Private insurers are preparing a series of premium adjustments, benefit reviews, and stricter monitoring measures to counter the financial strain caused by the medical tariffs that took effect on July 1, 2025.

The mid-year tariff changes have pushed medical claims upward, forcing insurers to rethink pricing, risk management, and engagement with healthcare providers ahead of the 2026 renewal cycle, The New Times understands.

The industry’s response comes against the backdrop of otherwise positive performance indicators.

Data from the National Bank of Rwanda shows that premiums collected by private insurers grew by 18.5 per cent to Rwf183.4 billion in September 2025 compared to the same period last year.

Investment income also rose by 14.4 per cent to Rwf22.8 billion, driven largely by government securities and bank placements.

Still, the impact of the new tariffs was evident. Net underwriting income, profit derived from core insurance business, declined to Rwf4.1 billion from Rwf5.4 billion in the third quarter of 2024.

The medical claims ratio increased from 70.1 per cent to 75.1 per cent, though the overall claims ratio remained stable at 58 per cent due to strong performance in motor insurance.

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Britam Insurance Rwanda CEO and Rwanda Insurers Association (ASSAR) Chairperson Andrew Kulayige told this publication that the immediate response involved increasing premiums for all new medical insurance accounts onboarded from July onward.

"We saw that the new accounts coming in from July were being priced at the increased tariff. We applied an increment of around 30–35 per cent to address the issue of rising claims,” he said.

However, contracts already in force could not be revised, leaving insurers to absorb the full impact of the higher tariffs for the remainder of the policy year.

As a result, insurers are now planning targeted premium reviews once ongoing contracts expire. Overall, accounts with high loss ratios, typically above 70 or 75 per cent, are likely to face premium increases or benefit adjustments, while well-performing accounts may retain their current pricing.

Some insurers have also intensified member education campaigns to curb misuse and improve claims behaviour.

Kulayige said that the industry is working closely with hospitals, clinics, laboratories, and pharmacies to prevent service abuse and enforce service-level agreements.

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Insurers, he said, overall aim for medical loss ratios – the percentage of health insurance premiums an insurer spends on medical claims – of 50 to 55 per cent. The current ratio, now at 75.1 per cent, is well above appetite and requires continuous monitoring and engagement.

While they were still carrying out the costs for accounts that were already running when tariffs changed, he said that going forward, there will be adjustments depending on the performance of each account. He specified that they are not increasing premiums across the board.

Prime Insurance CEO Eugene Haguma also told The New Times that the biggest challenge was the inability to revise mid-year contracts. Premiums for many clients will therefore need to be aligned with the new tariffs during upcoming renewals.

He said that clients who prefer not to pay higher premiums may instead choose to adjust benefits, for example, by increasing copay, reducing dental or optical limits, or narrowing their provider network – such as the hospitals where they can go to for healthcare.

Haguma underscored that the medical tariff increase was necessary because many service providers had begun incurring losses, threatening the sustainability of hospitals, clinics, laboratories, and pharmacies.

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Maintaining a balanced healthcare ecosystem requires all actors, including insurers, to price sustainably, Haguma said.

He underscored that premium adjustments will differ across clients depending on coverage preferences, benefit choices, and claims performance.

Employers, who make up the largest share of clients, may tailor their plans by selecting higher co-payments or adjusting benefit ceilings to contain costs.

Keeping medical insurance expenditure in check

Haguma said the sector’s target is to keep claims ratios below the insurance sector regulator’s 65 per cent threshold.

A portion of premiums, over 30 per cent, is meant to cover operational costs, including salaries for workers, while still ensuring at least a 5 per cent return to investors, he explained.

He said insurers expect the system to stabilse by 2026 once tariffs and premiums fully align.

"We think by next year, the system will be stable,” he said, implying that the combination of premium adjustments, benefit restructuring, closer monitoring of service providers, and client education is expected to help insurers restore medical claims to sustainable levels while maintaining service quality.