In an attempt to increase revenues for insurance companies in Rwanda and boost insurance penetration rate, local insurance firms are demanding that imports be insured locally.
“Rwanda Revenue Authority (RRA) should make it mandatory for all imports to be locally covered; thus boosting revenues for local insurance companies and growing the economy,” Bernardin Kubwimana, the Executive Secretary of Association Des Assureurs Du Rwanda (ASSAR).
He explained that all imports are supposed to be insured, saying that about 70 percent of consumed products are imports. He added that Rwanda would highly benefit from the move.
There is high premium of cargo insurance because of piracy and we are losing money in the process, he said.
Local insurance penetration rate stands at 2 per cent. Government targets 10 per cent by 2020 to encourage savings and increase long term investments.
Studies suggest that Africa’s insurance sector represents approximately 1.5 percent of the global Insurance business.
Gerald Mukubu, the Director of Taxpayers at RRA noted that the issue was recently discussed between the tax body and insurers and it was not possible to restrict importers on which type of company they should cover their goods.
“We are in economic liberalisation and in the EAC and for that matter, we operate as a single block thus the need to remove non tariff barriers,” Mukubu emphasised.
Meanwhile, RRA says in their dialogue between business community, importers pointed out that local insurance companies are more expensive compared to others in the region.
“This is an open market, Rwanda is in the process of removing TNB’s; how do we again restrict them on insurance? We advised them to have re-insurance cover with other companies to share the risk, Mukubu said.
The body also suggested that government should make it mandatory to insure public places like markets, and all government buildings like ministries.