The state of fire insurance performance for the period 2019 – 2021 from the Rwanda Insurers Association (ASSAR) indicates that assets insured against fire stood at over Rwf5.2 trillion by the end of 2021. Data from last year, 2022, are yet to be released. READ ALSO: Most people take out fire insurance 'because it’s a loan requirement' Fire insurance cover stood at Rwf6trillion in 2020 while in 2019 it stood at Rwf6.3trillion. This reflects an overall 17.4 per cent decline. Also, for the period 2019 to 2021 figures show that there was persistent drop in the number of people acquiring fire insurance from 28,625 customers in 2019 to 28,495 in 2020, and 25,927 customers in 2021, implying about 10 per cent reduction. The insurers’ association indicated this situation was majorly as a result of Covid-19, adding that, in some cases, cash flows dropped and optional insurance covers were suspended, while potential new policies and renewals decreased. Only insurance covers required by banks to protect mortgages, and few customers on their own risk appreciation, sustained their fire insurance policies during the pandemic years, it pointed out. However, it observed, the sector experienced a year on year increase in fire insurance premiums received in the 2019 – 2021 period. In 2019, total premiums stood at over Rwf6.6 billion, and increased to over Rwf8.5 billion in 2020, and over Rwf11.4 billion in 2021. This increment in premium was a result of changes (increase) in rates. ASSAR report indicates that given the population size (estimated at 13 million) and the growth trend of the Rwandan economy, the rate of fire insurance uptake was still very low. Why fire insurance matters Some businesses incur losses in case of fire incidents when they do not have insurance coverage for their properties. Yet, with insurance cover, they would get compensation for damages caused. On February 12, fire gutted Gisozi workshops (commonly known as Gakiriro), Kigali, inflicting an estimated over Rwf4 billion property loss to businesses, according to Gervais Gumiriza, the chairman of ADARWA – a cooperative engaged in making furniture. ADARWA is also the owner of the affected building, whose worth is estimated at Rwf3 billion. Fortunately, Gumiriza told The New Times that the building was insured. However, he added that he did not know whether the properties that were inside it had insurance cover, indicating that they included quality timbers worth Rwf200,000 each. “Insurance mitigates losses caused by fire by paying compensations to the policyholder,” he said. Jean Marie Rutayisire lost property worth about Rwf8 million, when fire destroyed a commercial building in Musanze city centre, Northern Province on January 17, resulting in the destruction of property estimated at over 130 million, which dashed fortune hopes for affected businesspeople. Out of the 19 rooms that make up the building in question, 12 were damaged by fire. “I had no fire insurance cover for the destroyed assets worth about Rwf8 million,” he told The New Times, adding that they include cameras, computers, wedding attires including suits, and ‘imishanana’ traditional ceremonial dresses of women. Rutayisire said that some people buy insurance for their properties and after one to five years, they discontinue it when there are no fire-induced losses, thinking that the premiums they pay are not worth it. “The Government should make fire insurance compulsory for businesspeople as it is the case for motor insurance,” he said, referring to what should be done to increase insured assets. Meanwhile, insurers under ASSAR exposed that most individuals take fire insurance for their houses just because it is a requirement by the bank for them to get a loan. On possible solutions to increase fire insurance uptake in Rwanda, ASSAR Executive committee members proposed among other recommendations, that insurance should be viewed and positioned as a national priority. Also, ASSAR recommended that the Government may consider incentives in terms of a percentage deduction on property tax to enable people gain what they may use to purchase fire insurance.
