Bank of Uganda challenges insurance industry to rebuild trust and unlock growth in agriculture, small businesses 

Uganda’s insurance sector faces a defining moment, with regulators urging a shift from transactional business practices to trust-driven service delivery that can unlock financing and resilience for farmers and small businesses.

Speaking at the annual conference of the Insurance Brokers Association of Uganda on April 23, 2026, Augustus Nuwagaba, Deputy Governor of the Bank of Uganda, said the sector must confront a deep-rooted trust deficit that continues to limit insurance uptake across the country.

Under the theme “Insurance Trust Re-imagined on Promise,” Nuwagaba described trust as the missing link in a sector whose penetration remains below one percent of GDP—among the lowest in Sub-Saharan Africa.

“In a country of over 45 million people, the vast majority remain financially exposed to risks that can push families and businesses into poverty,” he said, noting that lack of confidence in claims settlement, not affordability, is the primary reason many Ugandans avoid insurance.

Trust deficit undermining financial inclusion

The Deputy Governor pointed to longstanding concerns, including delayed claims, complex policy exclusions, and perceptions that insurers avoid payouts, as key drivers of public scepticism.

He argued that rebuilding trust is essential not only for the insurance industry but also for broader financial inclusion and economic transformation, particularly in high-risk sectors such as agriculture and small and medium enterprises (SMEs).

“These sectors represent not merely a market gap, but a promise waiting to be made and kept,” Nuwagaba said.

Agriculture, which employs the majority of Ugandans, remains largely uninsured despite increasing climate-related risks, while SMEs, considered the backbone of the economy, continue to operate without adequate protection against business disruptions, liability, and asset losses.

Insurance seen as catalyst for credit expansion

The central bank highlighted the critical role insurance can play in de-risking lending and expanding access to finance. By providing reliable risk cover, insurers can enable banks and other financial institutions to extend more credit to farmers and small businesses.

Nuwagaba emphasized that insurance must evolve beyond traditional risk transfer to become an enabler of investment and economic activity.

“When insurance companies hold significant asset portfolios and participate in capital markets, their stability becomes a matter of systemic importance,” he said, adding that the performance of insurance products increasingly affects confidence in the wider financial system, including banking through bancassurance models.

Industry urged to reform practices

To restore confidence, the Deputy Governor outlined key reforms needed across the industry, starting with greater transparency in product design and communication.

He warned against complex policy language and hidden exclusions, describing them as “instruments of betrayal” that undermine the core promise of insurance.

Claims processing was identified as the ultimate test of credibility, with calls for faster, fairer, and more dignified handling of customer claims.

Insurance brokers, positioned as intermediaries between insurers and clients, were singled out as critical actors in rebuilding trust. Nuwagaba urged them to prioritise client interests over commissions, uphold ethical standards, and actively advocate for policyholders in disputes.

Digital innovation and inclusion

The speech also underscored the role of technology in expanding access to insurance, particularly for underserved groups such as smallholder farmers, boda-boda riders, and informal traders.

Digital platforms, parametric insurance products, and partnerships with fintech firms were highlighted as tools that can extend coverage to millions who have never held insurance policies.

“Re-imagining trust also means re-imagining access,” Nuwagaba said, urging brokers to embrace innovation or risk being overtaken by technological disruption.

Aligning with national development goals

The Deputy Governor noted that a stronger insurance sector is essential to achieving Uganda’s long-term development ambitions, including financial inclusion targets and Vision 2040.

He welcomed ongoing collaboration between the central bank and the Insurance Regulatory Authority of Uganda in deepening the financial sector and called on industry players to act as partners in building economic resilience.

Growth opportunities ahead

Despite current challenges, Nuwagaba expressed optimism about the sector’s potential, citing Uganda’s young population, expanding middle class, and growing asset base as key drivers of future demand.

He also pointed to regional opportunities within East Africa, encouraging Ugandan brokers to build credibility that can position them competitively beyond national borders.

Ultimately, he framed the future of the industry around a simple but powerful idea: the promise.

“Insurance is the institutionalisation of a promise,” Nuwagaba said. “When that promise is kept, when a farmer is protected from drought or a business recovers from loss, trust is rebuilt, one life at a time.”

The message to industry players was clear: restoring trust is no longer optional—it is the foundation upon which the sector’s growth, and its contribution to Uganda’s economy, will depend.