Insurance Firms Eying Higher Returns From Oil Sector

Posted by: Kyeyune Andrew Jonathan in Uganda news November 7, 2023

Local insurance firms’ capacity to meet the growing oil and gas sector demands has been enhanced by the Insurance Regulatory Authority of Uganda.

This has been revealed by the authority’s chief executive officer, Alhaj Kaddunabbi Ibrahim Lubega.

Capacity development is the ‘heart of the matter’ if the insurance sector plans to demand a bigger share of the pie.

“The Authority has ensured that a portion of the premiums generated from the oil and gas risks is set aside to train the industry on oil and gas risks,” he said.

He made these remarks while addressing queries about foreign insurance firms oppressing the local insurers.

The Uganda Insurers Association reported in 2022 how $9.4 million in premiums had been underwritten for the Tilenga project. This project is operated by Total E&P Uganda (TEPU).

In addition to that, policies totaling to $2 million were underwritten for the East African Crude Oil Pipeline. Also, $3.2 million for the Kingfisher project operated by CNOOC Uganda Limited.

The Uganda Insurers Association CEO, Jonan Kisakye revealed how the road has been rough.

“It has not been a bed of roses because oil companies have different interpretations of the laws and contracts,” he said.

He however agrees that local insurance sector companies should double efforts in financial and human resource muscle. He said this will be needed if they are to take on huge oil and gas risks.

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