Determinants of low insurance uptake among Ugandan households

Abstract

Despite modest growth in gross written premiums over the past decade, insurance penetration in Uganda remains below 1% of GDP, reflecting persistently low household uptake and a limited understanding of the demographic, socioeconomic and attitudinal factors that shape enrolment decisions. This study examined the determinants of low insurance uptake among Ugandan households, with specific objectives to assess the effects of demographic factors (age, place of residence and level of education), socioeconomic factors (income level and employment status) and attitudinal factors (insurance literacy and perceived trust) on insurance uptake. The study adopted a quantitative, cross-sectional design using secondary data from the nationally representative FinScope Uganda 2023 Survey. Data were analysed in three stages using STATA: univariate analysis to describe sample characteristics, bivariate analysis using a simple complementary log-log regression to test unadjusted associations between each independent variable and insurance uptake, and multivariate analysis using a multivariable complementary log-log model to test the study’s hypotheses while controlling for other covariates. Only 2.61% of respondents held insurance. At the bivariate level, age, place of residence, education, employment status and income were all significantly associated with uptake. After adjustment, age lost significance, while place of residence, level of education, employment status (for paid employment and NPISH) and income level remained significant predictors, with income level and education emerging as the strongest and most consistent determinants. Insurance literacy and perceived trust could not be empirically tested because the available measures were observed only among the small number of respondents who already held a policy and had filed a claim. The study concludes that low insurance uptake among Ugandan households is primarily a demographic and socioeconomic phenomenon, driven mainly by affordability, education, place of residence and access to formal employment rather than age, and recommends affordability-focused product design, simplified consumer education, expanded rural distribution channels and workplace-linked group schemes for informal workers, alongside further research using data able to independently measure insurance literacy and trust.