LocationsReimagining Insurance for Uganda’s Farmers and Small Businesses
August 10, 2026
Uganda’s farmers, small businesses and communities are increasingly facing climate shocks, rising costs and financial pressures that can disrupt livelihoods and slow recovery. At the same time, digital technologies and new sources of data are changing the options on how farmers and entrepreneurs can protect themselves against such uncertainties. Insurance is rapidly evolving and now, it can reach people, price risk, and respond more quickly when losses occur.
The United Nations Development Programme (UNDP) in Uganda is working with the Government, insurance players, farmers and farmer associations to expand the opportunity to move insurance beyond protection and position it as part of Uganda’s resilience infrastructure. As part of unpacking this further, Uganda stakeholders including UNDP participated at the Insurance Regulatory Authority’s 3rd Annual Insurance Regulatory Sandbox FinTech Workshop on 9 July 2026. The engagement brought together regulators, insurers, innovators and partners to explore financial technology and regulatory innovations that can strengthen Uganda’s insurance market.
Through these engagements, an important insight has emerged. The mindset around insurance needs to shift from viewing insurance merely as a tool for compensation after losses to recognizing it as a strategic enabler of growth, resilience and innovation. Increasingly, rather than only responding to shocks, modern insurance is empowering farmers and businesses to invest confidently in productivity-enhancing technologies, helping small businesses innovate and recover faster from disruptions, unlocking access to finance by reducing risk for lenders, and supporting governments in safeguarding development gains. In this way, insurance becomes not just a safety net, but a catalyst for economic transformation and sustainable development.
Stakeholders participating in the 3rd Annual Insurance Regulatory Sandbox FinTech Workshop
Uganda’s opportunity
Uganda is making important advances in digital innovation, financial inclusion and climate resilience efforts. Focussing on these three areas as a package is especially significant in a country where agriculture and small businesses remain central to livelihoods and economic activity, which accounts for close to 26% of the Gross Domestic Product (GDP) and which employs 65% of the workforce. This in addition to the vulnerabilities occasioned by persistent climate shocks that continue to affect farmers, households and small businesses. According to the World Bank Group Climate Risk Country Profile (2021), Uganda is highly exposed to climate hazards and heavily dependent on climate sensitive sectors, especially agriculture. A Country Climate Risk Assessment Report by Irish Aid (2018) further notes that climate change hazards will reduce crop yields and livestock production, worsening food security and vulnerability. Uganda’s Economic Assessment of the impact of Climate Change (2015) projects that climate induced yield losses for coffee for instance, could reach 50-75% in absence of adaptation measures
Uganda has nonetheless been making systematic progress in strengthening agriculture risk insurance. Thus far, Uganda has been moving from fragmented pilots towards a more structured public-private agricultural insurance system. This being done through combining differentiated premium subsidies based on the coming together of a consortium of insurers and development partnerships to expand protection for farmers facing climate and production risks. The Uganda Agriculture Insurance Scheme has now covered over 1 million farmers with agriculture insurance products and services, with over UGX 53.8 billion paid in claims, helping farmers recover from shocks, delivered through a consortium of 14 licensed insurers. UNDP Uganda, under the Financial Resilience in Agriculture initiative, supported the Ministry of Finance, Planning and Economic Development to secure a ten-year extension of the Uganda National Agricultural Insurance Scheme and strengthen the market ecosystem through the agriculture consortium.
Using data to manage risk differently
One of the most important global shifts is from compensation to prevention. The old model of insurance was largely reactive: pay after disaster. The emerging model focuses on predicting, preparing for and protecting against risk, including using climate data intelligence tools like the ImpactSF Analyzer to inform risk reduction, retention and transfer.
Artificial intelligence (AI), satellite imagery, remote sensing, mobile data and digital risk mapping are changing how insurers understand risk, bring together analysis, modelling and predictions that enables claims to be paid in a very short time. These tools have the potential to better support underwriting, faster claims, more transparent pricing and a shift from perceived risk to better quantified and managed risk.
Enhancing inclusion as a growth opportunity
The shift from compensation to prevention of risks noted earlier as part of the improving model of work is particularly important for inclusive insurance. Globally, fewer than one in five of the world's roughly 608 million smallholder farmers are uninsured, leaving a major protection gap for the farmers and a major market opportunity for insurance. The situation is no different for Uganda.
A major challenge has been that - poor and vulnerable customers are often seen as too risky, but in many cases, they are simply underserved. With the right knowledge, sensitization, customized insurance products, partnerships, distribution channels and trust-building mechanisms, inclusive insurance can provide wide community safeguards and expose new market opportunities. Inclusive insurance can be a key element in advancing national development priorities.
Embedded finance is one way to achieve this. Insurance can be integrated into mobile money, digital lending, input finance, agricultural value chains and other services that people already use. This was a useful discussion element at the Insurance Regulatory Sandbox FinTech Workshop highlighted earlier.
Partnerships for scale
There is an opportunity from widening collaboration for innovative insurance, especially in the agricultural sector and specifically for the underserved micro insurance market. Regulators create safe spaces for innovation. Government provides policy direction. Insurers and reinsurers bring risk expertise and capacity. FinTechs, telecoms, banks and aggregators help expand reach. Development partners can provide catalytic support, practical pilots for good innovations, and experiential learning through mechanisms such as south-south-cooperation and north-south triangular cooperation.
This is why regulatory sandboxes remain necessary innovation spaces. They allow markets to test new ideas safely, learn faster and reduce uncertainty. For Uganda, the sandbox can become a launchpad for parametric insurance, embedded insurance, climate risk solutions, AI-enabled underwriting and digital claims innovation.
Aligning innovation with development goals
UNDP’s Insurance and Risk Finance Facility, through the Financial Resilience in Agriculture initiative, works with governments and partners to support this kind of systems approach. Global evidence shows that when farmers are protected against climate and production risks, they are more likely to invest in inputs, maintain production, access and compete in markets and recover better after shocks. When smallholder farmers and businesses better manage risk, they can keep operating, improve yields, protect jobs and access finance.
This is why insurance can accelerate progress towards national development goals. It supports poverty reduction by stabilising incomes, food security by protecting production, financial inclusion by reaching underserved groups, economic growth by enabling investment and climate adaptation by helping households, businesses and governments to better anticipate and prepare for shocks.
Scale comes when policy, regulation, programmes and financing are aligned around national development goals.
Bran Atiku speaking at the Insurance Regulatory Authority’s 3rd Annual Insurance Regulatory Sandbox FinTech Workshop on 9 July 2026
A call to action for Uganda’s insurance industry
For Uganda, what lies ahead is a future where: farmers can access affordable climate risk insurance through mobile platforms; small businesses can secure coverage that helps them recover after fire, floods or income disruptions; claims are paid in days rather than months, and insurance strengthens food security, livelihoods and national resilience.
To get there, the Uganda insurance industry can focus on five priorities.
Adopt an innovation mindset by testing new solutions responsibly and learning quickly from what works.
Build inclusive markets by designing products that respond to the needs of women, youth, farmers, micro, small and medium enterprises, and informal workers.
Invest in data and digital infrastructure so that underwriting, pricing, distribution and claims can become faster, fairer and more efficient.
Move from standalone products to ecosystems that connect insurance with credit, savings, inputs, technology and advisory services.
Embrace the industry’s wider role as an architect of resilience, helping Uganda protect livelihoods, strengthen food security and adapt to climate change.
By Bran Atiku, National Project Officer, Insurance and Risk Finance Facility, UNDP Uganda
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