Insurers in Africa must design and produce for the market innovative and affordable premium products to ensure a large section of the population is catered for.

This, Prime Minister Anastase Murekezi says, will help increase insurance uptake, hence have a positive impact on the economies through mitigating any risks.

The premier was speaking during the 40th anniversary symposium of Africa Reinsurance Cooperation (Africa Re) and general assembly meeting that convened in Kigali, yesterday.

Premier Murekezi called on insurance firms to develop strategies that will help address the sector’s most pressing challenges to attain sustainable economic development.

Increasing insurance uptake, according to Murekezi, is the best alternative of managing risks and ensuring financial stability for emerging economies, like Rwanda.

"The sector plays a critical role in mobilising the needed resources for long term investments,” he said, adding that Africans deserve a suitable financial recovery scheme to sustain economic development.

The meeting brought together more than 300 insurers, sector regulators, policy-makers and experts.

Africa Re is a premier regional reinsurance institution dedicated to Africans with a mission to foster development of the insurance and re-insurance industry on the continent, promote the growth of national, regional, and sub-regional underwriting and retention capacities.

In Rwanda, Africa Re has provided insurance companies with additional underwriting capacities both for treaty business as well as facultative business, according to Finance and Economic Planning minister Claver Gatete.

Gatete stressed the need for insurance firms to go beyond borders and facilitate regional and global trade.

"Despite the challenges, players should bring to the market more products to cater for the growing demand of insurance in the country and the continent at large,” he said.

In Rwanda, insurance uptake is still low, at less than 2 per cent, according to central bank statistics.

Currently, the country has eight non-life insurers, four life insurers, two public medical insurers, 15 insurance brokers, 365 insurance agents, 12 loss adjusters, one public pension scheme (Rwanda Social Security Board) and 57 private pension schemes.

Central bank statistics indicate that the local insurance sector continues to register considerable growth in terms of total assets and capitalisation.

The industry’s total assets increased by 12 per cent to Rwf306 billion in 2015, from Rwf272 billion in 2014.

To boost performance, Hassan Boubrik, the board chair of Africa Re, said the corporation will continue to provide insurers with expertise and resource to ensure they increase penetration on the continent.

Penetrating informal sector

Jean Pierre Majoro, the executive secretary of the Association of Insurance Companies in Rwanda, argued that the sector can only improve if players invest in skills and innovation.

He told The New Times that increasing uptake will require players to venture into micro insurance by targeting small and medium entrepreneurs.

"Penetration in the informal sector of the economy is still low because sector players have not been innovative enough to design products that suit this sector,” Mujoro said.

He urged industry players to develop products that target small-and-medium entrepreneurs (SMEs) to enhance uptake rates and profits, and hence make the sector more competitive. He said some areas and economic activities are not covered, noting that this has affected penetration levels.

He said although many insurers consider the informal sector to be risky, it presents them huge growth opportunities, which could improve insurance uptake in the long-run.

Majoro also said there is need to establish an insurers’ training institution to help boost skills and capacity of industry players.

His views were echoed by Alexis Ruzigura, the commercial director of SONARWA, who said increasing insurance penetration will equally require boosting awareness among the public.editorial@newtimes.co.rw