Ugandan insurers are gradually making strides in securing risks within the oil and gas sector, particularly in projects like Tilenga, Kingfisher, and the East African Crude Oil pipeline. While local insurers face challenges in getting significant foreign reinsurers to de-risk projects in the Albertine, they have retained some risks locally. The #StopEACOP campaign posed challenges, targeting major foreign reinsurers like Munich Re, Hannover Re, and SCOR.
The Insurance Consortium for Oil & Gas Uganda (ICOGU) has played a role in pooling local capacity to de-risk the oil sector. Despite retaining only a small portion of the risk locally, ICOGU has seen success, having written over $24 million in premiums to date. The Consortium has negotiated favorable terms for insurers in the oil and gas industry, allowing them to engage in risky endeavors with shared resources and expanded capacity.
Premiums for 2023 indicate progress, with ICOGU handling contracts for the Tilenga, Kingfisher, and East African Crude Oil pipeline projects. The Consortium faced challenges negotiating favorable terms with international insurers due to insurance complexities and alignment with regulatory frameworks.
Challenges persist in the Ugandan insurance sector, particularly in reinsurance. As of the end of 2023, the Insurance Regulatory Authority had only two reinsurance companies – Uganda Re-Insurance Company Limited and Kenya Reinsurance Corporation Uganda – SMC Limited. Some stakeholders advocate for the establishment of a reinsurance fund to ensure a larger portion of insurance premiums stays in the country.
