Small business owners, cooperatives and low income earners will now find it easier to acquire insurance cover for their enterprises and other things, thanks to new micro-insurance products unveiled by BK General Insurance. They are micro loan protection insurance cover that targets cooperatives and other groups; SME business insurance cover for individual small and medium enterprises; and individual accident insurance policy, which covers for any kind of accident.
Alex Bahizi, the chief executive officer of BK General Insurance, a subsidiary of Bank of Kigali, told The New Times yesterday that the products are designed for the mass market and individual SMEs that are not catered for by the products on the market presently. “We want to work with SMEs that have promising ideas and offer them guarantees to acquire credit from banks,” he said. The insurer that entered the market last year, said they are also going to work with cooperatives as one of the strategies to bring on board all market segments.
More about the new products
Under the individual accident insurance cover, customers can pay as low as Rwf600 per month for a premium worth Rwf2.5 million, inclusive of medicare.
The two other products seeks to provide loan guarantees for promising projects or ideas by cooperatives or individual businesses particularly those that lack collateral, according to Bahizi
He said the firm will focus on developing more innovative products that will bring more Rwandans on board. This, he said, will help increase insurance penetration levels in the country. Rwanda’s insurance penetration levels have stagnated at about 2.8 per cent, a situation that has been blamed on lack of innovative products by sector players.
Bahizi is confident that investing in micro-insurance could boost uptake levels, especially among the ‘lower end of the pyramid’ market segment. He argued that making insurance affordable will also help make the sector more competitive.
Bahizi also said the firm looks to ensure excellent customer service and value addition as well as efficiency especially when settling claims to encourage more Rwandans to embrace insurance.
He noted that with such interventions, penetration could hit 12 per cent by 2020, translating to Rwf23 billion for the firm.
Industry observers say BK General Insurance will exploit Bank of Kigali’s already dominant market share for initial business, which they say could hurt other market players. They say, for instance, that if a customer got a mortgage from the Bank of Kigali, they could insure the property with BK General Insurance, making it a sort of one-stop centre for customers.
According to central bank figures, the sector’s assets rose by 16 per cent to Rwf134 billion as at end of December 2016. Private insurers, however, suffered a net loss of Rwf4.4 billion over the reporting period up from a loss of Rwf2.7 billion recorded in December 2015.