There is need for close partnership between insurers and other financial institutions in the country to increase insurance premiums and boost penetration rate, an expert said.

Patrice Backer, Managing Director of Advanced Finance & Investment Group (AFIG), a private equity fund management company based in Mauritius, argued that with collaboration insurance products would be distributed or sold through banks."Insurers are trapped inward focusing on themselves and never saw themselves as part of the bigger family of financial sector,” said Backer.

"We want them to believe they are financiers and not just insurers.”

Through such partnerships, he added, banks would be able to use the collected premiums to finance their projects or insurers would invest in private equity.

The idea was mooted during the ‘finance day’ at a recent insurance meeting in Kigali.

Backer mentioned that in developed countries insurance is considered as major component of financial systems, and they attract a lot of liquidity while looking out for the ways to manage the liquidity.

The finance day showcases various insurance products, including insurance rating, collaboration between insurance and banks, investment in private equity and real estates."There is a synergy between finance and insurance and we think they need to be full participants in finance,” Backer stated.AFIG invests in growth and expansion fund, especially for companies with a good track record looking for equity financing to add in new products. AFIG has already invested $4 million in ECObank Rwanda.

According to Backer, some projects have become bigger than the local market, or too small to attract funding from commercial banks which calls for equity financing.

"There is a great need for equity capital and there is very little offer in terms of equity capital, where many companies are stuck in this cycle,” Backer said.

He, however, pointed out existing laws in the insurance sector that make it difficult to invest in private equity as the greatest challenge to insurers.

"We had expressions of interest from insurers but it’s subjected to the approval of their regulators, because regulators are very stringent about investing in private equity. We’ll continue to educate insurers and then they can also educate their regulators on the benefits,” he added.

Marc Rugenera, the Chairman of Rwanda’s Association of Insurers noted the global financial crisis calls for indigenous strategies to finance investments.

"It’s our duty, we insurers, to contribute in filling this investment gap for the development of our economies,” Rugenera said.In an interview, Saliou Bakayoko, Managing Director of LMAI-VIE, an insurance company in Ivory Cost asserted: "The collaboration is growing in Ivory Cost but my vision is to sell insurance products through mobile phone because of the density of the coverage.”

Bakayoko observed that the insurance sector is a very complex industry with a cycle of exploitation and mismatch between assets and liabilities.

"If banks in Africa have improved, why not insurance, this can be envisaged if we reposition our selves in the market,” he emphasised.

Lack of trained personnel, Small and Medium Enterprises that are not solid yet and stringent regulations, were cited among the challenges hindering insurers from acting as financiers despite their massive collections. The four-day meeting, organised by Federation of African National Insurance Companies (FANAF) and Rwanda’s Association of Insurers drew 500 participants from across the continent.