Uganda has taken a decisive step toward transforming its Marine Cargo Insurance (MCI) industry by launching a fully integrated digital platform that mandates all importers to secure insurance from local providers.
Spearheaded by the Insurance Regulatory Authority (IRA) in partnership with the Uganda Revenue Authority (URA), this reform is a strong example of how local content policies can succeed when backed by enforcement, innovation, and stakeholder coordination.
For Kenya, which already has a similar local marine insurance law introduced in 2017 but continues to struggle with enforcement and compliance, Uganda’s approach offers critical lessons.
At the heart of Uganda’s reform is a seamless online platform that connects importers, insurers, and customs authorities. The system, launched on November 6 last year, is directly linked with URA’s Electronic Single Window, ASYCUDA, and e-Tax systems, enabling real-time verification of insurance coverage at the point of customs declaration. This integration not only ensures compliance but also eliminates loopholes and reduces room for evasion, a challenge that Kenya has repeatedly faced.
“This digital platform is a game-changer. It ensures that premiums stay within Uganda while businesses enjoy quicker, more reliable claims settlements,” Kaddunabbi Ibrahim Lubega, CEO, Insurance Regulatory Authority (IRA) Uganda, said.
The shift away from foreign insurers to domestically registered providers align with Section 8(3) of Uganda’s Insurance Act, 2017. But unlike Kenya’s policy, which has faced weak enforcement, Uganda’s regulators have embedded insurance compliance within trade facilitation systems, leaving little room for importers to bypass local procurement.
The results are already evident. Gross Written Premiums (GWP) in Uganda’s insurance industry rose by 12.65% in the first half of 2024, hitting UGX 933.8 billion. Marine insurance claims paid also surged to UGX 423.8 billion, a 36% increase from the previous year, reflecting improved trust and efficiency in the claims process.
“Every shilling in premiums now contributes directly to our economy through VAT and stamp duty. This reform is not just about insurance; it’s about national economic resilience,” Ramathan Ggoobi, Secretary to the Treasury, Ministry of Finance, Uganda
Lubega, in November last year, hailed the digital platform as a game-changer that keeps insurance revenue within the country while offering businesses faster and more reliable claim settlements. Treasury Secretary Ramathan Ggoobi reinforced this sentiment, noting that premiums now contribute directly to Uganda’s economy through VAT and stamp duty—a fiscal benefit Kenya has yet to fully realize from its policy.
A unique component of Uganda’s strategy is the formation of a 20-member consortium of local non-life insurers. Backed by actuarial assessments and pooled financial reserves, the consortium ensures comprehensive risk coverage and builds market confidence. In contrast, Kenya’s insurance market remains fragmented, and efforts to create collective capacity through pooled underwriting have lagged.
Crucially, Uganda’s success has hinged on four pillars:
First is Smart Regulation and Enforcement with laws backed by automated enforcement at the customs level. Second is the institutional collaboration in IRA and URA worked closely to align insurance with trade and tax systems. Third is industry preparedness – Local insurers invested in systems, capacity, and a shared risk pool and public education and transition support – Ongoing training for clearing agents and importers, with a clear enforcement timeline.
“Uganda didn’t just pass a law—they built an ecosystem. That’s the difference Kenya must understand if it wants its marine insurance policy to work,” according to a Kenyan Maritime Trade Expert
These elements are largely absent or inconsistently applied in Kenya’s experience. Despite similar legal intent, Kenya has faced resistance from importers, poor awareness, limited digital infrastructure, and regulatory gaps that have allowed foreign insurers to continue dominating marine cargo coverage, which the recent initiative seeks to address.
Uganda’s model, in contrast, has been deliberate and phased. The government has offered a transition period ending December 31, 2024, after which legal penalties will apply for non-compliance. Ongoing support in the form of technical assistance and sensitization campaigns has helped foster goodwill and clarity among stakeholders.
The key takeaway for Kenya is clear: passing a law is not enough. Enforcing local procurement of marine cargo insurance demands a digitized system, cross-agency coordination, industry alignment, and structured public education.
Uganda’s reform shows that when these components are synchronized, local insurance uptake grows, foreign exchange leakages are reduced, and domestic industry capacity is strengthened.
As global trade becomes increasingly digitized, Uganda’s initiative has earned international recognition as a model for developing countries. Kenya would do well to revisit its 2017 policy and draw from Uganda’s success, not just to boost local insurer participation, but to build a more resilient, transparent, and self-sustaining trade environment.
This article was published by Githua Kihara, an editorial consultant for FEAFFA’s Freight Logistics Magazine. For any inquiries, please contact us via email at editorial@feaffa.com or freightlogistics@feaffa.com, or reach out to Andrew Onionga directly at onionga@feaffa.com / +254733780240.
