Bank of Kigali, the country’s largest bank by assets announced on Thursday it is joining the insurance business, an optimism that paints a positive outlook for the sector currently recovering from losses.
The bank’s insurance subsidiary, BK general Insurance was granted a license at the end of last month by Central bank and will be venturing into the non-life business bringing momentum into the sector whose penetration still staggers at 1.5 per cent.
“The insurance company is part of our universal banking model’ which calls for provision of all major services to our customers,” said Laison Naibo, the bank’s chief Operating Officer on Friday.
The Bank had at the beginning of this year announced that is it venturing into the Insurance and telecom sectors with BK general insurance and BK Telecom, which is likely to shake up the competition in the two sectors.
“We are in discussion with African investment limited to acquire a strategic shareholding stake in the insurance sector,” Naibo adding the bank is already into brokerage services through BK Securities Limited.
The insurance company is a wholly subsidiary of Swan general Limited in Mauritius which will following Sanlam insurance from Morrocco that recently bought a big stake in Corar general insurance.
Accordingly, BK General Insurance is joining eight non-life insurers in the sector that also has four life insurers, two public medical insurers, 15 insurance brokers, 367 insurance agents, and 12 loss adjusters.
Central Bank says the entrance of more players is likely to increase innovation as well as products that would help increase the sector’s penetration given the partnership with international insurers.
Statistics from the bank indicates that the insurance sector made a recovery at the end of 2015 recording Rwf306 billion in total assets up from Rwf272 billion at the end of December 2014 a 12 per cent increase.
Whilst, the sector recorded liquidity ratio of 355 per cent about benchmark of 150 percent, with solvency margin standing at 6 percent in December 2015 while the sector’s asset grew by 12 percent to Rwf 222 billion at the end of December 2015.