A new bill for the insurance sector in Burundi
The Briefing, Issue #47, Wednesday February 26, 2020
Dear readers,
The national assembly, this Wednesday analyzed of the Bill revising Law No. 1/02 of January 7, 2014, on the insurance code in Burundi.
The Minister of Finance Dr. Domitien NDIHOKUBWAYO was the guest, he explained to the members of the parliament the importance of revising of the bill—and answered their questions.
As Minister Domitien Ndihokubwayo indicated, the law of 2014 on the insurance code had errors and imperfections both in terms of content and form. In addition, some of the provisions were contrary to the Constitution.
In the new bill, children will henceforth in the compensation process be assimilated to adults who don’t have income.
In the event of an accident, this new bill obliges the insurer who guarantees civil liability due to a land motor vehicle to present an offer of compensation to the victim within a period not exceeding three months from the date of the compensation request and provides for sanctions in the event of failure to comply with this deadline.
The Member of the parliament asked that there be effective control of services provided by insurance companies, their incomes, to make sure that dividends are distributed correctly to shareholders and affiliates.
After the analysis, the Bill revising Law No. 1/02 of January 7, 2014, on the insurance code in Burundi was adopted unanimously.
Burundi Insurance sector
In 2016, the penetration rate of the insurance sector in Burundi was 0.78% of GDP, the lowest in the EAC. Since 2017, the Burundi insurance market has been made up of 8 insurance companies (BIC, Bicor, Egic, Jubilee, Socabu, Socar, Sogear and Ucar).
From 2012 to 2016, the turnover achieved by this sector was constantly increasing. It went from 28 billion Fbu to 37 billion Fbu and it is expected to reach 80 billion FBU by 2022. But, compared to other countries in the region— in particular, the East Africa community —the Burundi insurance market is still narrow with a penetration rate over the 5 years, estimated on average, at 0.84% - apart Uganda, with almost the same penetration rate, Kenya, Rwanda and Tanzania have rates around 2 and 3%.
The latest report from ARCA ( Agence de Régulation et de Contrôle des Assurances) established the insurance penetration rate in Burundi at 0.78% of GDP in 2016 with more than 70% of the premiums generated by non-life insurance.
Socabu being the market leader with more than 40% of the premiums written in the sector, followed by Jubilee and Bicor, respectively, with 21% and 17%, of the shares.
Furthermore, it should be noted that the problem of low penetration rates remains a thorny problem almost everywhere in Africa.
According to the Swiss Re Institute 2017 report, “Africa remains a global dwarf in insurance. With the exception of South Africa, which has a high insurance penetration rate of 15%, and Morocco, with a rate of 3%, all other countries have insignificant insurance penetration rates with an average of around 1% in French-speaking countries. ”
Fabrice Iranzi
Founding Editor, RegionWeek.com
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