MINICOM, BNR meet over increased insurance rates

NYARUGENGE - The Ministry of Commerce, Trade and Industry (MINICOM) together with the National Bank of Rwanda, Thursday convened an emergency meeting at Hotel Des Mille Collines to resolve the issue between insurance companies and their customers over the former’s recent hiking of insurance rates apparently without consulting the concerned regulators and stakeholders.
The Governor of BNR, Francis Kanimba (L) listens while MINICOM Minister Monique Nsanzabaganwa (R) responds on the rising Insurance rates. (Photo G.Barya).
The Governor of BNR, Francis Kanimba (L) listens while MINICOM Minister Monique Nsanzabaganwa (R) responds on the rising Insurance rates. (Photo G.Barya).

NYARUGENGE - The Ministry of Commerce, Trade and Industry (MINICOM) together with the National Bank of Rwanda, Thursday convened an emergency meeting at Hotel Des Mille Collines to resolve the issue between insurance companies and their customers over the former’s recent hiking of insurance rates apparently without consulting the concerned regulators and stakeholders.

The meeting included various stakeholders and beneficiaries of insurance such as insurers under the Association of insurance companies in Rwanda (ASSAR), and consumers who were represented by ATRACO (a public transport company) and CODACE (an association comprised mainly of former Government  drivers) among others.

“We used to pay Frw 170.798 per year, now it has doubled to Frw 324,000, an increase which is alarmingly high. This comes at a time when fuel prices have also shot up yet we didn’t increase fares. This causes us untold losses,” said Twahirwa Dodo, the president of ATRACO. 

The insurance companies were accused of going ahead and increasing the rates without consulting stakeholders like the MINICOM, the regulatory body BNR and the consumers of the insurance.

In his speech, the Governor of the National Bank of Rwanda, Francis Kanimba blamed ASSAR for instituting new rates before consulting the necessary authorities and the beneficiaries.

He however added that this is a consequence of the absence of a regulatory policy and clear-cut procedures and guidelines to be followed by insurance companies.

He explained that instituting of policy measures and legal frameworks like contract law, will solve many of these problems.

In response, the president of ASSAR, who is also the CEO of SONARWA, Corneille Karekezi, blamed the increase of insurance rates to the sharp increase in the insurance premium rates which occurred early this year in the local market.

“It is true Rwandan insurers are experiencing losses due to inadequate premium rates, which are extremely lower compared to what they should be,” said Karekezi before acknowledging that some laws such as not consulting the regulators had been breached.

Another reason given for the shooting up of insurance rates was the increase in the costs of the motor insurance class, like management costs, repair costs, and a sharp rise of claims, most of which were beyond-repair cases.

“It was normal that insurers review their rates upwards,” explained Karekezi.

After the discussion that was chaired by the Minister of Commerce, Trade and Industry, Monique Nsanzabaganwa, a resolution that the current rates remain as they are was reached.

The regulators will monitor them and take the necessary steps to ensure their adequacy in future. However, the president of ATRACO, Twahirwa Dodo, talking to The New Times expressed dissatisfaction about the resolution.

“We are not happy with the resolution. The rates are blatantly high yet we didn’t increase the fares. The fact that the meeting has resolved that we continue paying the same rates means it has not come to our rescue,” said Dodo.

The insurance consumers pledged to continue pushing until the terms are more favorable for them.

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