Growth
of 3.1 per cent was registered in 2019/20 compared to 6.8 per cent in
2018/19, much lower than the previous year, largely due to the reduced
global demand,” he said.
Individual performance
General
insurance companies contributed most to the premiums written,
registering Shs524.8b reflective of 64.1 per cent of gross written
premiums while the life segment wrote Shs237.5b, representing 29 per
cent of gross written premium.
Health membership organisations wrote Shs55.9b while micro insurance companies posted Shs373.9m in premiums.
Jubilee
Insurance, UAP, Sanlam, Britam and Insurance Company of East Africa
were the top five leading general insurance companies in gross written
premiums.
Jubilee, ICEA, Prudential, UAP and Liberty were the leading life insurance companies that collected the highest premiums.
Challenges
According to Mr Kaddunabbi, the
sector was affected by Covid-19 with related effects such as lockdown
that slowed down economic activities and low consumer awareness among
others.
Achievements
The insurance sector adopted innovations during the year, influenced by Covid-19 restrictions.
Players
in July launched the online motor third party payment portal, which has
seen sales in excess of Shs8.8b paid through the platform for more than
116,000 policies.
The industry is also expected to start
implementing local marine insurance in the quarter ending March 2021,
after facilitating frameworks were developed and signed off.
The regulator is also in the process of setting up the insurance appeals tribunal which will settle disputes in the industry.
On the agenda for 2021, IRA reveals plans to ensure operationalisation of the Insurance Act, finalising the pending regulations and the new motor vehicle insurance law.
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