For decades, insurance in Uganda was largely perceived as a service for wealthy individuals, large corporations and formally employed workers. But this picture is rapidly changing as a wave of digital innovation transforms how insurance is delivered, purchased and experienced across Uganda.
Many Ugandans in the informal economy, including market vendors and small business owners, are beginning to pay attention to insurance against illness, accidents, theft, fire and other unexpected shocks.
Through mobile money platforms, embedded insurance products, fintech partnerships and simplified digital processes, microinsurance is steadily emerging as one of the key tools for extending financial protection to low-income populations.
According to the Insurance Regulatory Authority of Uganda (IRA), microinsurance premiums surged by 131.4% in 2024, rising from UGX700 million (about US$195,000) in 2023 to UGX1.64 billion (approximately US$460,000) in 2024. The momentum accelerated even further in 2025, with premiums growing by more than 341% in the first quarter compared to the same period the previous year.
The number of Ugandans covered by microinsurance products has also risen from about 62,000 people in 2024 to more than 111,000 by mid-2025. Over the same period, the number of insured individuals in Uganda increased from about 406,000 to more than 506,000.
Technology’s transformational role
Unlike traditional insurance models that often require customers to visit branch offices, fill out paperwork and endure lengthy claims processes, many modern microinsurance products are now available through mobile phones and digital financial platforms.
Through partnerships between insurers, mobile network operators and fintech companies, Ugandans can register, pay premiums and receive benefits without ever stepping into an insurance company’s office. The model is particularly effective in Uganda because of the widespread adoption of mobile money.
One of the leading innovators is insurtech company, Turaco, which has partnered with Airtel Money and other digital platforms to distribute affordable insurance products. Rather than requiring customers to actively search for insurance, the company embeds protection into services people already use.
Increasingly, insurance is being bundled into products such as digital loans, smartphone financing and mobile financial services. Customers receive coverage as part of a broader service package, making insurance both convenient and accessible.
Technology bridging trust
For years, many Ugandans avoided insurance because they viewed it as complex and doubted whether claims would ever be paid. However, digital innovations are helping change that perception by simplifying products, reducing paperwork and speeding up claims processing.
Some insurers now communicate policy terms through simple SMS messages written in easy-to-understand language. Claims that once took weeks to process can increasingly be verified and settled through digital platforms, improving customer confidence.
When Turaco acquired its underwriting licence in Uganda, the company indicated that some of its products would be structured so that policy terms could be explained through just a few SMS messages. The approach is designed to make insurance understandable even for first-time users.
According to Keto Kayemba, the board chairperson of the Insurance Regulatory Authority of Uganda, insurance penetration is set to rise when customers consistently experience reliability, when products are simplified and accessible, and when insurance becomes a natural part of economic life.
“We must drive scalability and keep shaping policies that allow innovation to thrive. Together, we can transform insurance from a reluctant purchase into a trusted guarantee. That way, innovation shall deliver real impact, and insurance will become a sure deal for millions of Ugandans,” she said.
Affordability as a major focus
Affordability has also been a major focus. Many microinsurance products are designed with very low premiums, making them accessible to people with irregular incomes. This has opened opportunities for workers in the informal sector who have traditionally been excluded from conventional insurance products.
Speaking to insurance stakeholders recently, the minister for Finance, Planning and Economic Development, Henry Musasizi, said innovation must play a central role in expanding insurance coverage.
“You need to focus on microinsurance solutions, leverage technology, and design customer-centric products to boost insurance uptake, which currently stands at below 1%,” Musasizi said.
Despite recent growth, insurance penetration remains among the lowest in the region, meaning millions of Ugandans still lack financial protection against unexpected events.
Former IRA chief executive, Ibrahim Kaddunabbi Lubega, said “Digital innovation lowers costs, expands reach, and improves operational efficiency. Through digital platforms, insurance can now be accessed anywhere, at any time, without physical branches.”
For example, Lubega noted that digital distribution allows insurers to reach rural communities where traditional agency models are not economically viable.
Emmanuel Sanyu Safali, director of Promise Esaf Insurance Promoters (Uganda) Ltd, pointed to the health insurance sector as a clear example of this transformation.
“Digital onboarding and claims management systems currently support more than 500,000 insured clients, demonstrating the ability of technology to efficiently handle large volumes while improving service delivery,” he noted.
Enormous opportunities remain
However, the growth opportunities are enormous. The greatest potential lies among Uganda’s millions of small businesses and informal workers.
Lubega said micro, small and medium enterprises (MSMEs) operate in an increasingly risky environment shaped by climate change, inflation and other economic uncertainties. Yet the vast majority remain uninsured.
“Growth does not come only in being courageous but also from being prepared, protected and confident,” Kaddunabbi said, further noting that risks such as fire, theft, equipment breakdown, accidents and health emergencies can easily disrupt or completely shut down a business.
His warning resonates with many entrepreneurs who have learned the hard way that a single disaster can wipe out years of investment. Uganda Small Scale Industries Association (USSIA) chairperson Joseph Mulindwa said many small business owners previously believed insurance was only meant for wealthy people and large corporations.
“We had nowhere to run to. There were always rumours that insurance could help us but we did not have concrete information about how it works. Insurance engagement has helped us know how beneficial insurance is and we believe as MSMEs going forward, we will embrace it,” Mulindwa said.
Erimu Marcos, a senior research officer and contract manager at IRA, said that what became clear during the recent insurance innovation awards process was that the sector is not short of ideas.
“If anything, insurers seem to have been quietly innovating while the rest of us assumed they were still debating paperwork,” he said.
According to him, combining technology with traditional insurance distribution channels offers one of the most effective ways to expand coverage among low-income populations.
Challenges remain
Despite the progress in the sector, Lubega says individuals and businesses are grappling with some of the most complex challenges, including climate change, cyber threats, health shocks, and supply chain disruptions.
“The question now is whether insurance can evolve quickly enough to stay trusted. That evolution depends on innovation, not as a side project, but as a core way of doing business,” he said.
Sande Protazio, the acting CEO at IRA, said longstanding barriers such as limited awareness, affordability constraints and distribution challenges also highlight an enormous opportunity for innovation.
“Digital platforms, mobile technology and data-driven products can enable insurers to reach communities that traditional distribution models have struggled to serve,” he noted.