Projected insurance penetration is unrealistic


RE: “Local insurer unveils micro insurance products for SMEs” (The New Times, April 13).

He noted that with such interventions, penetration could hit 12 per cent by 2020, translating to Rwf23 billion for the firm.”

The 8% increase in just three years is totally impossible. Insurance uptake depends on the level of a country's education and economic development. In Rwanda, more than 90% of the population are peasant farmers who do not have enough disposable income and who may not even see the need for insurance. This group is unlikely to spend the little extra income they have on insuring their property.

The only insurance that can attract them is health insurance only. Even in our cities, where we should expect many people to understand the value of insurance, we continue to see uninsured losses among business owners.

Secondly, the percentage of bank loan applicants to the total population of upcountry is insignificant. Even if all these people were to buy credit insurance, it would not cause an 8% increase in insurance penetration.