Market trends insurers must watch in 2024

Insurance companies that adapt to trends in the industry often realise significant business growth. 

The Ugandan insurance industry is well established with its roots traced back to the colonial era. 

However, the real development of the sector took place after 1986. Today, Uganda is ranked among the leading insurance markets in Africa. We discuss some of the trends to watch out for in 2024.

Urbanisation

Urbanisation is a positive force in emerging economies. With a population of about 45 million people and a rapidly expanding middle class, Uganda’s economic activities are expected to grow.

An increase in literacy and expansion of the working population have an impact on the adoption of insurance. 

Rapid urbanisation does, however, present some negative elements such as unemployment and poverty. These can result in social unrest which may come with damage to property and increased burglary and theft claims.

Foreign investor appetite

Uganda’s growing economy has seen an increase in acquisitions and foreign investments in the insurance industry. 

The sector’s profitability has created interest from established players in the market, with groups such as Sanlam, ICEA, Liberty, Old Mutual and Allianz significantly increasing their investment. 

Uganda’s insurance sector has grown hand-in-hand with the economy. This can increase product innovation and transfer of skills into the insurance industry.

Improved data analysis and product innovation

Real-time collection of data is set to provide insight into customer behaviour, which guides product development. 

Analytics is also expected to provide data that helps spot trends, and predict outcomes for underwriting and pricing decisions that best fit the risk profile of each customer. 

Players in the insurance sector will proactively work at understanding their business opportunities, and risks presented, through data.    

We expect to see more innovative solutions from insurance companies informed by customer demands for solutions which reflect them and will adapt to their changing circumstances.

Technology and transformation 

Technology has not only transformed the way we communicate but also how we do business. 

With the increase in smart phones, we have seen customers lean more towards products that offer them convenience at a reasonable cost.

This trend is expected to influence the insurance business. Insurance companies will need to create mobile offerings that not only suit the customer but also create efficiencies within the company.

Improved customer relationship, shift in distribution channels

Organisations are increasingly emphasizing a customer-centric culture to improve the bottom line. 

Companies that build their objectives around the customer have markedly better customer retention and the resultant positive word of mouth can see an increase in business. 

New media has also become a key area to watch. To improve communication with customers and become more cost-effective, there is need for retailers to shift distribution channels with the ultimate goal of giving customers a more personalised experience.

Nicholus Sserunjogi, is a researcher at the Insurance Training College and also works with ICEA Lion Life Assurance