Marine insurance is moving from the margins of Uganda’s import business to the centre of the country’s trade conversation as pressure grows on cargo operators, insurers and regulators to build a logistics system that is faster, cheaper and more resilient against rising global and regional risks.
What was once viewed by many traders as a technical requirement buried within shipping documentation is increasingly being reorganised as a strategic business tool capable of protecting supply chains, reducing avoidable costs and improving the efficiency of cargo movement across East Africa’s trade corridors.
That shift came into focus following the signing of a Memorandum of Understanding (MoU) between the Uganda Cargo Consolidators Association (UCCA) and Liberty General Insurance Uganda.
Industry stakeholders believe this partnership could influence how marine insurance products are distributed, understood and integrated into Uganda’s import ecosystem.
At the heart of the agreement lies a broader question now confronting the country’s insurance and logistics sectors: can marine insurance evolve from a reluctant compliance obligation into a practical commercial solution for businesses operating in increasingly volatile trade environments?
For insurers and reinsurers, the answer could determine the next major growth frontier in Uganda’s non-life insurance market.
From compliance to commercial strategy
Speaking during the partnership engagement, UCCA chairman Kenneth Ayebare said the agreement was deliberately structured around cooperation, awareness and convenience rather than coercion.
“This MoU is not intended to force insurance cover onto our members. Rather, it is meant to create a framework of cooperation focused on accessibility, convenience and awareness,” Ayebare said.
His remarks reflect a broader reality within Uganda’s cargo industry, where traders already contend with customs procedures, taxes, documentation requirements and fluctuating shipping costs.
In such an environment, industry leaders acknowledge that marine insurance uptake will only increase if traders perceive it as adding operational value rather than creating another administrative hurdle.
Ayebare argued that convenience would ultimately determine whether marine insurance becomes embedded in everyday cargo operations.
“If Liberty demonstrates convenience, efficiency and value to our members, then naturally members will be encouraged to take up insurance solutions,” he said.
Opportunity for insurers
Traditionally, many marine insurance products across African markets have struggled with low penetration, partly because businesses associated insurance with delayed claims, complex documentation and limited understanding of policy protections.
However, with cargo volumes increasing and supply chains becoming more exposed to geopolitical shocks, theft, accidents and transit disruptions, insurers are now positioning marine cover as a critical risk management tool rather than a mere regulatory checkbox.
For the insurance industry, the evolution could expand premium growth opportunities within trade-related business lines, especially as governments across the region tighten enforcement around cargo protection requirements.
The hidden cost traders are paying
Peter Mahano, managing director of Liberty General Insurance Uganda, says the commercial logic behind stronger marine insurance adoption is straightforward. He reasons that many traders are already losing money unnecessarily because insurance arrangements are often made too late in the import process.
“Too many traders are currently incurring a 1.5% surcharge simply because insurance is arranged late,” Mahano said.
He contrasted that surcharge with significantly lower marine insurance premiums that can range between 0.2% and 0.4% of cargo value. “Why lose 1.5% when you can insure at 0.4%? This is about making smarter business decisions and reducing unnecessary costs while protecting your goods throughout the journey,” he said.
That pricing disparity is becoming increasingly important in Uganda’s import economy, where businesses are operating under tightening margins, volatile freight charges and currency pressures.
For many importers, the difference between profitability and loss can now hinge on percentage points that previously appeared insignificant. However, the implications for insurers and reinsurers are substantial.
Marine insurance is no longer being discussed solely as a post-loss compensation mechanism. It is increasingly being framed as part of trade cost optimisation, an argument that could resonate strongly with businesses seeking operational efficiency. Repositioning insurance as a cost-saving instrument rather than simply a claims product may prove critical in deepening penetration within Uganda’s largely underinsured cargo sector.
Low awareness levels
Despite the growing commercial case for marine insurance, industry players admit that awareness levels remain low among many traders and cargo consolidators, particularly smaller operators navigating already complex logistics systems.
Ayebare said education would be essential if the sector hopes to achieve meaningful uptake. “Marine insurance is still a relatively new concept for many people. People must first understand what they are joining before committing themselves,” he said.
Under the agreement, Liberty General Insurance Uganda will participate in UCCA events, organise training programmes and directly engage cargo operators to explain how marine insurance works, what risks are covered, policy limitations and claims procedures.
“Liberty Insurance will participate in our functions and organise training sessions for members. Their teams will visit offices and explain what marine insurance is, its advantages, its limitations, and how claims work,” Ayebare said.
The educational component could prove just as important as product pricing itself for insurance sector stakeholders.
Across many African insurance markets, low trust levels have often been linked to weak understanding of policy structures, exclusions and claims processes. In marine insurance, specifically, misunderstandings around coverage triggers, delays and documentation requirements have historically discouraged wider adoption.
By prioritising trader education, insurers are effectively attempting to reduce informational friction that has long limited penetration in specialised insurance classes. Stronger education and higher penetration could also create opportunities for broader risk pooling across regional trade corridors for reinsurers, particularly as East African cargo volumes continue to grow.
Global instability
The urgency surrounding marine insurance is also being accelerated by the increasingly unpredictable nature of global and regional trade routes. Ayebare pointed to instability in the Persian Gulf as well as political-related disruptions in neighbouring Kenya as examples of how external shocks can quickly affect Uganda’s cargo flows.
“We have seen instability in areas like the Persian Gulf and periodic disruptions during elections in neighbouring countries such as Kenya. Cargo gets delayed, trucks are damaged, goods are stolen, and businesses suffer losses,” he said.
These risks are no longer viewed as isolated events. For insurers, they represent a rapidly evolving risk landscape requiring stronger underwriting models, improved claims responsiveness and closer collaboration with logistics stakeholders.
For reinsurers, geopolitical uncertainty and supply chain disruptions are increasingly reshaping exposure calculations tied to marine and transit business across emerging markets.
Industry observers note that the expansion of regional trade, coupled with rising political and economic volatility globally, is likely to push marine insurance further into the spotlight as businesses seek protection against disruptions capable of wiping out working capital and destabilising supply contracts.
Efficiency, not more bureaucracy
Even as support for marine insurance grows, cargo operators are warning against introducing cumbersome compliance systems that could slow trade flows. Ayebare said traders would resist any insurance process that simply adds another administrative layer onto already demanding customs procedures.
“We sincerely hope insurance will not introduce another 50 forms on top of what the Uganda Revenue Authority already requires. If every customs entry already requires extensive documentation, then adding another layer of complicated paperwork would make the process impossible,” he said.
The message from traders is increasingly clear that products must be embedded seamlessly into cargo workflows, with minimal paperwork, faster approvals and quicker claims handling. Failure to modernise operational systems could undermine efforts to expand marine insurance adoption, regardless of the commercial benefits being promoted.
Digital integration
Beyond insurance itself, the UCCA-Liberty partnership also aligns with broader efforts to modernise Uganda’s cargo management systems through digital integration and pre-arrival processing. Ayebare revealed that discussions are ongoing with the URA to allow cargo data sharing before shipments physically arrive in the country.
“We are working on a system where data is shared before goods reach the country. Instead of waiting 45 days for cargo to arrive from Baltimore to Mombasa before processing begins, we want processing to start earlier in the chain,” he said.
The objective, he added, is to reduce cargo processing timelines dramatically. “The goal is simple: reduce processing time from several days to potentially just one day at transit points.”
That transition toward integrated digital processing could create new opportunities for insurers to embed marine cover directly within cargo documentation systems, customs platforms and logistics workflows.
On the other hand, for the insurance sector, digital integration may ultimately become one of the strongest drivers of marine insurance growth by reducing friction, improving transparency and enabling faster claims verification.
Coordinated trade ecosystem
The wider modernisation agenda also involves agencies such as the Uganda National Bureau of Standards (UNBS), particularly around pre-verification and compliance checks before goods enter the market.
Together, these developments point toward a trade ecosystem increasingly focused on integration rather than fragmentation, where customs authorities, standards agencies, insurers and logistics operators function as interconnected components of a single system.
Sarah Kagingo, vice-chairperson of the Private Sector Foundation Uganda, said stronger collaboration between institutions and businesses would be essential for Uganda’s economic competitiveness.
“We work collaboratively because our goal is to create opportunities, expand markets, and strengthen Uganda’s competitiveness,” Kagingo said.
She noted that Uganda’s macroeconomic environment continues to provide a relatively stable foundation for investment and long-term planning.
“Uganda continues to benefit from macroeconomic stability, including low inflation and a relatively stable currency. These factors are essential because they give businesses predictability, which is the backbone of investment and long-term planning,” she said.