The insurance markets in the East African Community (EAC) appear set for strong premium and penetration growth over the next five years, according to research by Timetric’s Insurance Intelligence Center (IIC).

The EAC includes Kenya, Tanzania, Burundi, Uganda and Rwanda.  Optimism about the EAC’s insurance markets is based on a range of favourable conditions, such as political stability and solid economic growth.

The IIC white paper, East African Collaboration All Set For Great Success, says enhanced regional cooperation has led to increased foreign investment and a substantial number of infrastructure projects, both of which are driving the economies and in turn the EAC’s insurance sectors.

As an example of infrastructure projects, the Kenya to Ethiopia road, will improve access and huge developments in Mombasa, Nairobi, and Dodoma have boosted the strengthening economies.

Chris Saigbe, head of life at Africa Re, explains the attraction to foreign investors: “Investment is growing in Kenya, Uganda, Tanzania and Rwanda as a result of favourable investment policies of governments, relative peace and security as well as well-developed infrastructures.”

These factors have led to positive results–double-digit percent growth in every country between 2010 and 2014 in premiums.

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Yet penetration rates in EAC remain remarkably low: 0.35% in Rwanda; 0.85% in Uganda and 3.2% in Kenya.

These low rates, combined with rapid urbanization and an expanding middle class across the countries, mean the potential for insurers is vast. However, it does require a long-term view to transform these opportunities to results.


According to the IIC, the main factor restricting insurers is the lack of regulation around the pricing of premiums.

Intense competition in the EAC has led to constant undercutting and consequently extremely low – or often no – profit margins on writing insurance in the region.

There is hope this can be partly resolved with the adoption of Solvency II. However, the main target for insurers remains educating and reaching out to the wider population, as there is a huge untapped market which has previously had no access to insurance.

Low-cost healthcare schemes have already been successful in Tanzania and Rwanda, which highlights that people can be brought into the market if they are reached out to.

Rwanda’s Mutuelles de Sante government scheme, for example,  has been particularly successful, resulting in 91% of the population having some form of health cover – up from 1% in 2000.

Overall, since insurance is typically correlated to economic strength the EAC’s recent economic growth bodes well for the insurance market.

The GDP in Sub-Saharan Africa (excluding South Africa) increased by 4.2% in 2015, above the overall continent’s 3.6%, while East Africa eclipsed both, with GDP growth of 6.3%.


Key product lines

The IIC report says traditional individual life products in the EAC are term assurance, whole life and endowment.

Investment policies vary according to the insurer, but they are generally designed to offer children’s education, retirement (deferred annuity), house purchase and saving towards a project.

The main distribution channels in the EAC are brokers, agents (tied or independent) and direct marketers. Brokers dominate the distribution of group life and group mortgage, while agents dominate the distribution of individual life products.

To access the full IIC white paper, visit