Insurance companies have been urged to adopt data-driven pricing models that take individual risk profiles into account, rather than charging motorists similar premiums regardless of their driving history or level of risk.

Hebert Asiimwe, the Head of Financial Sector Development at the Ministry of Finance and Economic Planning, said better use of customer data would enable insurers to develop more personalised products and set premiums that reflect the risks associated with individual policyholders.

"When we go to buy insurance, motor insurance, whatever type of it, so long as it's a motor insurance, you realise that most of us are priced at the same price, which is not right,” Asiimwe said.

He drew parallels with credit scoring in the banking sector, where lenders assess borrowers' credit histories and risk profiles when determining interest rates.

Asiimwe argued that insurers could adopt a similar approach, using relevant customer data to distinguish between risk categories and develop products that better reflect policyholders' circumstances.

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Push to expand insurance coverage

The proposal comes as Rwanda seeks to expand insurance coverage and address persistent challenges, including low public awareness, limited trust in insurers and the concentration of insurance services in urban areas.

Insurance penetration stood at 2 per cent of gross domestic product (GDP) in 2024, while the proportion of adults with insurance had risen from 17 per cent in 2020 to 27 per cent.

Under the National Insurance Strategy, the government aims to increase insurance penetration to 5 per cent of GDP by 2035.

The strategy also seeks to raise insurance density, or average insurance spending per person, from Rwf25,000 to Rwf45,000 and increase the proportion of insured adults to 45 per cent.

To improve customer experience and strengthen public confidence, the strategy targets a reduction in average claim settlement times to less than 30 days, supported by digitalisation and clearer insurance policy terms.

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Asiimwe said the gains recorded so far were encouraging but insufficient, particularly as insurance coverage remained concentrated in urban areas, leaving rural communities and several economic sectors underserved.

He said Rwanda could build on existing digital platforms and growing smartphone use to expand access to insurance while collecting information that would help insurers better understand customers&039; needs.

The government also intends to explore community-based distribution channels to make insurance products more accessible.

Local savings groups, for example, could help distribute bundled insurance products to people who are difficult to reach through conventional insurance networks.

Asiimwe said insurers also needed to identify underserved sectors and develop products tailored to their circumstances.

Affordability and trust remain barriers

Beyond pricing and distribution, Asiimwe identified limited public awareness and lack of trust as major obstacles to increasing insurance uptake.

He stressed that insurers must do more than sell policies, noting that customers need clear explanations of the benefits, terms and conditions of their coverage.

He also warned that failure to settle legitimate claims could undermine confidence in the industry.

Asiimwe said Rwanda's efforts to expand inclusive insurance build on previous initiatives, including the introduction of microinsurance regulations in 2018 and the National Agriculture Insurance Project.

He said the agricultural insurance scheme was expanding, while the government was seeking to promote additional insurance products targeting households, farmers and businesses.

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Andrew Kulayige, the Chairperson of the Rwanda Insurers Association (ASSAR), acknowledged that insurers had historically paid insufficient attention to microinsurance and the needs of underserved groups.

He identified farmers, rural communities and motorcycle taxi operators among those whose insurance needs required greater attention.

Kulayige said the industry was increasingly shifting towards customer-centred product development, with insurers expected to understand the circumstances of different groups before designing appropriate coverage.

He also emphasised the importance of accessible distribution channels, particularly for households struggling to meet essential expenses.

Integrating insurance into services that people already use, he said, could make coverage more accessible and encourage uptake among low-income households.

Lessons from community health insurance

Michelle Umurungi, the Deputy Chief Executive Officer of the Rwanda Social Security Board (RSSB), said affordability, trust, convenient payment systems and tangible benefits were critical to expanding inclusive insurance.

Drawing on Rwanda's Community-Based Health Insurance (CBHI) scheme, Umurungi pointed to income-based contributions and government support for vulnerable households as examples of how insurance arrangements can accommodate different financial circumstances.

She said such an approach helps align contributions with households' ability to pay rather than imposing uniform payment requirements.

Umurungi also highlighted the role of digital payment systems and existing public structures in facilitating contributions, expanding coverage and improving access to insurance services.

She stressed that customers must understand the benefits of their policies and see their value when they need to make a claim.

The discussion highlighted the importance of combining innovation in insurance pricing with affordability, transparency and consumer protection.

While risk-based premiums could allow insurers to distinguish between motorists with different risk profiles, their effectiveness would also depend on how clearly pricing decisions are explained and whether customers consider them fair.