On September 22nd, a fire believed to have been caused by an electric shot circuit gutted shops in Kigali’s busiest business centre.
Within three hours, the fire that sparked off at ADMA International building had spread to five other shops, destroying merchandise worth millions of Francs.

After an audit, Jacqueline Mukagatete and a Kenyan owner of ADMA International Limited, Peter Mwangi had lost everything. Nobody knows whether they will ever return to normal business.

"I cannot comment on anything. All I know is that all my merchandise is no more,” Mwangi said when asked how he feels after the midday fire.

Mukagatete’s merchandise was worth Frw40 million while Mwangi’s was estimated to be Frw200 million.

Though Kigali City Mayor, Aissa Kirabo Kacyira said insurance companies would compensate the traders, Business Times investigations found out that many trader had not insured their businesses.

The businesses are among the many, not insured in the country.
"We have already received declarations from two people who lost their goods in the fire. These will be compensated. However they also did not take a personal choice to insure their goods. Rather they did so because it is a requirement from the banks that offer financial assistance,” Corneille Karekezi, the Chief Executive Officer of Sonarwa said in an interview with Business Times.

It is estimated that 99 per cent of Rwandans do not take insurance cover. According to the current statistics from Sonorwa, the number of people insured against different risks countrywide is below 1 per cent.  

Players in the insurance sector attribute the low insurance penetration to ignorance of the population about the benefits that come with insurance premium payments.

While Kenya has the highest insurance policy penetration rate in Sub Saharan Africa—at 4 per cent, Rwanda is still at 1 per cent or less.

It is believed that many traders do not insure their merchandise or even buildings against risks, partly because they think they will never fall victims.

Inspite of having very low premium insurance rates, Karekezi says even most government buildings are also not insured.

Cartel?
Many people describe insurance companies in the country as a cartel that set exorbitant prices for the services they offer. This, according to some potential clients discourages thousands of from taking insurance policies.

But Karekezi disagrees.
"If someone has property valued at Frw5m, that person is expected to pay only Frw300 per month as insurance.

It is therefore possible to pay this amount of money each month and have your property compensated immediately in case of any risk, than it is to replace property worth Frw5m after it has been lost,” he said.

He also advised that government should insure all their properties such that the public can realise the benefits and the real importance of the insurance policy.

Jean Bosco Uwimphuwe, a contractual savings specialist in Ministry of Finance and Economic Planning adds that it is important to cover businesses against any kind of risks so that traders can be able to implement long term business plans, rest assured that they are covered.

"Uncertainties can be assessed and covered such that long term projects can be implemented at very low risks,” he said.

Awareness
Uwimphuwe said government has a strategy under the Financial Sector Development Programme that will increase awareness and penetration of the insurance policy. 

He is optimistic that as soon as the strategy takes root, it will increase professionalism in the insurance sector such that players can meet needs at reasonable costs.

As a result of the low insurance culture among Rwandans, two years back Anastase Munyandamutsa, the Director General of COGEAR insurance company called upon government to enact a law obliging all people in the country to take up fire insurance policy.

With fire cases, Karekezi said three parties should be involved in insurance. The owner of the building, who should insure his structure and the neighbours, such that incase of fire compensation, the insurance company also covers the neighbours who could have been affected by the fire as well.

He adds that the second party should be the tenant. In this case, the tenants should be able to pay insurance that should cover their merchandise and liability.

The third party is the insurable interest which should cover the goods or property especially if a bank is involved.

Capital
SONARWA, SORAS, COGEAR and CORAR are the leading insurance insurance companies in the country.

Apparently they have  a total share capital of Frw2.9 billion, net assets of Frw4.6 billion and have incurred claims worth Frw4.3 billion.

All these provide different types of services ranging from fire, life, retirement fund, automobile and property coverage among others.

Ends