19th August 2004.
Insurance industry recovers, grows

By Emmanuel N. Mugarura

On July 4, 1994 the Rwanda Patriotic Front (RPF), took power in Kigali - inheriting nothing but a dead economy. One of the worst affected sectors was the insurance industry, virtually destroyed by the war, bureaucracy in government and general corruption.

Managing Director of the National Insurance Corporation of Rwanda, Ms Marie Claire Mukasine

Many claims remained unpaid because of the corruption and many companies simply gave up taking on insurance policies. After all, there was really nothing to gain after paying their premium.

That was 10 years ago. Today, with the Rwandan economy almost back on the rails, the insurance industry is recovering too as new businesses and investments come up.

“Finally people realise that the insurance companies are not simply ripping them off but are a valuable service,” Ms Marie Claire Mukasine told The Weekly Observer in an interview.

Mukasine is the managing director of National Insurance Corporation of Rwanda – more commonly known as SONARWA. She is also the chairperson of the country’s national insurers association.

Like any other economy, Rwanda needs to insure automobiles, factories, business premises and goods coming in or leaving the country. With growing opportunities, insurance companies are finally giving value for money.

“The process of reimbursements is now quicker and simpler and people are going for insurance,” Mukasine said. Investor confidence is for once high because they know that their property and businesses are secure when the insurance industry is strong.

Apart from SONARWA in which the government has a 10 percent stake, there are three private sector insurance firms. “We diversified the sector because we wanted people to have a choice and better services,” Mukasine said.

SONARWA is not only making money for itself, but it has also set new standards in corporate responsibility by giving back to the communities and the country as a whole.

The company now runs two housing estates in the Kigali suburbs of Nyarutarama and Nyamirambo. SONARWA also owns a building in Kicukiro, occupied by World Food Programme. The four companies in the industry employ 400 people and have 1,000 agents across the country.

SONARWA has other business as well. “We hold shares in several companies. They have been growing and we have also been growing,” Mukasine said. SONARWA also invests in central bank bonds.

Mukasine said the industry is making profits, even if it does not always exceed projected targets. The main role of insurance companies is to compensate clients to enable them do their business well, she said.

However, the accident ratio in Rwanda is high and this imposes a heavy burden on insurance firms. As a result, the premium can sometimes be quite high, which scares away some potential customers.

Mukasine said that a developing economy like Rwanda needs more obligatory insurance, especially for fire and accidents. Meanwhile the government plans to sell its shares in SONARWANA under the ongoing privatisation process.