SORAS has predicted that its profit after tax will drop by as much as 20 percent or Rwf169.1m at the end of the year due to the global financial crisis and the credit squeeze on the local market.
Last year, Rwanda’s oldest private insurance company posted Rwf845.7m in net earnings, up from Rwf308.6m in 2007, representing an increase of 40 percent.
“The Global Financial Crisis affected us in one way or the other. There were very many investors who wanted to invest in Rwanda but did not because the financial crisis hit them.
It was a big opportunity for us to insure their materials, workers and the transportation of their construction materials but it didn’t happen,” Marc Rugenera, Managing Director of Soras explained.
But the company has managed to pull off diverse effects on its portfolio due to other investments it had made, supporting its external growth.
The Managing Director said that Soras invests in real estate and Microfinance businesses through Agaseke which they own 100 percent.
“Through this we managed to generate more income to cover up the other costs.”
The company’s financial statements show that on the operating basis its net income rose by 174 percent to Rwf845.8 against the cash flow of 1.3b. Depreciation costs increased to Rwf423m from Rwf275m.
The company’s automobile insurance business generated Rwf1.1 billion last year followed by risk insurance which contributed Rwf1 billion.
With some 177,000 clients, statistics show that the company paid about Rwf3.5 billion last year for car accidents alone.
Rugenera also said that to manage and control losses, the company is reinsured with other big regional and global players like MUNICH RE of Germany, AFRICA RE and ZEP RE which is owned by Comesa member states.