The contributions of insurance industry to economic growth in Uganda.

Abstract

The study was set out to examine the contributions of insurance industry to the economic growth in Uganda. The study employed a causal study design. Since there is published information on economic growth and insurance penetration by the government agencies, primary data collected methods were not employed. Secondary data was obtained from published reports of insurance regulatory authority (IRA) and Uganda bureau of statistics specifically the annual insurance reports and economic surveys respectively. The target population was all 28 insurance companies registered for operation in Uganda. The study covered from 2000 to 2017. The study used simple regression analysis to examine the contributions of insurance industry to economic growth in Uganda. Forecasting model was developed and tested for accuracy in obtaining predictions. From the study it was established that insurance companies in Uganda transact two types of businesses namely long term and general business. Insurance penetration ratio increased by 0.1% to 0.80% in 2017. The long term business accounted for 0.2% and general business accounted for 0.6%. Gross written premiums (GWP) amounted to UGX 728.53 billion in the year 2017. Enacting a modern legal framework and designating a special judicial authority to handle insurance- related cases are key requirements to enable market development by protecting the rights of policyholders and regulating the activities of market participants. Also fostering a competitive environment drives innovation, competitive pricing, and the adoption of best practices and is a key enabler for the development and growth of insurance markets.