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
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,