Bank of Kigali has injected Rwf4 billion in its insurance subsidiary BK General Insurance, ending the re-capitalisation campaign by privately-owned insurance firms in the country.
In total, the industry saw an injection of Rwf10.3 billion ($4.7m) in new capital between June 2016 and June 2017. The capital injection has built the private insurers’ assets by nine per cent reaching Rwf136.4 billion as of June.
“The performance of private insurers made a significant improvement as their profits after taxes reached Rwf600 million ($712,410) from a net loss of Rwf4.1 billion ($4.8m) registered in June 2016,” said John Rwangombwa Governor of National Bank of Rwanda.
He was presenting the monetary policy and financial stability statement at Kigali Convention Centre.
Rwanda Today found out that six insurance companies were struggling to stay in business as their capital levels had suffered significant erosion.
“The number of private companies meeting the prudential solvency requirement of 100 per cent increased from five in June 2016 to 11 in June 2017,”
according to BNR’s monetary policy and financial stability statement.
Bank of Kigali CEO Diane Karusisi said the recapitalisation of BK General Insurance was informed by the positive prospects of the insurance business, which is growing at a fast rate.
BK insurance which started operations in September 2016, recorded Rwf2 billion ($2.4m) in gross premium income riding on its brand name and products. As of end of June the insurance company made Rwf76 million ($90,238) net profits.
Bank of Kigali said they are still looking for strategic investors. Mauritius-based Aprica Investment Ltd is said to be interested in a 30 per cent stake in BK General Insurance.
“Negotiations are still ongoing,” said Kenneth Agutamba communications manager at the Bank of Kigali.
There are 16 insurers in the country; 10 are private non-life insurers, four are private life insurers; two are public medical insurers.