Kenyan based health insurer, Resolution Health East Africa Limited (RHEAL), has said it plans to expand its services to Rwanda next year, following its new partnership with German private equity fund, African Develop ment Corporation (ADC).
The announcement follows ADC’s recent $2.3 million equity investment in RHEAL in which the German firm acquired 25 percent stake.
In an exclusive interview with Business Times last week, Peter Nduati, the Group Chief Executive Officer of RHEAL said the additional capital would help drive the planned regional expansion including entry into Rwanda.
“In the recent past, the competition in Kenya is very tight and the competition is such that it is squeezing the margins in terms of how much people can make. Kenyan businesses also have invested in other markets, so there has been demand for us to follow our clients wherever they go….” he said.
.Nduati noted that the company plans to enter through an acquisition in an already existing insurance company though he did not rule out possibilities of green field entry.
“Our idea is basically to acquire an existing license - a company that is already in insurance business but not doing health insurance. We either acquire them or invest in them and we do insurance with them
because we already understand the market,” he said.
He added that: “If we fail to find target companies we will still apply for licenses and set up ourselves,”
RHEAL also plans to open shop in Uganda and Southern Sudan and it is already operating in Tanzania.
Nduati observed that a lot of untapped potential still exists within the regional health insurance industry.
“The only way is to become innovative by developing products that people want, that suit their lifestyle; a person living in a rural area does not have to buy the same product as someone living in an urban area.”
As a result, Nduati said RHEAL is planning to launch new products that will facilitate the increase in heath insurance penetrat
However, the official observed that generally existing knowledge gaps regarding health insurance limit growth of the sector as such the company is planning to fund an education program.
With a market share of more than 10 percent and annual premium income of more than $12.5 million, RHEAL is one of the three leading health insurers in Kenya.