Mau­ri­tius in­vestor buys stake in Rwanda in­surer

IBK Gen­eral In­sur­ance is one of the sub­sidiaries re­cently set up by Bank of Kigali (BK), the coun­try’s largest bank by as­sets, and li­censed by Rwanda’s Cen­tral Bank. Other sub­sidiaries are BK Tele­com and BK Se­cu­ri­ties Lim­ited

East African Business Week - - FRONT PAGE - BY TRIPHOMUS MUYAGU

KIGALI, RWANDAA MAU­RI­TIUS-BASED in­vestor is set to ac­quire a 30% stake in Rwanda’s new in­sur­ance firm, of­fer­ing the com­pany the cru­cial mar­ket en­dorse­ment it needs ahead of its launch, by end of this month (Fe­bru­ary).

BK Gen­eral In­sur­ance is one of the sub­sidiaries re­cently set up by Bank of Kigali (BK), the coun­try’s largest bank by as­sets, and li­censed by Rwanda’s Cen­tral Bank. Other sub­sidiaries are BK Tele­com and BK Se­cu­ri­ties Lim­ited. Cur­rently, BK Gen­eral In­sur­ance is 100% owned by BK, which it­self marked 50 years of ser­vice last week and has grown tremen­dously over the years. In 2015, BK total as­sets were valued at US$774.1 mil­lion (RWF:568.4 bil­lion). Alex N. Bahizi, CEO of BK Gen­eral In­sur­ance, told this pub­li­ca­tion in an in­ter­view that ne­go­ti­a­tions with the in­vestor, Aprica In­vest­ments Ltd are at ad­vanced stages while the deal awaits reg­u­la­tory ap­proval from the Na­tional Bank of Rwanda (BNR). “Aprica is a multi-in­vest­ment com­pany and if the plan suc­ceeds, they also bring ex­po­sure, know-how and ex­pe­ri­ence (to the busi­ness). We will learn a lot from them and vice versa,” he said. It is ap­par­ent the deal will not be signed by launch day, Fe­bru­ary 27th, 2017 but the new in­surer’s en­try is ex­pected to drive in­sur­ance cov­er­age higher than the cur­rent lev­els, which stand at a low 2.8%. Primed with a US$ 6 mil­lion (about Frw 5bil­lion) cap­i­tal­iza­tion fund, the com­pany has re­cently propped up its op­er­a­tions, set­ting up branches that are pegged to its 70-strong par­ent bank net­work na­tion­wide, and fill­ing up se­nior staff po­si­tions. Bahizi said the firm would largely fo­cus on the com­pet­i­tive non-life, pri­vate com­mer­cial prop­erty, mo­tor ve­hi­cle, trans­porta­tion and en­gi­neer­ing cover for plant and ma­chin­ery, among oth­ers. “We are proud that in the first quar­ter of op­er­a­tion, we have man­aged to raise rev­enues of Rwf 500 mil­lion ( ap­prox­i­mately USD 6OO mil­lion) and well over one

thou­sand cus­tomers. It is a promis­ing start that at the end of year, we will have good re­turns,” he said. The com­pany is also bank­ing on un­der­writ­ing larger risks with re-in­sur­ers, such as ZEP-RE (PTA Rein­sur­ance) and Africa Rein­sur­ance Cor­po­ra­tion (Africa Re), a com­mon in­dus­try prac­tice. Other ar­eas of the firm’s fo­cus in­clude mi­cro in­sur­ance prod­ucts tar­get­ing peo­ple not cov­ered by any kind of in­sur­ance, largely de­liv­ered via mo­bile phones.

The new in­surer has al­ready taken ad­van­tage of the bank­ing re­la­tion­ship set up by par­ent com­pany to scoop up cov­eted ac­counts that in­clude East African Gran­ite In­dus­tries, In­ter­sec Se­cu­rity Com­pany ( ISCO) and NPD Con­traco, among oth­ers. “We en­tered in­sur­ance sec­tor when we were con­fi­dent. BK is the lead­ing lender in the coun­try it has im­pres­sive prof­itabil­ity and as­set base, we wanted to di­ver­sify the busi­ness af­ter do­ing well in bank­ing. We can also tap into other sec­tor vi­able for in­vest­ment like in­sur­ance sec­tor,” Bahizi said. Un­til re­cently, in­sur­ance in Rwanda was largely dom­i­nated by en­trenched play­ers, SONARWA, SORAS and RSSB for both life and non­life cover. How­ever, re­cently, an up­surge of new com­ers has raised their num­ber to about fif­teen. Based in the Mau­ri­tius cap­i­tal, Fort Louis, lit­tle known Aprica In­vest­ments, which was set up in 2014, is touted as strate­gic in­vestor that is specif­i­cally in­ter­ested in the in­sur­ance sec­tor in Sub Sa­hara Africa.

Other ar­eas of the firm’s fo­cus in­clude mi­cro in­sur­ance prod­ucts tar­get­ing peo­ple not cov­ered by any kind of in­sur­ance,

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