Last week, one of Rwanda’s oldest insurers, Sonarwa General Insurance announced the auction of four of its real estate assets through a local real estate firm, Century. The auction comes weeks after the insurer announced that they would not be proceeding with a much-anticipated acquisition and merger with BK Insurance. The firm is seeking to dispose off 4 properties; a residential house in Kiyovu, Nobilis Apartments, Eastern Garden Complex and Clinique Don de Dieu. Tony Twahirwa, the Managing Director of Sonarwa General Insurance in a recent interview with The New Times said that the disposal of assets is in an attempt to comply with the Central Bank regulations. As of December 2019, the firm’s asset base stood at about Rwf 18.5 billion and there were plans to sell off a section of the assets. The Central Bank’s regulations require that the ratio of property to the total assets should be not more than 30 per cent of the total assets. For Sonarwa, out of its total assets, about Rwf 6.5B are non-current assets. That means the firm’s assets in real estate properties should not be over Rwf 5.5B. As the firm seeks to revamp its operations and improve its position in the market, a portion of the revenue is likely to go into improving operations and increasing market penetration. Rwanda Social Security Board (RSSB) is the largest shareholder of the firm which has been running for about 45 years. RSSB has a shareholding of up to 100 per cent shares in Sonarwa Life Assurance and 79.21 per cent in Sonarwa General Insurance Company Ltd. The shareholders recently told The New Times that there are under no pressure to sell the firm hence choosing to build on the potential the firm has locally to grow insurance penetration. With insurance penetration standing at around 2 per cent, the shareholders said that they see a huge opportunity for them as investors with the promise of returns. In the process of revamping the performance of the firm, they are designing new relevant products, innovation and staff restructuring to improve fitness for performance. This, the firm said will be evident in their services and offering as well as innovation to reach previously unserved markets. “We want to look at the needs of various segments of the population and tailor-make products for them, it’s a priority for us as the Board and have delegated that to the management,” officials from the firm said. Among the aspects that will inform the services by the firm in its new approach include purchasing power and adoption of technology among others. The firm is currently working to drive uptake in the local market through livestock and crop insurance products launched in 2019. Sources have it that the acquisition by BK insurance failed to materialize as the deal fell short in value proposition. Sonarwa have however not ruled out chances of a merger or acquisition of the firm in the future saying that they would be open to talking to players who share in their ambitions of growing the sector and creating a win-win scenario.
