BK General Insurance, a subsidiary of Bank of Kigali officially began operations on Thursday, becoming the 11th insurer to be licensed by the National Bank of Rwanda.
The firm which is registered as a general insurer is fully owned by Bank of Kigali Limited, Rwanda’s largest commercial lender, and will initially not be offering life insurance products.
The entry of a new player in a sector that has suffered weak growth and under capitalization issues over the past years, analysts believe, will be a shot in the arm for the industry whose penetration remains low, at just 2.8 percent.
Industry observers note that BK General Insurance is likely to find an easy entry into the market as it is expected to exploit Bank of Kigali’s already dominant market share for initial business, a development that will also hurt other players on the market.
“BK aims to run a one stop centre of sorts for its customers. You get a mortgage from Bank of Kigali, and proceed to BK General Insurance to insure property, it will therefore be working as some sort of extended department which is an advantage,” said one analyst.
The insurance sector solvency and profits improved in the last quarter of 2016, according to the Central Bank, which was attributed to insurance companies injecting additional capital thereby improving their adequacy ratios.
BNR is projecting further improvement in 2017 as remaining undercapitalized insurers implement their capital injection plans.
“On our part, we look to offer a whole new service experience to customers -an efficient, timely and seamless service. We promise a short, clear and customer-friendly claim process,” said Alex Bahizi BK General Insurance’s Chief Executive Officer.