Why Uganda’s insurance sector is stronger than before

Over the past decade, Uganda’s insurance industry has undergone a quiet but consequential transformation. What was once a small and often misunderstood segment of the financial system has matured into a growing pillar of stability for households, businesses and the wider economy.

Between 2014 and 2024, gross written premiums more than doubled, rising to an estimated UGX 1.76 trillion in 2024 from UGX 1.60 trillion in 2023. Life insurance has been especially dynamic, expanding faster than non life and gradually reshaping the industry’s structure. Behind these headline numbers, however, is an even more important development, a sustained investment in operational resilience.

For years, performance was measured almost exclusively by premium growth. Today, that metric is no longer enough. As risks evolve and insurance products become more sophisticated, the sector must confront tougher questions. Can insurers pay claims fairly and quickly during crises? Are internal systems strong enough to withstand cyberattacks, fraud and operational disruptions? And is the industry building trust in a market where insurance penetration is still only 2 to 3 percent of GDP?

The past few years have provided real world tests of the sector’s strength. COVID 19, currency volatility, climate related losses and rising medical inflation have all strained balance sheets and exposed thin margins, especially in medical insurance where loss ratios remain high. These pressures have pushed companies to shift focus from chasing volume to building resilient and efficient operations that can support long term growth.

Regulation and risk management have tightened, prompting insurers to strengthen governance, embrace data driven decision making and adopt more robust capital and risk frameworks. Product portfolios are also evolving. Life and health products are gaining importance, offering households better protection against shocks. Distribution channels such as bancassurance, agency networks and digital platforms have expanded access, but they also require stronger cybersecurity, system integration and oversight.

Inside companies, digitisation is reshaping operations. Processes that were once paper heavy and slow are being automated. Policy approvals that previously took days or weeks are now completed within hours. Claims handling is becoming more transparent, traceable and timely. At the same time, investment in skilled professionals such as actuaries, risk managers, data specialists and frontline staff is reinforcing a culture of ethics, professionalism and customer focus.

The coming decade will introduce new challenges. Climate risk is intensifying. Medical inflation continues to pressure margins. As digital adoption accelerates, cyber threats are becoming more sophisticated. To navigate this environment, the industry must deepen its commitment to operational resilience, including sustained investment in technology and cybersecurity, responsible use of data in pricing and fraud detection, stronger collaboration among insurers and regulators, and an unwavering focus on the customer.

If Uganda maintains its current trajectory, future growth will represent more than commercial success. It will signal the emergence of an insurance sector that protects households, supports businesses and strengthens long term national development, a sector where operational resilience transforms risk into an opportunity for shared progress.