BK Group, the biggest financial services group in Rwanda, has announced plans to merge its subsidiary BK General Insurance with Rwanda Social Security Board (RSSB)-owned Sonarwa General and Sonarwa Life Assurance. The objective of the move is to increase and consolidate market share.
The merger, along with more consolidation among other players, could transform the industry by boosting innovation and expanding insurance coverage, reported the newspaper The New Times, citing analysts.
“Market players are watching closely, hoping to learn a thing or two,” said Mr Andrew Kulayige, chairman of the Rwanda Association of Insurers. Mr Kulayige, who is also the CEO of Britam Insurance Rwanda, indicates that there is a possibility of more mergers in the market.
“We may see more consolidation in the sector, or individual companies might inject additional capital to stay competitive,” he said, adding that the industry presents untapped potential given the low penetration rate.
Rwanda’s insurance sector has recorded moderate growth over the years. However, the penetration rate currently stands at 2.1%, below the 7% global average.
But industry observers argue that increasing penetration alone will not address the challenges that the sector is facing. Claim settlements, premium growth, insurance awareness and customer retention are seen as key in easing issues in the industry.
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