Local insurance firms have banded together under the Insurance Consortium for Oil and Gas Uganda (ICOGU), collectively underwriting a significant portion of the insurance needs for Uganda’s burgeoning oil and gas sector. In 2023, these firms secured $13 million (approximately Shs50.4 billion) out of a total investment of $20 million (about Shs77.6 billion), signaling a growing confidence in the sector’s potential.

Key projects such as the crude oil pipeline and the KingFisher project have been among those insured, with a focus on mitigating risks associated with oil and gas exploration and production.

The Consortium, led by Mr. James Maguru, has already extended coverage to major ventures like the Tilenga, Kingfisher, and East African Crude Oil Pipeline (EACOP) projects, with plans for further expansion.

For instance, the Tilenga project, one of the largest endeavors, saw the issuance of three policies covering various risks, generating a premium of $12.8 million. Similarly, policies for the EACOP project yielded $2.3 million, while the Kingfisher development project contributed $5 million to the total underwritten amount.

However, despite these initial strides, only about 64 percent of the underwritten premium has been collected thus far, reflecting the challenges inherent in such ventures.

Denzel Mensah, a Chartered Insurance broker at Price Forbes & Partners, emphasized the cautious approach necessary in dealing with the substantial risks associated with the oil and gas industry.

Recognizing the need for capacity building, the insurance sector has convened a three-day symposium to address the opportunities and challenges in Uganda’s evolving oil and gas landscape.

Janan Kisakye, CEO of the Uganda Insurers Association (UIA), highlighted the crucial need for enhancing human resource capacity to effectively navigate the complexities of insuring oil and gas ventures.

In essence, while the local insurance sector’s involvement in underwriting oil and gas projects signifies a promising step towards sectoral growth, it also underscores the imperative of strategic planning, risk management, and skill development to ensure long-term sustainability and success.