Rwanda’s insurance  industry registered considerable growth during the first half of 2017 with total assets growing by more than 10 per cent.

In monetary terms, the sector’s total assets stood at Rwf366.5 billion by June 2017, indicating a year-on-year growth of 10 percent.

This growth in assets, according to National Bank of Rwanda (BNR), is largely attributed to the increase in capital injected, especially by the new market entrants and the retainership in profits during the period under review.

For example, the central bank estimates that between June 2016 and June 2017, new capital injected in the insurance sub-sector amounted to Rwf10.3 billion while  profit was more than Rwf17.9 billion.

However, despite this positive growth, experts say the sector could have performed much better, if all stakeholders, especially in insurance brokers, exercised some great deal of professionalism and innovation.

This is because insurance brokers have over the years become the gate way and a bridge between providers and receivers.

According to John Mirenge, the new chief executive, Prime Insurance Ltd, the role of the insurance brokers toward increasing penetration can never be underestimated.

Mirenge says there is need to further professionalise the industry and make it more attractive and competitive at regional and international level.

"The brokers are the ones offering, negotiating, and selling policies, they also therefore act as intermediaries between insurers and customers; therefore   building the capacity of such a group will help enhance efficiency in terms of service delivery,” Mirengi said.

He was speaking during to a cocktail reception with Rwanda insurance brokers in Kigali last week.

In a related view,  the central bank urges more efforts to hold brokers accountable as a way to help increase penetration levels, which have stagnated at about 3 per cent.

There are currently more than 15 insurance brokers and 415 insurance agents who, according to the   sector experts like Gregoire Minani, the Prime Life Insurance chief executive, can help boost the industry if they became more innovative and professional.

Minani says there is need to build capacity of actors but also boost awareness on the importance of insurance.

They must exhibit some level of professionalism while dealing with clients and gathering data to make them understand what is required of them before they are compensated, Minani stressed, adding that this is how the sector will help both insurers and clients mitigate risks thus increasing uptake. Strong partnerships

Naragire argues that investing in partnerships that are wider, including non-insurance actors, and addressing the current challenges at hand will help deepen insurance awareness and penetration thus driving Rwanda towards achieving its financial inclusion objectives.

"We also must put in place appropriate laws and regulation that allow for innovation and minimal compliance costs;  we should also go for a diversified strategy for consumer education that embraces the various strands of building capabilities of consumers to make the right decisions with full knowledge of the benefits and obligations and access,” Naragire observed.

Annie Nibishaka, the head of marketing and distribution at UAP Rwanda, said working with brokers is an excellent way for insurers to offer great policies and products to customers. Engaging private players

Meanwhile, Rwanda private insurers’ assets increased by 9 per cent to Rwf136.4 billion during the first half of 2017 up from 7 per cent that was registered same period the previous year.

The sector has evolved to attract more private players in a bid to boost penetration across the country.

Currently, the insurance industry consists of 16 insurers of which ten are private non-life insurers, four private life insurers, and two public medical insurers. The insurance sub-sector operates a network of 185 branches countrywide, 557 agents, 15 brokers and 13 loss adjusters.

The pension sub-sector, on the other hand, is composed of one mandatory public pension scheme – Rwanda Social Security Board (RSSB), and about 38 unlicensed complementary occupational pension schemes currently managed by the insurance companies or in-house by employers.

BNR is in the process of licensing private pension schemes in accordance with new pension law and it’s implementing regulations.

Overall, the consolidated profits after tax of the insurance sector witnessed robust annual growth of 86 percent, amounting to Rwf18.6 billion in June 2017 compared to Rwf10 billion in June 2016. This growth resulted from good performance of public insurers (MMI and RAMA) whose profit after tax increased from FRW 14.1 billion in June 2016 to Rwf17.9 billion in June 2017, thanks to increased growth of medical premiums.

The performance of private insurers also made a significant improvement as their profits after taxes reached Rwf0.6 billion from a net loss of Rwf4.1 billion registered in June 2016.

The rebound in private insurers’ profits in the first half of 2017 was underpinned mainly by improvement in the claims ratio, as claims grew less compared to net premiums earned as well as a reduction of management expenses.

Experts believe that, through research, product development and regulatory reviews, insurance up take will be enhanced.

"Regulations in this particular case should reflect local needs and conditions, while the strands should essentially address business and financial management, among others, to reduce business risks,” said Evelyn Umubyeyi a Kigali based financial analyst. Early this year, BNR halted licensing of new insurance players in the country with hope the move would give a chance to the sector to stabilise.

According to Peace Uwase, the BNR director-general for financial stability, the suspension of licensing is meant to give insurers time to improve their operations and build public confidence in the sector.

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