COVID-19 pandemic pushes 3 insurers out of business

But the insurance industry still has room for future growth

Kampala, Uganda | ISAAC KHISA | Coronavirus pandemic has forced three insurance players to cease operations in Uganda amidst government’s decision to ease restrictions this year to salvage the economy.

Metropolitan Life Uganda, which opened shop in 2017 targeting low income earners with micro-insurance products, has since voluntarily stopped operation. However, it remains unknown the insurer that will be taking over its assets and clients.

The insurer had since its inception recorded a slow growth in insurance premiums with the latest data from Insurance Regulatory Authority of Uganda indicating that it registered a merely 0.12% growth in  premiums to Shs 8.823billion as at the end of fourth quarter of 2020.  This placed it in the ninth position out of the nine life insurers, with a market share of 2.7%.

Other insurance players that have ceased operations effective this year include; St. Catherine’s Medicare Limited, which operated under the Health Membership Organisation (HMO) category and International Air Ambulance (IAA), formally an HMO, whose business have been transferred to Prudential Assurance Uganda following a buyout last year.

In addition, Uganda Global Survey Limited, which operated as a loss assessor, adjuster and risk advisor, whose license was revoked and Futures Properties Consultants, whose license expired, will not conduct insurance services this year.

Ibrahim Kaddunabbi Lubega, the chief executive officer at the IRA said the public should deal with only licensed insurance players and in case of any dissatisfaction, to lodge a complaint with IRA’s Complaints Bureau for redress.

So far, about three insurers – AIG, lion Assurance Company and NOVA – have exited the Ugandan market in the past five years. However, new ones including GA and Kenya Re have also entered the market during the same period.

The country’s insurance industry has consistently recorded a surge in premiums with the gross written premiums increasing from merely Shs 463billion in 2013 to Shs1.06trillion in 2020 on the back of government investment in infrastructure such as Karuma and Isimba Power Dams, Kampala-Entebbe Expressway and Entebbe International Airport expansion.

However, insurance penetration remains at less than 1% compared with South Africa, Namibia, Lesotho and Kenya, whose insurance penetration stands at 16%, 6.6%, 4.7% and 3.4%, respectively.

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