Soras Insurance will henceforth trade under the brand name Sanlam following the completion of the acquisition process.
Sanlam Group, a South African Company, has announced the completion of the process following the acquisition of Soras last year.
The acquisition process began in 2014 when Sanlam acquired 63 per cent stake in Soras before taking full ownership in 2018.
Salam merged Soras Assurances and Saham Assurances after acquiring 100 per cent interest in Saham Finances, a Moroccan based firm.
Following the completion of the process, the firm is seeking to leverage on the experience of Sanlam over the years in multiple markets across the continent.
This comes a time when insurance penetration is significantly low, estimated at about less than 3 per cent.
Insurers also reported losses from underwriting, their core business.
Junior Ngulube, the Vice-Chairman Sanlam Pan –Africa is optimistic that the industry fortunes can be turned around.
Among the adjustments he said they hope to make in the operations of their latest acquisition is bringing onboard expertise that will among other things drive innovation in regards to products.
The stagnation in the local market has often been attributed to the lack of professionalism and innovation as well as price competitions.
Going forward, he said, priority will be on tailoring products and services that will be relevant in the market.
Sanlam Life Rwanda (previously Soras Life) claims to have a market share of about 80 per cent going by the gross premiums written and an asset base estimated at Rwf36 billion.
Sanlam General Rwanda (Previously Soras General) cited a 21 per cent market share and an asset base of about Rwf40 billion.
The firm’s assets are held in real estate, bonds, treasury bills and term deposits.
“We are now fully part of a group that has over 100 years of experience in the financial industry, this will bring in expertise that we need to be relevant going forward,” Fiacre Birasa, the Chief Executive of Sanlam General.
Jean Hodari, Sanlam Life Rwanda Chief Executive said that at the moment, they are keen on tapping into the group’s technical capacity and support to improve aspects such as actuarial studies.
“We are among other things going to take up the technology to make sure that customers have the best possible services as well as automate most of our operations and processes and introduce new digital products,” he stated.
Is Sanlam Group still shopping for firms to acquire?
Ngulube told The New Times that currently, they are more focused on integration operations of their latest acquisition as well as strategizing for organic growth as opposed to growth by acquisition of new firms.
The merger of Saham Assurances Rwanda and Soras to form Sanlam Rwanda could shake the local insurance industry as it puts the new entity on the lead in regards to market share.
It also comes at a time when there are expectations of mergers and acquisitions following the revision of the minimum capital requirement by the Central Bank to Rwf3 billion for life insurers and Rwf2 billion for general insurers.
The development will also be one to watch as the industry fights to attain profitability. Currently, the sector makes losses in underwriting and is only profitable due to investments in aspects such as real estate, equities and government securities.
Ngulube said that from their experience in multiple markets on the continent, a majority of insurance operations on the continent are overtraded characterised by multiple players, heavy competition often leading to unprofessional tendencies such as price wars.
Insurance penetration is currently at less than 3 per cent with 12 private insurers, 707 agents and 17 brokers.
In the first half of 2019, the sector made an underwriting loss of Rwf900 million.
Sector stakeholders are reviewing proposals and considerations that could salvage the sector include looking at a policy framework that could spur performance in the sector.
Central Bank in August said that compliance with requirements such as insurance of public buildings could serve a great deal to drive uptake.
For instance, Medical practitioners in the country are also supposed to have a cover as per the law, Medical Practitioners Liability Insurance, which also is yet to be enforced or implemented.
With a majority of large projects and assets being insured by external insurers and local firms only play a minimal role, the regulator is also looking into ways local insurers can actually insure some of the large projects. This if effected could improve the diversity in the sector.
The government is also looking into ways local insurers could get a portion of transport insurance especially for imports which are often insured externally often at the point of origin of the goods.
If effected, this could further facilitate diversification of the sector as currently, transport premiums make 1 per cent of all premiums.
However, analysts say that interventions ought to go beyond regulation and policy adjustments to bringing on board the skill needed in the market to study the risks exposure and profitable approaches to premiums.
The Association of Insurers, is also advocating for policies and regulations that have a positive impact on the sector such as mandatory fire insurance for public buildings.
A pending acquisition in the local insurance sector is the takeover of the National Insurance Company (Sonarwa) by BK Group. BK Group has since opened talks with the Rwanda Social Security Board (RSSB), the largest shareholder of the firm.
RSSB has a shareholding of up to 100 per cent shares in Sonarwa Life and 79.46 per cent in Sonarwa General.