Rwanda’s insurance sector set for to better performance this year

Saturday March 5 2016

UAP Insurance Rwanda Ltd, a regional firm, is one of the key players in the insurance sector. PHOTO | CYRIL NDEGEYA

UAP Insurance Rwanda Ltd, a regional firm, is one of the key players in the insurance sector. PHOTO | CYRIL NDEGEYA 


Rwanda’s private insurance sector is expected to recover this year, after registering losses due to negative practices such as undercutting the prices.

Growth is expected to be driven by recapitalisation of the industry which remains dominated by Kenya-based companies.

According to National Bank of Rwanda, at the end of December 2015, the total assets of the industry increased by 12 per cent to Rwf306 billion from Rwf272 billion end of December 2014.

The sector’s total capital increased by 12 per cent to Rwf222 billion end of December 2015 from Rwf198 billion end of December 2014.

The solvency margin, one of key indicators for measuring insurance financial soundness, was 6 per cent, above the minimum requirements of 100 per cent.

The sector also registered sufficient liquidity as evidenced by its liquidity ratio of 355 per cent which is well above the minimum prudential benchmark of 150 per cent.


According to John Rwangombwa, the Governor, National Bank of Rwanda, the sector is recovering from the negative practices like price wars especially in private insurance which has been a challenge.

Mr Rwangombwa argued that most of the insurance companies in the country are profitable except a few whose poor performance has pulled the entire industry into negative underwriting profits.

“We are also engaging those [loss making firms]. We have given ourselves up to June. Every insurance firm must be in order,” Mr Rwangombwa said in a radio interview on Wednesday.

Kenyan subsidiaries are the second biggest players in the insurance sector. They include Phoenix Assurance Company, a subsidiary of Phoenix Assurance Group, UAP Insurance Rwanda Ltd owned by UAP Holdings Ltd, a financial services group listed in Kenya dominate the insurance sector in Rwanda and Britam Insurance Company Rwanda Ltd a subsidiary of British-American Investments Company Ltd.

The local insurance firms that sold controlling stakes to foreign investors include Sonarwa General Insurance Ltd, Compagnie Generale d’Assurance et de Reassurance au Rwanda (Cogear) and Saham.

Currently, there are eight non-life insurers, four life insurers, two public medical insurers, 15 insurance brokers. This is in addition to 367 insurance agents, 12 loss adjusters, one public pension scheme managed by Rwanda Social Security and 57 private pension schemes.

Industry players and government technocrats had hoped the regional players would use their expertise to help turn around the industry; however the regional investors have remained cautious.

As of December 2015, National Bank of Rwanda data showed that the insurance penetration in Rwanda had stagnated at 1.5 per cent compared with the Kenya mature market which is 3.16 per cent.

The insurance density, measured at GDP per capita is only at $10.5, relative to $67.0 in Africa, and $30 in Kenya, according to the World Bank.