A new report indicates that insurers are using outdated approaches that cannot woo customers, especially from the mass market provided by small-and-medium enterprises (SMEs) and ordinary Rwandans.

The report by audit firm KPMG released last week, for instance, indicates that players do not consider customers needs while developing products, which creates a mismatch between needs and products on the market.

Most insurers also never conduct customer surveys and nor do they deploy new technologies to drive awareness about benefits of insurance to soar up numbers. The result has been stagnation of Rwanda’s insurance penetration levels at just 2 per cent, compared to over 3 per cent in Kenya and below the Africa average at 2.8 per cent.

The highest percentage of the 2 per cent is contributed by the compulsory third party insurance for vehicles and motorcycles. With the agriculture and the informal SME market segments largely untapped, this is not surprising.

This should jolt the Rwanda Insurers Association and members from their comfort zone presented by growth in assets and capital and "mean business”. Instead of focusing on a few firms and provision of services like travel cover, insurers should be thinking in terms of providing micro-insurance scheme for SMEs and low income people.

With the huge co-operative movement in the country, there surely should be group policies for properties and activities, like farming, undertaken by farmer co-operatives.

It is such initiatives that will drive-up penetration levels in the country and boost sector earnings. Hopefully, the forthcoming five-year plan for the insurance industry will take care of such schemes.

Of course there could be need for enabling policies in some cases, which sector players and stakeholders, including the central bank and government, need to handle.