DEVELOPMENT AND GROWTH

1. DEVELOPMENT AND GROWTH OF INSURANCE INDUSTRY IN RWANDA

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3. ROLE OF INSURANCE Insurance Industry is a vital part of the Finance Sector of the National Economy. It plays a number of fundamental roles: It is a Risk Transfer Mechanism whereby individuals, households, businesses, institutions and governments transfer their risks to insurers in return for payment of premium It promotes financial security and social stability through provision of compensation for those insureds who suffer losses It mobilizes and channels savings to productive use for economic development It supports trade and entrepreneurial activities and provides employment It improves the quality of lives of individuals and families INTRODUCTION 3

4. The insurance industry in Rwanda is small but is growing rapidly. It comprises of 5 life/non-life insurers and 3 medical insurers The industry in Rwanda is quite young compared to many other countries in Africa The insurance business in Rwanda started in 1975 when the National Insurance Company � SONARWA was incorporated. It was given a monopoly for 10 years by the 1975 Insurance Law. The Company has now been privatised with Government holdings reduced to 30% THE DEVELOPMENT OF INSURANCE INDUSTRY IN RWANDA 4

5. The second insurance company (SORAS) was formed in 1985 and was 100% privately owned The first insurance broker was established in 2006 By end of 2009 the number of insurers have grown to 8, and the number of insurance brokers to 6 However there are still no Reinsurers, Actuaries and Professional Loss Adjusters (companies) in Rwanda 5

6. The supervision and regulation of the insurance sector in Rwanda started only in 2002 with the formation of the National Insurance Commission The NIC introduced insurance code but this was not comprehensive enough and predatory pricing and other problems arose in the industry In 2007 the supervision of the insurance sector, together with other non bank financial institutions, was placed under the mandate of the National Bank of Rwanda (BNR) REGULATION OF THE INSURANCE INDUSTRY IN RWANDA 6

7. The BNR quickly established dedicated department to oversee the insurance sector and put in place the legal and regulatory structure for supervising the sector In March 2009, a new Insurance Law (Law 52/2008 of 10/09/2008) was passed. Among other things it requires that insurers should separate their Life and Non-Life businesses and increase capital for each branch to RWF 1 billion The new Insurance Law also empower BNR to: Licence insurers and insurance intermediaries and ensure that they conduct their operations in a safe, sound and fair manner 7

8. The BNR has subsequently published the following laws to implement the Insurance Act 2009: Regulations No 04/2009 on Accreditation & other requirements for External Auditors of Banks Insurers & Insurance Brokers Regulation No 05/2009 on Capital Licensing and other requirements for insurance companies Regulation No 06/2009 on Licensing and other requirements for insurance intermediaries 8

9. Regulation No 07/2009 on Corporate Governance Requirements for insurers and insurance business Regulation No 12/2009 on Market and other Requirements for Insurers and Insurance Intermediaries With these set of Regulations, the Insurance Industry is set to undergo a dramatic transformation to a vibrant, dynamic and highly productive sector 9

10. Challenges Low patronage of insurance � insurance penetration is consistently below 5% of GDP The Premium income of 5 Life & Non-Life Insurance coys over the past three years are as follows: PREMIUM INCOME OF ASSAR MEMBERS 20 06 RwF 2007 RwF % Inc. 2008 RwF % Inc. 10,617,202,635 13,350,602,504 26 17,837,517,807 34 CHALLENGES AND OPPORTUNITIES 10

11. Low level of insurance penetration is due to little awareness of the benefits of insurance and Low level of income and wealth leaving little on no disposable income for insurance Other challenges include capacity building for insurance practitioners because of low dept of professional training and Capacity building for insurance supervisors in the areas of off-site and on site supervision 11

12. OPPORTUNITIES: Strengthening of Insurance Regulatory Structures which induces good corporate governance Microinsurance for the informal sector Agricultural Insurance offers Huge Potential Cross Border Opportunities arising from harmonisation of laws in the East African Region 12

13. Establishment of Ancilliary Professional Services e.g. Reinsurance Companies, Actuaries, Professional Loss Adjusters and College of Insurance Participation in order investment opportunities like Tourism, Estate and impending implosion of the stock market. THANK YOU. Segun DUROJAIYE. 13

14. Insurance in Africa needs to be built, the enormous challenges facing the insurance sector have to be addressed by: Building institutional and human capacity of both the supervisors and the supervised industry Establishing more African insurance training institutes and upgrading existing ones to international standards Compiling and sharing insurance statistics to provide reliable data for actuarial studies which are needed to launch more insurance products WAY FORWARD 14

15. Strengthening the financial capacity of existing insurers through increased capitalization to enable them to operate soundly and compete effectively Encouraging entry of more insurers with substantial financial strength, technological and industry know-how, good risk management, and financial management skills Adopting a policy on microinsurance as part of the broader goal of financial inclusion Establishing a forum to monitor the developments in the insurance sector and to continue the dialogue among stakeholders in the industry WAY FORWARD 15

16. THANK YOU FOR YOUR ATTENTION 16