Insurance industry needs to put its house in order

It has been established that the national insurance coverage is rather low. Statistics indicate that coverage in Rwanda stands at only 4 percent. Further more, within business, the rate is even lower, at only 1.5 percent. The reasons attributed to the low level of penetration by stakeholders, point mostly to low awareness and lack of sensitization campaign by the licensed players. However, the reason for this low coverage goes beyond sensitization. While the Government has played its part by coming up with a new regulatory framework that has been endorsed by stakeholders, the onus is on the licensed players to improve mainly on their service delivery channels. Government has consistently stressed that the industry needs to improve on its operations through the new regulations gazetted early last year. A comprehensive audit was carried, revealing various challenges facing this sector. The findings showed that insurance industry players have been merging both short term and long term businesses, contrary to best practises while certain players were found to be lacking adequate capital. The report also indicated that some players apply improper valuation of their assets and liabilities while corporate governance appears to be a serious challenge. Key recommendations have been outlined for the purposes of overhauling the sector. To help boost the activities of the industry, the report made far reaching recommendations. The idea is that the players need to boost the competitiveness of the sector. Key among these included separation of short term from long terms businesses, and players were reminded to increase their share capital outlays to assist with restructuring. Actuarial valuation of the industry’s assets and liabilities is key to the unlocking of the industry’s full potential. Players must embrace corporate governance while capacity building in form of training and motivation for staff will go a long way in assisting with the awareness campaigns by the players. Ends

Opinions

Insurance industry needs to put its house in order