Announcements Criteria Research

GCR Publishes Insurance Sector Risk Score for Rwanda

Johannesburg, 05 November 2019: GCR Ratings (“GCR”) has published the Insurance Sector Risk Score for Rwanda.

The Insurance Sector Risk Score is available for download at gcrratings.com/risk-scores/.

The GCR Insurance Sector Risk Assessment

The Insurance sector risk score (ranging from 0 to 15) is a key factor in the operating environment component score. The core of the GCR Ratings Framework is based on GCR’s opinion that an entity’s operating environment largely frames its creditworthiness. As a result, the operating environment analysis anchors the underlying risk score for the GCR rating methodology. GCR combines elements of the country risk and sectoral risk analysis, blended across countries for entities operating across multiple jurisdictions, to anchor an insurer to its current operating conditions. For more details on any of the above, please read the related criteria and research listed below.

GCR will periodically publish updated “Insurance Sector Risk Scores”, which will supersede previous publications. The publication titled “GCR Insurance Sector Risk Scores, 05 November 2019”, available at https://gcrratings.com/risk-scores/, supersedes the article published on 30 July 2019.

Rwanda Insurance Sector Risk Score

Republic of Rwanda, Sector Risk Score 3.25. Country Risk Score 4.25*, Mapping Table 4.0 to 4.5

Rwanda’s sector risk score reflects a fair level of insurance penetration and healthy market growth, while very low levels of transparency moderate GCR’s view of the regulatory environment despite remarkable progress in implementing a Risk Based Solvency regime. The market’s insurance penetration is estimated at 1.7%, surpassing that of several regional peers, although insurance density is within the low ranges, at USD13 per person. Nonetheless, insurance density is expected to gradually creep up given a healthy average real annual growth rate of between 5% and 10%. Strong enforcement of regulations, offsetting very low industry data transparency, ensured moderate success in implementing cash and carry premium regulations and the current parallel run on the Risk Based Solvency model. These regulations are expected to reduce earnings risk, largely caused by soft motor rates and the impact of a high minimum wage on accident claims, resulting in persistent underwriting losses among private players in the market. While this is somewhat balanced by the more profitable public sector, earnings risk is viewed to be moderately high. In order to manage price based competition, the regulator issued a moratorium on new insurance players, escalating barriers to entry to a high level. The market’s financial sector risk score is viewed to be negative.

*Country Risk scores as at date of publication.

Analytical contacts

Primary analyst Godfrey Chingono Deputy Sector Head: Insurance
Johannesburg, South Africa GodfreyC@GCRratings.com +27 11 784 1771
Secondary analyst Yvonne Mujuru Sector Head: Insurance
Johannesburg, South Africa YMujuru@GCRratings.com +27 11 784 1771

Related criteria and research

Criteria for the GCR Ratings Framework, May 2019

Criteria for Rating Insurance Companies, May 2019

GCR Country Risk Scores, June 2019

GCR Financial Institutions Risk Scores, July 2019



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