Janati Kakongoro, Market Development Officer at Insurance Regulatory Authority of Uganda
Over the years, the insurance industry in Uganda has played a pivotal role in driving employment growth, offering a wide range of direct job opportunities within insurance companies, brokerages, and agencies, while also indirectly supporting thousands of additional roles across related sectors such as healthcare, legal services, information technology, and financial consulting.
According to the IRA Annual market report 2023, the sector directly employed 6,326 professionals, including underwriters, claims adjusters, marketing, and administrative staff). The extensive network of insurance agents and brokers has fostered numerous entrepreneurial opportunities, enabling individuals to earn commissions and establish their own businesses. With the increasing gross written premiums from Ushs 1.184 trillion in 2021 to Ushs.1.76 trillion in 2024, presents an opportunity for agents and intermediaries, offering a path to financial independence, even for part-time workers. In addition to generating direct employment, the protection and financial stability offered by insurance has enabled business to take calculated risks and expand their enterprises. In turn, this has stimulated broader economic activity fostering job creation across various sectors such as construction, manufacturing, retail, and professional services.
Insurance serves as a vital shield against unforeseen expenses for both individuals and businesses. For individuals, it alleviates the financial burden of unexpected medical care, property damage, and other personal liabilities, allowing them to maintain their purchasing power even during challenging times. This financial stability contributes directly to sustained consumer demand and overall economic growth.
For business enterprises, insurance provides protection against costs arising from property damage, liability claims, business interruption, and other operational risks. When business operations are de-risked, they can maintain stability, invest confidently, and continue to contribute to economic activity.
As a formal and regulated industry, the insurance sector is consistently contributing to government revenues through various taxes; insurance companies are paying corporate taxes on their profits, value-added tax (VAT) on services rendered, and other levies. Similarly, employees within the sector are paying their Pay- As-You Earn (PAYE) income tax, and agents contribute through their business taxes. These tax contributions are crucial for the government to fund public services, develop infrastructure, and implement social programs, all of which are essential for broader economic development.
These tax revenues play a vital role in enabling the government to finance essential services supporting our healthcare system, improve education facilities, support the development and maintenance critical infrastructure especially the transport networks like roads, and providing accessible utilities like clean water. These revenues are instrumental in implementing social welfare programs aimed at reducing poverty and promoting inclusive growth, all of which are fundamental drivers of long-term economic development and national prosperity.
Insurance products, particularly life insurance policies, inherently promote a culture of saving and long-term investment among individuals and households. Policyholders pay regular premiums, which, for many, represent a disciplined form of saving towards future financial goals such as retirement, education, or wealth accumulation. These savings are then pooled by insurers and invested back into the economy, as discussed under capital mobilization. By encouraging individuals to put aside funds that might otherwise be spent, insurance not only provides financial security but also transforms individual savings into collective investment capital, fueling economic growth from the grassroots level upwards. This fosters financial prudence and resilience across the population.
The insurance sector plays a vital role in capital mobilization. Insurance companies collect substantial premiums from a vast pool of policyholders. These collective funds, instead of being held idle, are strategically invested in various long-term financial instruments within the economy. In Uganda, insurers channel significant capital into government securities, equities, and other productive assets. This consistent flow of capital indirectly fuels critical infrastructure development projects, stimulates private sector investment, and facilitates the growth of various industries. By pooling small, individual contributions into large investable sums, insurance acts as a vital conduit for directing domestic savings towards national economic expansion.
In conclusion, the insurance industry is indispensable for facilitating economic development. While its primary role is risk management, it also acts as a powerful catalyst for economic growth. Insurers achieve this by mobilizing substantial capital through premiums, which they then channel into diverse productive sectors. This fosters long-term investment, infrastructure development, and job creation
The Writer is Janati Kakongoro, Market Development Officer at IRA
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