Key Drivers of Insurance Penetration in Uganda

• November 5, 2018
• LUTAKOME
• no comments

It’s one of the most used phrases by insurers whenever matters of common interests come
up for discussion, for Uganda insurance penetration is less than 1% and I have heard in
many forums efforts to increase penetration to match up with other markets.

I have listened to one speaker say that we need to target the 99%, the question is, is this
even possible?

The answer is NO; the insurance penetration of a country is measured as a fraction of the
gross written premium over the gross domestic product and since an economy cannot be
fully composed of Insurance Premiums, its impossible to have 100% penetration.

According to the Market Growth and Development Plan, the insurance industry under the
umbrella Uganda Insurers Association is driving the current penetration which is below 1% to
3% by 2025.

A number of factors have to be in play for the industry to reach this milestone; the economy
has to maintain a constant growth rate of 4.5% every year (which would be disastrous for the
economy); and the insurance industry registers a 25% growth every year (which is toll order
in the current set up, unless parliament implements the National Health Insurance Scheme
before 2025 as well as other supporting factors like the pension liberalization bill.
Otherwise Insurers have to brace for record breaking growth year after year, on both