The Rwandan insurance industry has reported underwriting losses of RWF900m ($980,000) for the first half of this year.
According to a report in The New Times, the sector also showed underwriting losses of RWF3bn for 1H2018; RWF4.7bn for 1H2017 and RWF8bn for 1H2016.
The sector makes profits from investments such as equities and government securities. Investment gains stood at RWF4.7bn for 1H2019.
There have been several suggestions for dealing with underwriting losses. For instance, Ms Peace Uwase the director for financial stability at the Central Bank, said that compliance with requirements such as insurance of public buildings could serve a great deal to increase business.
In addition, medical practitioner liability insurance is yet to be enforced or implemented.
Currently, the majority of large projects and assets is being insured by external insurers while local firms play a minimal role. Ms Uwase said the authorities are currently looking into ways for local insurers to insure some of the large projects. This, if effected, could improve diversity in the sector.
The government is also looking into ways in which local insurers can provide transport insurance especially for imports which are often insured externally, often at the point of origin of the goods. Currently, the transport class of business contributes 1% of all premiums.
To curb losses, it emerged that the Ministry of Finance in February this year was reviewing an actuarial survey of motor vehicle insurance which could lead to premium hikes.
Financial data from the industry show growing dependence on two classes of business: motor and medical insurance. These lines account for 74% of all premiums.
Analysts say that interventions ought to go beyond regulation and policy adjustments to bringing on board the skills needed in the market. The sector will need actuarial scientists and related skills to study the risk exposure and profitable approaches.
The central bank in 2017 suspended new insurance licensing to grant insurers time to improve their operations and build public confidence in the sector.