When heavy rains recently pounded Kampala, they left behind more than just flooded streets and traffic chaos. In the city’s bustling downtown, the floods washed away millions worth of merchandise, leaving traders in despair. What was once a hub of business activity quickly turned into scenes of loss and heartbreak – soaked goods, shuttered shops, and livelihoods swept away in muddy water.
In the aftermath, one question lingered in many conversations: What if we had insurance?
For some, it was a painful realisation that insurance could have offered a lifeline – a way to recover at least part of their losses. But for many, it was a reminder of how little they knew about it. Despite its potential to protect against risks, insurance remains largely misunderstood among traders. Some view it as a savings scheme, while others don’t trust it.
According to the Uganda Insurers Association (UIA) market survey on Insurance Coverage and Needs among KACITA Members and Affiliate Trader Associations, only 4 percent of respondents currently have insurance cover. Awareness, however, stands slightly higher at 16 percent, with the highest rates recorded in Greater Kampala (4.4 percent), followed by Mbarara (4 percent) and Mbale (2.5 percent).
This gap, the report notes, highlights an urgent need for insurers to do more than just raise awareness. They must turn awareness into actual uptake, especially among small and medium sized traders who remain most vulnerable to shocks like floods and fires.
At Nabukeera Plaza, one trader pointed to the waterlogged floors of his shop. ‘All the buildings – Pentagon, Capital, Nabukeera – flooded. We have lost around Shs100 million, as you can see,’ he said.
Nearby, a woman who sells household items watched helplessly as her stock of carpets, towels, and mosquito nets floated away. She had just restocked a day before the flood. Like many others, she resorted to selling what little she could salvage at throwaway prices, hoping to recover part of her capital.
In total, more than 20 commercial buildings were affected, exposing the magnitude of losses traders have suffered and reigniting debate about the role of insurance in protecting businesses from financial shocks.
So, could insurance have saved them? If yes, why do a few traders have it?
Findings from the same UIA report reveal that lack of information is the biggest barrier to insurance uptake – cited by 42 percent of respondents. This is followed by the high cost of premiums (32 percent) and delays in claim payments (12 percent).
Alex Ngirimana, who owns a ladies’ salon in the basement of Parkview Plaza, was among those affected by the recent flooding. He recalls receiving a distressing phone call alerting him that water had submerged his salon.
‘When I got there, the water had already reached halfway up the room,’ he said. ‘A few items were destroyed – the seats, hair extensions, and some other equipment.’
Asked whether insurance could have helped him recover from the loss, Ngirimana admitted he does not understand how it works.
‘I don’t understand insurance or how it operates,’ he said. ‘In Rwanda, I have seen how health insurance works – money is deducted from people every year, and you can actually see the benefit when you fall sick. But here, it’s different. No one has ever come to explain or engage me about it.’
Perceptions
BD Life spoke to Hamza Mutebi, the chief executive officer of SWICO Insurance, said most traders are hesitant to take up insurance due to a perception problem – a matter of believability. He explained that many traders doubt insurers will compensate them when calamity strikes, yet, in reality, 50 percent of what SWICO collects from the public is paid back in form of claims.
’90 percent of those buildings have insurance,’ Mutebi said. ‘The buildings, not the traders because those buildings are mortgaged in banks, and every mortgage must carry property insurance.’
But the challenge lies in perception which can be addressed through experience.
‘You can’t learn how to swim by reading a book about swimming,’ he explained. ‘You have to test the water – step in at some point..’
Mutebi added that SWICO is now working on new innovative insurance products tailored for traders and those affected by market fires and other calamities. The company, in collaboration with the local government and the Kingdom of Buganda, is developing a market-specific insurance product expected to launch early next year.
‘We are working on something specifically for traders that will help them appreciate the importance of risk mitigation.’
Bridging trust and knowledge gap
According to Ibrahim Kaddunabbi Lubega, the chief executive officer of the Insurance Regulatory Authority (IRA), the floods have underscored how crucial insurance literacy and preparedness are for business continuity.
‘We have made insurance awareness and education a top priority,’ he said. ‘We recently acquired a mobile awareness truck that is already moving through various communities – starting with the central region – to engage traders where they are.’
‘Disasters like floods are unpredictable. But insurance provides a cushion when they happen. We encourage every business owner to ask questions, and learn how insurance can secure their enterprises and future.’
He also pointed out that microinsurance products tailored for small business owners already exist and are accessible through SACCOs, market associations, and digital platforms.
‘We’ve encouraged insurers to use simple language and flexible payment options so that even the smallest trader can benefit,’ he noted. ‘My message to traders is this – when an insurance agent approaches you, don’t dismiss them. They are there to help you understand what protection suits your business best.’
On the issue of mistrust, Kaddunabbi clarified that most legitimate claims are paid.
‘In 2024, Shs442.73 billion was paid in claims – representing 43.6 percent of the industry’s total gross written premiums,’ he said. ‘Insurance is built on trust, and we are committed to ensuring that trust is never broken.’
Risk planning
Kaddunabbi notes that disasters like the recent floods are a wake-up call for traders to rethink how they plan for risks.
‘These floods have shown how important it is for traders to think about insurance as a key part of doing business, not as an extra,’ he said. ‘Just like you budget for rent or electricity, you should also plan for insurance. Climate change is not going away,’ he cautioned. ‘The best we can do is prepare.’
He revealed that IRA is working with insurers to develop products that directly address climate-related risks, ensuring that small and medium enterprises are better protected.
For most traders, the absence of any form of backup plan will continue to cost them. The survey further found that businesses are exposed to multiple risks – theft and burglary (76 percent), fire outbreaks (47 percent), and unstable commodity prices (36 percent) among the most common.
To cope, many rely on personal savings (34 percent) or borrow money (32 percent) to bounce back. Others secure their premises better (31 percent) or join village savings and loans associations (11 percent).
But only 2 percent mentioned insurance as a risk management measure – a statistic that clearly reflects the deep trust gap the sector still faces.