Uganda’s planned Tenfold Growth Strategy could open up a major new market for the insurance industry, but insurers must prepare early to capture the risks and investments that will come with the country’s economic transformation, National Planning Authority (NPA) Executive Director Dr Joseph Muvawala has said.
Muvawala said the insurance industry should not wait for economic growth to happen before positioning itself, arguing that insurance must form part of the architecture supporting Uganda’s transformation.
“Insurance is not a service that becomes relevant after growth has occurred. After we have grown, insurance will come in. Big mistake,” Muvawala told insurance industry executives during the 69th Insurance Regulatory Authority (IRA) CEO breakfast meeting at Kampala Serena Hotel.
He said the Tenfold Growth Strategy presents opportunities for insurers across agriculture, tourism, minerals and oil and gas, as well as science, technology, innovation and the creative economy.
According to Muvawala, the expansion of agro-industrialisation alone will create demand for crop and livestock insurance, irrigation and warehouse cover, protection for processing facilities, cargo insurance and business interruption policies.
As tourism and infrastructure expand, he said, insurers will also be needed to cover hotels, travel, aviation, marine transport, public liability and major events.
The minerals, oil and gas sector, meanwhile, will require specialised insurance covering engineering risks, environmental liability, cargo and operational risks.
Muvawala said Uganda’s growing technology and innovation sector would equally create demand for cyber insurance, data protection, professional indemnity and technology liability products.
However, he warned that these opportunities would not automatically translate into business for Ugandan insurers.
He said local insurers need to build specialised underwriting capacity, invest in reliable risk data, strengthen risk engineering and secure adequate capital and reinsurance arrangements to handle large projects.
Muvawala also urged insurers to engage major projects at the planning, design and financing stages instead of waiting until contracts have already been signed.
He said Uganda’s shift from grant-funded projects towards commercial loans and contractor financing would create additional opportunities for insurance, but local companies risk losing this business if they are not involved early enough.
He further called for greater investment in insurance data, saying better information about risks would improve risk pooling and could ultimately help reduce the cost of insurance.
Muvawala challenged insurance chief executives to move beyond focusing only on premium collections and instead assess the industry’s contribution to protecting productive assets, enabling investment, mobilising savings and helping businesses recover quickly after losses.
He said the industry should also expand insurance coverage to bring more people and businesses into the risk pool.
Muvawala said the NPA was willing to work with the insurance industry as it aligns its products and capacity with the opportunities expected from the Tenfold Growth Strategy.
He also disclosed that he intends to bring an insurance professional into the NPA to strengthen the authority’s capacity to engage with the sector.
IRA Acting Chief Executive Officer Dr Protazio Sande said the insurance industry has a critical role to play in ensuring that Uganda’s economic ambitions are protected from risks.
Sande said as agriculture becomes more commercialised, tourism and infrastructure expand and more households participate in the money economy, insurance must grow alongside these developments.
He urged stakeholders in the sector to work together to ensure that Uganda’s economic transformation is adequately protected.
The Tenfold Growth Strategy therefore presents insurers with a market extending beyond traditional insurance products, with opportunities tied to the protection of investments, infrastructure, businesses and emerging sectors of the economy.
