2018 ANNUAL INSURANCE MARKET REPORT 2018 ANNUAL INSURANCE MARKET REPORT 2 Insurance Regulatory Authority of Uganda | ANNUAL INSURANCE MARKET REPORT 2018 Strategic Overview of IRA Our Business Who we Are We are the Insurance Regulatory Authority of Uganda whose establishment was a consequence of Government’s adoption of the Liberalization policy which ended its role of directly engaging in the provision of goods and services and taking on the role of Supervision and Regulation. The Authority is the Supervisor and Regulator of the insurance industry in Uganda. It was established under the Insurance Act, (Cap 213) Laws of Uganda, 2000 (as amended) with the main objective of “ensuring Effective Administration, Supervision, Regulation and Control of the business of insurance in Uganda”. In addition to maintaining the safety and sound operation of insurance players, protecting the interests of insureds and insurance beneficiaries and ensuring the supply of high quality and transparent insurance services and products, the Authority commits significant efforts and resources to facilitating the development of the insurance market. Our Mission To create an enabling regulatory environment for sustainable growth of the insurance industry while upholding best practices. Our Vision A Model Regulator of a Developed and secure insurance industry Our Values The Insurance Regulatory Authority has five core values, namely: I) Professionalism - We are qualified, skilled and act with the highest standards of excellence. II) Integrity - We model ethical behaviour by conducting all matters of business with integrity. III) Accountability - We accept responsibility for our actions. IV) Transparency – We are open and honest in communication V) Team Work – We are better together. Insurance Regulatory Authority of Uganda | ANNUAL INSURANCE MARKET REPORT 2018 i Board Members Our Board is comprised of a team of passionate experts leading the corporate strategy by inspiring example. They include: Dr. Isaac Nkote Nabeta Hajjat. Aphwa K. Ssebyala Board Chairman Deputy Board Chairperson Mr. Ssegawa Ronald Mr. James Muwawu Hon. Nusura Tiperu Board Member Board Member Board Member Dr. Charles A Abuka Mr. Keith Kalyegira Mr. Martin Nsubuga Board Member Board Member Board Member Mr. Moses Kaggwa Alhaj Kaddunabbi Ibrahim Lubega Board Member Chief Executive Officer ii Insurance Regulatory Authority of Uganda | ANNUAL INSURANCE MARKET REPORT 2018 Top Management Our Management team is true to our vision, mission and values whilst putting policyholders’ safety at the centre of our regulatory mandate. The team includes: Alhaj Kaddunabbi Ibrahim Lubega Chief Executive Officer Mrs.Evelyn Nkalubo Mr.Benard Obel Mrs.Florence Nviri K Mr. Protazio Sande Muwemba Director Supervision Director Finance Director Planning. Research Director Legal / & Market Development Secretary to the Authority Muganyizi Harunah Mpala Robert Asiimwe David Ms. Mariam Head Human Capital & Head Procurement Head Internal Audit Nalunkuuma Administration Head Communications Insurance Regulatory Authority of Uganda | ANNUAL INSURANCE MARKET REPORT 2018 iii Board Chairman’s Statement The year 2018/19 was a great year in aggregate terms but keeping an eye on the details as well as the big picture is what will propel the insurance industry to the future that we desire – a future where insurance occupies a high position on the priority list and where insurance is the preferred choice of risk management. With the above food-for-thought to all stakeholders especially those in the supply-side space, I take delight in making my third statement as Chairman of the Board. n the year 2018/19, the Board remained on course indicates the need for insurers to tread judiciously to Iof its mandate and indeed significant progress remain afloat without jeopardizing the interests of the was registered. The Gross Written premiums for the policy holders. Industry increased from Ugx. 728.4 in 2017 to Ugx. 856billion in 2018 (17.51% growth) out of which The fundamentals show that the economy is poised Non-Life Gross Written Premium (GWP) contributed to remain on a steady path of growth supported Ugx. 570bn in 2018 (67%); Life Ugx. 216.9bn by robust domestic demand, public infrastructure (25%) and HMOs Ugx. 69.1bn (8%). This growth is investments, improving agricultural productivity and commendable compared to the growth of 14.75% a recovery in Foreign Direct Investments. According to which was registered in the corresponding period the National Budget Framework Paper 2019/20 which of 2017. The Insurance companies’ (including HMOs) was published in December 2018 by the Ministry financial strength measured in terms of Net Assets of Finance, Planning and Economic Development, increased by 11% from Ugx. 458bn to Ugx. 508bn the economy is projected to grow by 6.2% in the in 2018. This reflects the improved ability/capacity of FY2018/19 and to remain stable in 2019/20 with core the industry to absorb more risks locally which is a inflation remaining close to the Central Bank’s policy good indicator of a growing sector. It is even more target of 5%. The Ugx. 40-plus trillion Government impressive to note that the industry continued to budget for 2019/20 is also such a great potential for demonstrate more value to the insuring public the sector. through claims payment. In the reporting period, Gross Claims paid increased by 12% from Ugx. The signals are right and Insurance players ought 291.7bn to Ugx. 326.7bn in 2018. These figures to position themselves to benefit from these waves should sound a loud reaffirmation to the insuring of opportunities. There is need to tackle the “white public and indeed the prospects that insurers are in elephant in the house” - public trust deficit- in order to business to pay claims provided they are genuine. I maximize the dividends from the said opportunities. say genuine because the trend of fraudulent claims As reported in the Chartered Insurance Institute is also on the raise. A total of 17 cases of Insurance Survey on Public Trust in Insurance (January 2018), fraud were reported to the Authority’s Anti-Fraud Insurers need to be brave and turn the customer Unit involving amounts in excess of Ugx. 2.5bn. This relationship into one of protection and meeting iv Insurance Regulatory Authority of Uganda | ANNUAL INSURANCE MARKET REPORT 2018 needs, rather than sales and product lines. That will On behalf of the Authority Board, and indeed on my take a change of mindset and bravery. It will also take own behalf, I appreciate the confidence and trust much better engagement. the Minister of Finance, Planning and Economic Development put in us to provide strategic oversight Like I have said before, in a dynamic business to the Insurance Regulatory Authority of Uganda landscape like the one facing Insurance players, (IRA). I further extend my sincere gratitude to my averages can no longer work. As Martin Luther King fellow directors for their concerted effort and insights Jr. once opined “Our very survival depends on through the past years. Together, we have written our ability to stay awake, to adjust to new ideas, down a resounding story of consistency in regulation to remain vigilant and to face the challenge of for stable growth across different lines of Insurance change”. Indeed, in today’s business, the only variable Business. I am glad that we have been able to make our that is not changing is change itself. Thus, it is only humble contribution. The story would certainly have with each one of us re-orienting our strategies to been different without the efforts of the Authority’s keep in tandem with change and doing our best that Management and the unwavering commitment of all we shall be able to surpass the challenges on the path staff. of insurance industry in Uganda. I congratulate the Industry Leadership and The challenges ahead call for among others, rethinking Management on their impressive performance the role of insurance in society. In the information in 2018/19. We express our recognition of their age, consumers are looking out for solutions not dedication and hard work. We fully appreciate mere policies. This raises the need for collaboration the continuing commitment and support of their and engagements with non-traditional players so as shareholders and indeed their clients. to deliver to the expectations. When analysing the current trends, particularly in the digital space, it is not To this end, the board pledges its untiring support speculative to observe that the greatest competition in the coming years and looks forward to working to the insurance industry will not come from within together to deliver better in 2019/20 and beyond. but rather from those non-traditional players. This calls for Insurance Players to be open to change. “It isn’t the mountains ahead to climb that wear As Board, we remain steadfast in delivering on our you out; it’s the pebble in your shoe.” Muhammad mandate of governing the Authority to provide an Ali. Growth of the insurance industry is possible if we enabling regulatory environment for sustainable deal with the “pebbles” in the shoes. The results will business growth through effective supervision of the truly be amazing! Insurance Industry. Dr. Isaac Nkote Nabeta Chairman Insurance Regulatory Authority of Uganda | ANNUAL INSURANCE MARKET REPORT 2018 v Chief Executive Officer’s Statement It is with great pleasure that we present the financial statements for the year 2018/19. At the onset, I would like to pride in the fact that the year 2018/19 was yet another great year with most industry players maintaining a firm grip on a positive growth trajectory and an overall improvement in profitability. ggregate GWP increased by 17.51% from Ugx. Prudent underwriting should ensure that premium A728.4 billion in 2017 to Ugx. 856 billion in income grows with both underwriting profit and 2018. Non-Life GWP grew by 12.36% from Ugx.