The former market leader to restructure in order to survive in the highly competitive industry following the entry of new players.
Kenyan insurance subsidiaries in Rwanda are giving old players in the industry a run for their money with some coming up openly to say they have ceded the market share to the new players.
In the past three years, the Rwanda market has attracted three Kenyan insurance subsidiaries — UAP, Britam and Phoenix insurance — that have come up with new products and invested in improved services delivery to appeal to more customers.
For instance, Sonarwa, once a market leader commanding over 60 per cent of the market share five years ago has seen new players eat into its market share, which has forced the company to restructure.
“Our market share has dropped to 17 per cent,” said Soji Emiola, managing director Sonarwa General Insurance Company. To avoid being edged out of the market, Mr Emiola announced a new business strategy that could attract new and retaining new clients.
The insurance firm plans to introduce new products for the mass that include micro-insurance products for small-holder farmers like weather based insurance for crops. This product is currently offered by Soras, the oldest private insurance company in the country. Sonarwa also targets savings and credit co-operatives Savings and Credit Cooperative Societies (Saccos).
Saccos have contributed to deepening financial inclusion. Analysts believe coming up with products that appeal to masses is another frontier for insurance sector growth.
There are over two million Rwandans with accounts in Umurenge Saccos. Should Sonarwa come up with the policy for the mass market, this will confirm fears that traditional insurance policies such as motor and medical alone cannot drive growth in the sector.
The few products on the market are largely attributed to low insurance coverage in the country. Currently 1.6 per cent of the 11.5 million in covered.
The chief executive of Britam Rwanda Reuben Kiruki, said the insurance industry in Rwanda is adjusting to the competition, saying there is a need for innovation by players in order to attract more customers.