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RADIANT INSURANCE COMPANY LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

Radiant Insurance Company Limited Annual Report and Financial Statements For the year ended 31 December 2019

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CONTENTS PAGE

Company Information 1-2

Report of the Directors 3

Corporate Governance Statement 4-6

Statement of Directors’ Responsibilities 7

Report of the independent auditor 8 - 12

Financial Statements:

Statement Comprehensive Income 13

Statement of Financial Position 14

Statement of Changes in Equity 15

Statement of Cash Flows 16

Notes to the Financial Statements 17-73


1

COMPANY INFORMATION

DIRECTORS

The directors who served during the year and to the date of this report are listed below:

Mr. KARANGWA Protais* Non-Executive Director Chairman December 2014 Mr. RUGENERA Marc** Executive Director Managing Director September 2012 Mr. GASANGWA Jean Baptiste** Non-Executive Director Appointed September 2012 Mr. MUGIRANEZA Yussuf* Non-Executive Director Shareholder Appointed December 2012 Mrs. MUKANTABANA Marie* Non-Executive Director Appointed September 2012 Mr. RURANGWA Valence** Non-Executive Director Shareholder Appointed September 2012 Mr. TWILINGIYEMUNGU Joseph* Non-Executive Director Appointed November 2013 Mrs. NYIRANEZA Joyce* Non-Executive Director Appointed 18 April 2019

*Independent Directors ** Non-independent Directors

INCORPORATION AND REGISTRED

The company is incorporated and domiciled in the Republic Rwanda as a Limited Company and is domiciled in Rwanda. The address of its registered office is:

Radiant Insurance Company Limited KN2 Avenue. Chic Building P.O. Box 1861 Kigali, Rwanda

AUDITOR

KPMG Rwanda Ltd 5th Floor Grand Pension Plaza Boulevard de la Révolution P.O. BOX 6755 Kigali, Rwanda

BANKERS

Equity Bank Rwanda Plc P.O. Box 494 Kigali, Rwanda

I&M Bank Rwanda Plc P.O. Box 354 Kigali, Rwanda

KCB Bank Rwanda Plc P.O. Box 5612 Kigali, Rwanda

Ecobank Limited P.O. Box 3268 Kigali, Rwanda

Bank of Kigali Plc P.O. Box 175 Kigali, Rwanda

Cogebanque Plc P.O. Box 4062 Kigali, Rwanda

Banque Populaire du Rwanda Plc P.O. Box 1348 Kigali Rwanda

Urwego Opportunity Bank Plc P.O. Box 748 Kigali, Rwanda

Bank of Africa Rwanda Plc P.O. Box 265 Kigali, Rwanda

ACCESS Bank Rwanda Plc P.O Box 2059Kigali Rwanda


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BANKERS

Letshego Holdings Plc P.O. Box 6839 Kigali, Rwanda

Copedu Plc P.O. Box 4053 Kigali, Rwanda

UNGUKA Bank Plc P.O Box 6417Kigali, Rwanda

Amasezerano Community Banking P.O Box 4691Kigali, Rwanda

Axon Tungana Microfinance Plc P.O Box 6441Kigali, Rwanda

Development Bank of Rwanda Plc P.O Box 1341Kigali,Rwanda.

Umutanguha Finance Plc P.O Box 2998Kigali,Rwanda

Duterimbere-IMF,Plc P.O Box 6719Kigali Rwanda

Zigama Credit & Savings Society P.o Box 4772Kigali, Rwanda

Goshen Finance P.O Box 4787Kigali, Rwanda.

Guaranty Trust Bank (Rwanda) Plc P.O. Box 331 Kigali, Rwanda

CBA Plc P O Box 4312 Kigali, Rwanda

COMPANY SECRETARY

UZARAMA Vincent KN2 Avenue. CHIC Building P.O. Box 1861 Kigali, Rwanda


REPORT OF THE DIRECTORS

The directors submit their report together with the audited financial statements for the year ended 31 December 2019, which show the state of Radiant Insurance Company (the "Company") affairs.

PRINCIPAL ACTIVITIES

Radiant Insurance Company Limited underwrites non-life Insurance risks, such as those associated with motor, property, medical and third-party liabilities. The Company is a limited liability company incorporated and domiciled in Rwanda.

RESULTS

Loss for the year of FRW '1.190 billion (2018: Profit of FRW 761.9 million) has been added to the retained earnings of the company.

DIVIDENDS

The Directors do not recommend the payment of a dividend for the year (2018: Nil). ,/

Directors

The directors who served during the year ended 31 December 2019 and to the date of this report are listed on page 2.

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AUDITOR

The company's independent auditor KPMG Rwanda Limited, was appointed in 2019 in accordance with the Law No. 17/2018 of 13/04/2018 governing companies and the Regulation No 14/2017 of 23/11/2017 of the National Bank of Rwanda on accreditation requirements and other conditions for external auditors for financial institutions, and has expressed their willingness to continue in office.

APPROVAL OF THE FINANCIAL STATEMENTS

The Ii nan ci a I statements we re app ro ed at a meeting of the di recto rs held on . rJ.1 .'\ .. -� ..... 2020

Date ..... _J,._ "7 ... M !1.1 .......... 2020

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Radiant Insurance Company LimitedAnnual Report and Financial StatementsFor the Year ended 31 December 2019

CORPORATE GOVERNANCE STATEMENT

Board of Directors

The directors who served during the year ended 31 December 2019 are listed on Page 2.

Though the overall responsibility of monitoring and controlling the operational and financial performance of Radiant Insurance Company Limited vests with the board of directors, the day to day management of the company has been delegated to the Managing Director.

Board Meetings and Attendance

In 2019, the attendance at Board meetings is set out below:

Name Number of meetings held

Number of meeting attended.

KARANGWA Protais 5 5 RUGENERA Marc 5 5 GASANGWA Jean Baptiste 5 4 MUGIRANEZA Yussuf 5 5 MUKANTABANA Marie 5 5 RURANGWA Valence 5 5 TWILINGIYEMUNGU Joseph 5 5 NYIRANEZA Joyce 5 2

The Board of Directors meets at least quarterly and is chaired by a non-executive director.

Board Committees

The Board has instituted various committees to assist It In fulfilling its role of monitoring key activities of the company. The Board reviews the reports and minutes of the committees and Is accountable of its decisions and functions.

Board Audit Committee

The Board Audit Committee key objective is to assist the Board In providing an independent review of the effectiveness of the financial reporting process and internal control system of the company. It reviews the performance and findings of the Internal Audit and Compliance function and recommends appropriate remedial action at least quarterly.

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In 2019, the Board Audit Committee members and attendance of meetings is set out below:


Number of meetings attended

MUGIRANEZA Yussuf (Chairman) 4 4MUKANTABANA Marie 4 4 TWILINGIYEMUNGU Joseph 4 4 NYIRANEZA Joyce 4 1

The Audit Committee meets at least quarterly and is chaired by a non-executive director

Board Risk Management Committee

The Board Risk Management Committee key objective is to assist the Board in reviewing and overseeing the overall investment policy of the company. It deliberates and considers Investments proposals made by the senior management and ensures there are effective procedures and resources for effective and efficient management of Investment portfolio. Besides, the committee ensures that the company has and Implements sound procedures to enable compliance with laws, rules and regulations; and to formulate appropriate strategies to effectively and efficiently manage risks across the company.In 2019, the Board Risk Management Committee members and attendance of meetings is set out below:

Name Number ofmeetings held

Number of meeting attended

TWILINGIYEMUNGU Joseph (Chairperson) 4 4 GASANGWA Jean Baptiste 4 3 RUGENERA Marc 4 4 RURANGWA Valence 4 3

Board Underwriting and Claims Strategy Committee

The Board Underwriting and Claims Strategy Committee key objectives consist of establishing and reviewing the company’s underwriting and claims policies and guidelines including monitoring overall risk tolerance and risk appetite, establishing policy on fraud detection and prevention, establishing and reviewing claims policies and procedures, and establishing and reviewing policies and guidelines governing the Company's reinsurance treaties arrangements.

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In 2019, the Board Underwriting and Claims Strategy Committee members and attendance of meetings is set out below:


Number of meeting attended

MUKANTABANA MARIE (Chairperson) 4 4RUGENERA Marc 4 4 RURANGWA Valence 4 3 GASANGWA Jean Baptiste 4 3

Management Committee

In 2019, Management Committee members and attendance of meetings is set out below:

The Management Committee meets every week and comprises of the Managing Director and top Managers. Its key objective is to monitor the implementation of overall strategy of the company, the committee reviews company's performance of all departments every week and particularly ensures that Radiant Insurance Company Limited operations are running smoothly according to the set objectives and revenue targets.

The composition of Management Committee is as follows

Member PositionMr. RUGENERA Marc Managing Director Mr. NKULIKIYINKA Pierre Claver Deputy Managing Director and Director of

Claims and Litigations Mr. HAKIZIMANA Yassin Director of Administration and Finance Mrs. TUHAIRWE K. Ovia Commercial Director Mrs. UWERA Angélique Director of Medical Insurance Ms. KASINE Sarah Technical Director Mr. UZARAMA Vincent Company Secretary and compliance Officer Mrs. MUKAMUDENGE Immaculée Director of Research and Development

Radiant Insurance Company Limited

Annual Report and Financial Statements

For the Year ended 31 December 2019

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for the preparation of financial statements that give a true and fair view of Radiant Insurance Company Limited, as set out on pages 16 to 78, which comprise the statement of financial position as at 31 December 2019, and the statements of comprehensive income, changes in equity and cash flows for the year then ended, and the notes to the financial statements, which include a summary of significant accounting policies and other explanatory notes, in accordance with International Financial Reporting Standards and in the manner required by the Law No. 17/2018 of 13/04/2018 Governing Companies in Rwanda (the Rwandan Companies Act

) and Regulation No 2310/2018 -0014 [614] of 27/12/2018

of the National Bank of Rwanda on licensing conditions for insurers and reinsurers.

The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and for maintaining adequate accounting records and an effective system of risk management.

The directors have made an assessment of the ability of the Company to continue as going concern and are aware of the emergence of the Corona pandemic as disclosed in note 37 to the financial statements. The directors have re-assessed the appropriateness of the use of the going concern assumption in the preparation of these financial statements. Based on the assessment performed, the directors are of the view that the significant doubt associated with the current uncertainties related to the COVID-19 virus currently does not result in a material uncertainty related to such events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. The directors are confident that the company will continue to operate as a going concern in the year ahead from the date of this statement.

The independent auditor is responsible for reporting on whether, based on their audit, the financial statements give a true and fair view of the company's financial position as at 31 December 2018 and of its financial performance and its cash flows for the year then ended in accordance with the International Financial Reporting Standards and in the manner required by the Law No. 17/2018 of 13/04/2018 Governing Companies in Rwanda (the Rwandan Companies Act

) and Regulation No 2310/2018-0014 [614] of 27/12/2018 of the National Bank of Rwanda on

licensing conditions for insurers and reinsurers.

Approval of annual financial statements

The financial statements on pages 13 to 73 were approved and authorised fo on 29 May........ �·2020

�i;��v------------- Director

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KPMG Rwanda Limited Certified Public Accountants 5th Floor, Grand Pension Plaza Boulevard de la Révolution PO Box 6755 Kigali, Rwanda

Telephone +250 788 175 700/ +250 252 579 790 Fax +254-20-2215695 Email: [email protected] Internet: www.kpmg.com/eastafrica

© 2020. KPMG Rwanda Ltd, is a limited liability company in Rwanda and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

Directors S. Ineget A. Nekuse J. Ndunyu B. Ndung’u

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Independent auditor’s report To the members of Radiant Insurance Company Limited

Report on the audit of the financial statements

Opinion

We have audited the financial statements of Radiant Insurance Company Limited set out on pages 13 to 73 which comprise the statement of financial position as at 31 December 2019, and the statements of comprehensive income, changes in equity and cash flows for the year then ended, and the notes to the financial statements, including significant accounting policies and other explanatory information.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of Radiant Insurance Company Limited as at 31 December 2019, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards, in the manner required by Law No. 17/2018 of 13/04/2018 governing companies in Rwanda and Regulation No. 30 /2019 of 16/12/2019 on publication of financial statements and other disclosures by insurers.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (IESBA Code) and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements taken as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matter How the matter was addressed in our audit

Insurance contract liabilities: Refer to notes 2(e) and 15 of the financial statements

The Company has insurance contract liabilities. Valuation of these liabilities is highly judgemental, and requires a number of assumptions to be made that have high estimation uncertainty. This is particularly the case for those liabilities that are recognised in respect of claims that have occurred, but have not yet been reported to the Company.

Our audit procedures in this area included, among others:

— Evaluating and testing key controls around the claims handling and reserve setting processes of the Company;

— Evaluating claims to identify any unrecorded insurance contract liabilities at the end of the period by evaluating claims received after the reporting date;

— Evaluating a sample of claims reserves through comparing the estimated amount of the reserve to


Report on the audit of the financial statements (continued)

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Insurance contract liabilities: Refer to notes 2(e) and 15 of the financial statements

There is also significant judgement over uncertain future outcomes, mainly the ultimate total settlement of the policyholder liabilities.

The key assumptions that drive the reserving calculations include claims expense, loss ratios, investment returns, and persistency (including consideration of policyholder behaviour), expenses and expense inflation, withdrawals and sensitivity analysis.

The assumptions to be made have high estimation uncertainty and changes in the estimates may lead to material impact on the valuation of the liabilities. The valuation also depends on accurate data extraction from the information systems. If the data used is not complete and accurate then material impacts on the valuation of policyholder liabilities may also arise. Due to the high level of judgment, sensitivity of the assumptions used and complexity of the valuation of insurance contract liabilities, we considered this to be a key audit matter.

appropriate documentation, such as reports from loss adjusters;

— Re-performing reconciliations between the data recorded in the financial systems and the data used in the actuarial reserving calculations;

— Assessing reasonableness of the incurred but not reported reserve balances using the actuarially-determined reserve percentages per class of business;

— Challenging the validity of management’s liability adequacy testing by assessing the reasonableness of the projected cash flows and challenging the assumptions adopted in the context of company and industry experience data and specific product features;

— Comparing the assumptions to expectations based on the Company’s historical experience, current trends and our own industry knowledge;

— Evaluating the governance around the overall company reserving process, including the scrutiny applied by the internal and appointed external actuaries. We assessed qualifications and experience of those responsible and examined the output of the reviews to assess the scope and depth of these processes.

— Using our actuarial specialists to review the reserving methodology including assumptions applied and analytically reviewing the valuation results presented and movements since the previous year-end. We focused on understanding the methodologies applied and examined areas of judgement such as changes in valuation assumptions; and

— Evaluating whether the company’s financial statements disclosures in relation to the assumptions used in the valuation are adequate, including disclosure of key assumptions and judgements.



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Other Matter relating to comparative information

The financial statements of Radiant Insurance Company Limited for the year ended 31 December 2018, were audited by another auditor who expressed an unmodified opinion on those financial statements on 1 April 2019.

Other matter relating to uncertainties due to COVID-19 on our audit

On 11 March 2020, the World Health Organization declared Coronavirus (COVID-19) outbreak a pandemic in recognition of its rapid spread across the globe. COVID-19 pandemic is not expected to have a material impact on the company’s operations. Uncertainties related to the potential effects of COVID-19 are relevant to understanding our audit of the financial statements of the company. All audits assess and challenge the reasonableness of estimates made by companies, the related disclosures and the appropriateness of the going concern assumption of financial statements. The appropriateness of the going concern assumption depends on assessments of the future economic environment and the company's future prospects and performance. The COVID-19 pandemic is an unprecedented challenge for humanity and for the economy globally, and at the date of this report its effects are subject to significant levels of uncertainty. An audit cannot predict the unknowable factors or all possible future implications for a company and this is particularly the case in relation to COVID-19.

Other information

The Directors are responsible for the other information. The other information comprises the Company Information, Report of the Directors and Statement of Directors’ Responsibilities. Other information does not include the financial statements and the auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Directors’ responsibilities for the financial statements

The Directors are responsible for the preparation of financial statements that give a true and fair view in accordance with International Financial Reporting Standards, in the manner required by Law No. 17/2018 of 13/04/2018 governing companies in Rwanda and Regulation N° 30 /2019 Of 16/12/2019 on Publication of financial statements and other disclosures by insurers, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

The Directors are responsible for overseeing the Company’s financial reporting process.



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Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

— Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

— Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

— Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors.

— Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

— Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

From the matters communicated with Directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.



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Report on other legal and regulatory requirements

As required by the Law No. 17/2018 of 13/04/2018 Governing Companies and Regulation N° 2310/2018 - 00014(614] of 27/12/2018 of the National Bank of Rwanda on licensing conditions for insurers, wereport to you based on our audit, that:

i. We have obtained all the information and explanations which, to the best of our knowledge andbelief, were necessary for the purpose of our audit;

ii. Proper accounting records have been kept by the Company, so far as appears from ourexamination;

iii. We have no relationship, interest or debt with Radiant Insurance Company Limited. As indicatedin our report on the financial statements, we comply with ethical requirements. These are theInternational Ethics Standards Board for Accountants’ Code of Ethics for ProfessionalAccountants (IESBA Code), which includes comprehensive independence and otherrequirements.

iv. We have reported internal control matters together with our recommendations to directors ina separate management letter.

v. According to the best of the information and the explanations given to us as the auditor, asshown by the accounting and other documents of the company, the annual financial statementscomply with Article 123 of Law No. 17/2018 of 13/04/2018 Governing Companies in Rwanda.

vi. As shown in note 5 to the financial statements, the company did not meet the minimumregulatory solvency margin as at 31 December 2019.

The engagement partner responsible for the audit resulting in this independent auditor’s report is CPA Stephen Ineget (PC/CPA 0293/0067).

Radiant Insurance Company Limited Annual Report and Financial Statements As at 31 December 2019

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Statement of Comprehensive Income

The notes on pages 17 to 73 are an integral part of these financial statements

2019 2018Notes FRW ‘000 FRW ‘000’

Gross earned premiums 7 11,678,698 9,742,428

Reinsurance premium ceded 8 (1,702,719) (1,731,177) Net earned premiums 9,975,979 8,011,251

Gross claims paid 9 (7,663,181) (7,452,841) Claims ceded 10 1,174,760 1,906,370 Change in insurance contract liabilities 11 (3,126,641) 476,678 Net claims incurred (9,615,062) (5,069,793)

Fees and commission income 12 127,925 320,501 Commission expense 14 (737,060) (578,597) Net Commission incurred (609,134) (258,096)

Underwriting profit before management expenses (248,217) 2,683,362

Expenses Management expenses 13 (2,612,449) (2,718,674) Depreciation and amortization 18, 19,20 (310,593) (168,585) Total expenses (2,923,042) (2,887,259)

Underwriting loss (3,171,259) (203,897)

Investment income 15 881,092 667,212 Accessories fees 16 732,380 575,378 Other operating income 14,165 29,389 Rental income 69,231 85,845

1,696,868 1,357,824

Loss before tax (1,474,391) 1,153,927 Income tax credit/(expense) 17(b) 284,023 (391,945) Loss after tax (1,190,368) 761,982

Other comprehensive income - -

Total comprehensive income for the year (1,190,368) 761,982


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Statement of Financial Position

Notes 2019 2018Assets FRW ‘000’ FRW ‘000’

Property and equipment 18 715,090 505,219 Intangible assets – computer software 19 1,929 3,859 Investment property 20 3,897,407 1,305,060 Investment in Government securities 21 3,050,100 4,417,932 Investment in unquoted securities 22 851,250 446,500 Deferred tax Assets 17(a) 373,054 - Inventories 40 26,625 27,060 Premiums receivables 23 303,477 666,853 Other receivables 24 439,479 775,551 Deferred acquisition costs 25 358,506 109,887 Receivables arising out of reinsurance arrangements 26 3,506,400 2,984,708 Reinsurance share of technical provisions 26 684,654 523,750Receivables arising out of co-insurance arrangements 27 1,651 - Tax Recoverable 17(c) 309,551 - Short term deposits 29 1,588,605 1,081,565 Cash and cash equivalents 28 1,741,756 1,413,569 Total Assets 17,849,533 14,261,513

Equity And Liabilities Equity Share capital 30 4,000,000 4,000,000 Retained earnings 31 (105,650) 1,084,718 Total Equity 3,894,350 5,084,718

Liabilities Lease Liability 32 76,528 - Deferred tax liabilities 17(a) 249,164 160,132 Insurance contract liabilities 33 11,003,805 6,640,140 Other payables 34 1,373,007 1,091,645 Payables arising out of reinsurance arrangements 35 1,172,619 1,116,959 Payables arising out of co-insurance arrangements 36 5,799 - Grant 38 74,268 78,670 Income tax payable 17(c) - 89,248Total liabilities 13,955,185 9,176,794 Total Equity and liabilities 17,849,533 14,261,512

The financial statements on pages 13 to 73 were approved and authorised for issue by the Board of Directors on 29 May 2020



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Statement of Changes in Equity

Share Retained Fair Value Total Capital Earnings Reserve Equity

FRW ‘000’ FRW ‘000’ FRW ‘000’ FRW ‘000’

As at 1 January 2018 3,000,000 1,322,736 - 4,322,736Total comprehensive income

Profit for the year - 761,982 - 821,301

Total comprehensive income 3,000,000 2,084,718 - 5,144,037

Transactions with owners

Share conversion (note 30) 1,000,000 (1,000,000) - -

Total transactions with owners 1,000,000 (1,000,000) - - As at 31 December 2018 4,000,000 1,084,718 - 5,084,718

As at 1 January 2019 4,000,000 1,084,718 - 5,084,718

Total comprehensive income Loss for the year - (1,190,368) - (1,190,368)

Total comprehensive income - (1,190,368) - (1,190,368)

As at 31 December 2019 4,000,000 (105,650) - 3,894,350


Radiant Insurance Company Ltd Annual Report and Financial Statements For the year ended 31 December 2019

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Statement of Cash flows 2019 2018

Notes FRW ‘000’ FRW ‘000’ Cash flows from operating activities Profit before tax (1,474,391) 1,153,927 Adjustment for; Depreciation Property and equipment 18 249,010 101,932 Depreciation investment property 19 59,653 62,793 Amortization of intangible assets 20 1,930 3,860 Investment income 15 (818,109) (646,350) Loss on disposal of quoted shares - - Changes in working capital; (Increase)/Decrease in outstanding premiums 363,376 (432,273) Increase in other receivables 318,334 (354,823) Increase in inventories 435 4,147 Increase/(Decrease) in insurance contracts liabilities 3,302,624 1,165,946 Increase in Reinsurance share of technical provisions and reserves (160,904) (523,750) Increase in deferred acquisition costs (248,619) (109,887) Decrease/(Increase) in other payables 281,356 554,356 Increase in receivables arising from insurance arrangements (1,295,594) (397,973) Increase/(Decrease) in payables arising from insurance arrangements 55,660 (594,882) Cash generated from operating activities 1,337,153 (12,977)

Income tax paid 17 310,965 (669,920) Net cash flow from operating activities 1,026,188 (682,897)

Investing activities Purchase of property and equipment 18 (203,009) (128,357) Purchase of unquoted securities 21 (404,750) (136,500) Purchase of held to maturity investments 22 - - Interest received - 660,211Proceeds from disposal of quoted securities - - Proceeds on maturity of treasury bonds 22 421,200 421,200 Proceeds on maturity short term deposits 29 (507,040) 8,999 Net cash used generated from/(utilised in) investing activities (693,599) 825,553

Financing activities Grant received (4,402) 3,043 Cash flows (utilised in)/generated from financing activities (4,402) 3,043

Increase in cash and cash equivalents 328,187 145,699 Cash and cash equivalents at 1 January 1,413,569 1,267,870 Cash and cash equivalents as at 31 December 1,741,756 1,413,569

Represented by: Bank and cash balances 28 1,741,756 1,413,569

The notes on pages 17 to 73 are an integral part of these financial statements.


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Notes to the financial statements

1 Corporate information

Radiant Insurance Company Limited underwrites non-life Insurance risks, such as those associated with motor, property, medical and third-party liabilities. The Company Is a limited liability company incorporated and domiciled in Rwanda.

2 Significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.

(a) Basis of preparation

The financial statements have been prepared in accordance with International Financial ReportingStandards (“IFRS”). The measurement basis applied is the historical cost basis, except for investmentproperties and available for sale financial assets, which have been measured at fair value.

The preparation of financial statements in conformity with IFRS requires the use of certain criticalaccounting estimates. It also requires the directors to exercise judgement in the process of applying theCompany’s accounting policies. The areas involving a higher degree of judgement or complexity, orwhere assumptions and estimates are significant to the financial statements, are disclosed in Note 2.1.

(b) Statement of compliance

The financial statements are approved and authorized for issue by the board of directors after obtainingthe necessary regulatory approvals. The directors reserve the right to amend or withdraw the financialstatements.

(c) Functional and presentation currency

Items included in the financials are measured using the currency of the primary economic environmentin which the entity operates (‘the functional currency’). The financial statements are presented inRwanda Francs (Frw), which is the Company’s functional and presentation currency.

(d) Changes in accounting policies and disclosures

(i) New and amended standards adopted by the Company (IFRS 16 Leases)

The Company initially applied IFRS 16 Leases from 1 January 2019. A number of other new standards are also effective from 1 January 2019 but they do not have a material effect on the Company’s financial statements. The Company applied IFRS 16 using the modified retrospective approach, under which the cumulative effect of initial application if any is recognised in retained earnings at 1 January 2019. Accordingly, the comparative information presented for 2018 is not restated – i.e It is presented as previously reported under IAS 17 and related interpretations. The details of the changes in accounting policies are disclosed below. Additionally, the disclosure requirements in IFRS 16 have not generally been applied to comparative information. At inception of a contract, the Company assess whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company uses the definition of a lease in IFRS 16.


18

Notes to the financial statements – continued

2 Significant accounting policies - continued

(d) Changes in accounting policies and disclosures - continued

(a) Definition of a lease

Before 1 January 2019, the Company determined at contract inception whether an arrangement was or contained a lease under IFRIC 4 Determining Whether an Arrangement contains a Lease. From 1 January 2019, the Company assesses whether a contract is or contains a lease based on the new definition of a lease. Under IFRS 16, a contract is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration.

On transition to IFRS 16, the Company elected to apply the practical expedient to grandfather the assessment of which transactions are leases. It applied to IFRS 16 only to contracts that were identified as leases before 1 January 2019. Contracts that were not identified as leases under IAS 17 and IFRIC 4 were not reassessed. Therefore, the definition of a lease under IFRS 16 has been applied only to contracts entered into or changed on or after 1 January 2019.

(b) As a lessee

The Company leases assets including buildings.

Before 1 January 2019, the Company classified leases as operating or finance lease based on its assessment of whether the lease transferred substantially all of the risks and rewards incidental to the ownership the underlying asset as a lessee. After adoption of IFRS 16, the Company recognizes right-of-use assets and lease liabilities for most leases.

However, the Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases and leases of low-value assets. Short-term lease refers to a lease that, at the commencement date, has a lease term of 12 months or less. Lease of a low-value asset refers to a lease for which the underlying asset is typically of low value when the asset is new. The Company recognizes the lease payments associated with these leases as an expense on either a straight-line basis over the lease term or another systematic basis.

On transition to IFRS 16, the Company elected to apply the practical expedient to grandfather the assessment of which transactions are leases. The Company applied IFRS 16 only to contracts that were previously identified as leases. Contracts that were not identified as leases under IAS 17 and IFRIC 4 were not reassessed for whether there is a lease under IFRS 16. Therefore, the definition of a lease under IFRS 16 was applied only to contracts entered into or changed on or after 1 January 2019.

Policy applicable from 1 January 2019 as a lessee

At commencement or on modification of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices.

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right -of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incured and an estimate of costs to dismantle and remove the underlying assets or to restore the underlying asset or the site on which it is located, less any lease incentive received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Company by end


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(d) Changes in accounting policies and disclosures continued

Policy applicable from 1 January 2019 as a lessee - continued

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Company by end of the lease term or the cost of the right-of-use asset reflects that the Company will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of- use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurement of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date discounted using the interest rate implicit in the lease, or if that rate cannot be readily determined, the Company uses its incremental borrowing rate as the discount rate.

The Company determines its incremental borrowing rate by obtaining interest rates from external financing sources and make adjustments to reflect the terms of the lease and type of the asset leased.

Lease payments included in the measurement of the lease liability comprise the following:

-Fixed payments, including in substance fixed payments-Variable lease payments that depend on an index or a rate, initially measured using the index or rate asat the commencement date-Amounts expected to be payable under a residual value guarantee; and-The exercise price under a purchase option that the Company is reasonably certain to exercise, leasepayments in an optional renewal period if the Company is reasonably certain to exercise an extensionoption, and penalties for early termination of a lease unless the Company is reasonably certain not toterminate early.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company's estimate of the amount expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recognized in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Company has applied judgment to determine the lease term for some lease contracts in which it is a lessee that include renewal options. The assessment of whether the Company is reasonably certain to exercise such options impacts the lease term, which may significantly affects the amount of lease liabilities and right-of-use assets recognized. The Company has elected not to recognize right-of-use assets and lease liabilities for a leases of short-term leases (lease period less than 12 months) and low-value assets including e-printers. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.


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Policy applicable before 1 January 2019

The Company’s leases are operating leases which do not transfer substantially all the risks and rewards of ownership to the Company. Payments made under the leases are charged to profit or loss in equal instalments over the accounting periods covering the lease term, except where an alternative basis is more representative of the pattern of benefits to be derived from the leased asset. Lease incentives received are recognized in profit or loss as an integral part of the aggregate net lease payments made. Contingent rentals are charged to profit or loss in the accounting period in which they are incurred.

Effects of the adoption of IFRS 16

On transition to IFRS 16, the Company recognized additional right-of-use assets and additional lease liabilities in accordance with the modified retrospective approach. The impact on transition is summarized below:

I. The increases (decreases) in relevant statement of financial position items on transition is summarisedbelow：

1 Jan 2019 FRW ‘000

Right-of-use assets 255,871 Lease liabilities 255,871

II. When measuring lease liabilities and right-of-use assets, the Company discounted lease paymentsusing its BNR’s lending interest rate by bank and by type of borrower at 1 January 2019. The weightedaverage lending interest for commercial banks applied was 17% and this was considered as theincremental borrowing rate.

ii) Impairment of financial assets (Policy applicable from 1 January 2018)

IFRS 9 issued in November 2009 Introduced new requirements for the classification and measurement of financial assets. IFRS 9 was subsequently amended in October 2010 to Include requirements for the classification and measurement of financial liabilities and for derecognition, and In November 2013 to Include the new requirements for general hedge accounting. Another revised version of IFRS 9 was Issued in July 2014 mainly to include (a) impairment requirements for financial assets and (b) limited amendments to the classification and measurement requirements by Introducing a ' fair value through other comprehensive Income' (FVTOCI) measurement category for certain simple debt instruments.

Key requirements of IFRS 9:

• All recognised financial assets that are within the scope of IFRS 9 are required to be subsequentlymeasured at amortised cost or fair value. Specifically, debt Investments that are held within abusiness model whose objective is to collect the contractual cash flows, and that have contractualcash flows that are solely payments of principal and interest on the principal outstanding aregenerally measured at amortised cost at the end of subsequent accounting periods. Debtinstruments that are held within a business model whose objective is achieved both by collectingcontractual cash flows and selling financial assets, and that have contractual terms that give rise onspecified dates to cash flows that are solely payments of principal and Interest on the principalamount outstanding, are generally measured at FVTOCI. All other debt Investments and equityInvestments are measured at their fair value at the end of subsequent accounting periods.

IFRS 9 Financial Instruments


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Policy applicable before 1 January 2019 - continued

ii) Impairment of financial assets (Policy applicable from 1 January 2018) - continued

In addition, under IFRS 9, entitles may make an Irrevocable election to present subsequent changes in the fair value of an equity Investment (that Is not held for trading nor contingent consideration recognised by an acquirer in a business combination) In other comprehensive income, with only dividend income generally recognised in profit or loss.

•With regard to the measurement of financial liabilities designated as at fair value through profit orLoss, IFRS 9 requires that the amount of change In the fair value of a financial liability that isattributable to changes In the credit risk of that liability is presented in other comprehensive income,unless the recognition of such changes In other comprehensive Income would create or enlarge anaccounting mismatch in profit or loss. Changes In fair value attributable to a financial liability's creditrisk are not subsequently reclassified to profit or loss. Under IAS 39, the entire amount of the changein the fair value of the financial liability designated as fair value through profit or loss is presentedIn profit or loss.• In relation to the impairment of financial assets, IFRS 9 requires an expected credit loss model, asopposed to an Incurred credit loss model under IAS 39. The expected credit loss model requires anentity to account for expected credit losses and changes in those expected credit losses at eachreporting date to reflect changes in credit risk since initial recognition. In other words, lt Is no longernecessary for a credit event to have occurred before credit losses are recognised.• The new general hedge accounting requirements retain the three types of hedge accountingmechanisms currently available in IAS 39. Under IFRS 9, greater flexibility has been introduced tothe types of transactions eligible for hedge accounting, specifically broadening the types ofInstruments that qualify for hedging Instruments and the types of risk components of non-financialitems that are eligible for hedge accounting. In addition, the effectiveness test has been overhauledand replaced with the principle of an economic relationship'. Retrospective assessment of hedgeeffectiveness is also no longer required. Enhanced disclosure requirements about an entity's riskmanagement activities have also been Introduced.

IFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early application permitted. Except for hedge accounting, retrospective application is required but providing comparative Information is not compulsory. For hedge accounting, the requirements are generally applied prospectively, with some limited exceptions.

The Company has deferred the application of IFRS 9 until the earlier of: (a) The application of the forthcoming insurance contracts Standard; or(b) 1 January 2023. Classification and measurement

• Fair value gains or losses accumulated in the investment revaluation reserves will no longer besubsequently reclassified to profit or loss under IFRS 9, which is different from the current treatment.This will affect the amounts recognised in the Company's profit or loss and other comprehensiveIncome but will not affect total comprehensive Income;

• All other financial assets and financial liabilities will continue to be measured on the same basesas currently adopted under IAS 39.


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Impairment

IFRS9 requires the Company to record expected credit losses on all of Its debt securities, loans and trade receivables, either on a 12-month or lifetime basis. The Company expects to apply the simplified approach and record lifetime expected losses on all trade receivables. The Company expects a significant looking element to determine the extent of the impact on its equity due to unsecured nature of its loans and receivables.

iii) New and revised IFRSs in issue but not yet effective

IFRS 17 Insurance contracts The new Standard establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts and supersedes IFRS 4 Insurance Contracts.

The Standard outlines a General Model, which Is modified for insurance contracts with direct participation features, described as the Variable Fee Approach. The General Model Is simplified if certain criteria are met by measuring the liability for remaining coverage using the Premium Allocation Approach. The General Model will use current assumptions to estimate the amount, timing and uncertainty of future cash flows and It will explicitly measure the cost of that uncertainty, it takes Into account market Interest rates and the impact of policyholders' options and guarantees.

The implementation of the Standard Is likely to bring significant changes to an entity's processes and systems, and will require much greater co-ordination between many functions of the business, Including finance, actuarial and IT. The Standard is effective for annual reporting periods beginning on or after 1 January 2022, with early application permitted. It is applied retrospectively unless Impracticable, in which case the modified retrospective approach or the fair value approach is applied.

For the purpose of the transition requirements, the date of Initial application is the start If the annual reporting period in which the entity first applies the Standard, and the transition date is the beginning of the period immediately preceding the date of Initial application. The directors of the Company do not anticipate that the application of the Standard In the future will have an impact on the company financial statements.

Amendments to IFRS 9 Prepayment Features with Negative Compensation The amendments to IFRS 9 clarify that for the purpose of assessing whether a prepayment feature meets the SPPI condition, the party exercising the option may pay or receive reasonable compensation for the prepayment irrespective of the reason for prepayment. In other words, prepayment features with negative compensation do not automatically fail SPPI.

The amendment applies to annual periods beginning on or after 1 January 2019, with earlier application permitted. There are specific transition provisions depending on when the amendments are first applied, relative to the initial application of IFRS 9.

The directors of the Company do not anticipate that the application of the amendments In the future will have an Impact on the company financial statements.

There are no other standards that are not yet effective and that would be expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.


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(e) Insurance contracts and investment contracts

Classification

The Company issues contracts that transfer insurance risk or financial risk or both. Insurance contractsare those contracts that transfer significant insurance risk. As a general guideline, the Companydefines as significant insurance risk the possibility of having to pay benefits on the occurrence of aninsured event that are at least 10% more than the benefits payable if the insured event did not occur.

Investment contracts are those contracts that transfer significant financial risk and no significantinsurance risk. Financial risk is the risk of a possible future change in one or more of a specified interestrate, financial instrument price, commodity price, foreign exchange rate, or other variable, provided inthe case of a non-financial variable that the variable is not specific to a party to the contract.

Recognition and measurement

These contracts are casualty, property and short-duration life insurance contracts.

Casualty insurance contracts protect the Company’s customers against the risk of causing harm tothird parties as a result of their legitimate activities. Damages covered include both contractual andnon-contractual events. The typical protection offered is designed for employers who become legallyliable to pay compensation to injured employees (employers’ liability) and for individual and businesscustomers who become liable to pay compensation to a third party for bodily harm or propertydamage (public liability).

Property insurance contracts mainly compensate the Company’s customers for damage suffered totheir properties or for the value of property lost. Customers who undertake commercial activities ontheir premises could also receive compensation for the loss of earnings caused by the inability to usethe insured properties in their business activities (business interruption cover).


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Notes to the financial statements – continued 2 Significant accounting policies - continued

(e) Insurance contracts (continued)

Short-duration life insurance contracts protect the Company’s customers from the consequences ofevents (such as death or disability) that would affect the ability of the customer or his/herdependants to maintain their current level of income. Guaranteed benefits paid on occurrence ofthe specified insurance event are either fixed or linked to the extent of the economic loss sufferedby the policyholder. There are no maturity or surrender benefits.

For all these contracts, premiums are recognised as revenue (earned premiums) proportionally overthe period of coverage. The portion of premium received on in-force contracts that relates tounexpired risks at the reporting date is reported as the unearned premium liability. Premiums areshown before deduction of commission and are gross of any taxes or duties levied on premiums.

Claims and loss adjustment expenses are charged to profit or loss as incurred based on theestimated liability for compensation owed to contract holders or third parties damaged by thecontract holders. They include direct and indirect claims settlement costs and arise from events thathave occurred up to the end of the reporting period even if they have not yet been reported to theCompany. The Company does not discount its liabilities for unpaid claims other than for disabilityclaims. Liabilities for unpaid claims are estimated using the input of assessments for individualcases reported to the Company and statistical analyses for the claims incurred but not reported, andto estimate the expected ultimate cost of more complex claims that may be affected by externalfactors (such as court decisions).

Deferred acquisition costs

Commissions and other acquisition costs that vary with and are related to securing new contractsand renewing existing contracts are capitalised as an intangible asset (DAC). All other costs arerecognised as expenses when incurred. The DAC is subsequently amortised over the life of thecontracts. For property, casualty and short-duration life insurance contracts, DAC is amortised overthe terms of the policies as premium is earned.

The resulting change to the carrying value of the DAC is charged to profit or loss.

Liability adequacy test

At the end of each reporting period, liability adequacy tests are performed to ensure the adequacyof the contract liabilities net of related DAC assets. In performing these tests, current best estimatesof future contractual cash flows and claims handling and administration expenses, as well asinvestment income from the assets backing such liabilities, are used. Any deficiency is immediatelycharged to profit or loss initially by writing off DAC and by subsequently establishing a provisionfor losses arising from liability adequacy tests (the unexpired risk provision).


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Accounting Policies (continued)

2 Significant accounting policies (continued)


Reinsurance contracts held

Contracts entered into by the Company with reinsurers under which the Company is compensatedfor losses on one or more contracts issued by the Company and that meet the classificationrequirements for insurance contracts are classified as reinsurance contracts held. Contracts that donot meet these classification requirements are classified as financial assets. Insurance contractsentered into by the Company under which the contract holder is another insurer (inwardsreinsurance) are included with insurance contracts.

The benefits to which the Company is entitled under its reinsurance contracts held are recognisedas reinsurance assets. These assets consist of short-term balances due from reinsurers, as well aslonger term receivables that are dependent on the expected claims and benefits arising under therelated reinsured insurance contracts. Amounts recoverable from or due to reinsurers are measuredconsistently with the amounts associated with the reinsured insurance contracts and in accordancewith the terms of each reinsurance contract. Reinsurance liabilities are primarily premiums payablefor reinsurance contracts and are recognised as an expense when due.

In certain cases, a reinsurance contract is entered into retrospectively to reinsure a notified claimunder the Company’s property or casualty insurance contracts. Where the premium due to thereinsurer differs from the liability established by the Company for the related claim, the differenceis amortised over the estimated remaining settlement period.

The Company assesses its reinsurance assets for impairment on a regular basis. If there is objectiveevidence that the reinsurance asset is impaired, the Company reduces the carrying amount of thereinsurance asset to its recoverable amount and recognises that impairment loss in profit or loss.The Company gathers the objective evidence that a reinsurance asset is impaired using the sameprocess adopted for financial assets held at amortised cost. The impairment loss is calculatedfollowing the same method used for these financial assets


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Receivables and payables related to insurance contracts and investment contracts

Receivables and payables are recognised when due. These include amounts due to and from agents, brokers and insurance contract holders.

If there is objective evidence that the insurance receivable is impaired, the Company reduces the carrying amount of the insurance receivable accordingly and recognises that impairment loss in profit or loss. The Company gathers the objective evidence that an insurance receivable is impaired using the same process adopted for loans and receivables. The impairment loss is calculated under the same method used for these financial assets.

Salvage and subrogation reimbursements

Some insurance contracts permit the Company to sell (usually damaged) property acquired in settling a claim (for example, salvage). The Company may also have the right to pursue third parties for payment of some or all costs (for example, subrogation).

Estimates of salvage recoveries are included as an allowance in the measurement of the insurance liability for claims, and salvage property is recognised in other assets when the liability is settled. The allowance is the amount that can reasonably be recovered from the disposal of the property.

Subrogation reimbursements are also considered as an allowance in the measurement of the insurance liability for claims and are recognised in other assets when the liability is settled. The allowance is the assessment of the amount that can be recovered from the action against the liable third party.


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(f) Investment property

Property held for long-term rental yields that is not occupied by the Company is classified asinvestment property. Investment property comprises freehold land and buildings. It is carried at fairvalue. Fair value is based on active market prices, adjusted, if necessary, for any difference in thenature, location or condition of the specific asset. If this information is not available, the Companyuses alternative valuation methods such as discounted cash flow projections or recent prices in lessactive markets. These valuations are reviewed annually by an independent valuation expert.Investment property that is being redeveloped for continuing use as investment property, or forwhich the market has become less active, continues to be measured at fair value.

Changes in fair values are recorded in the profit or loss.

Property located on land that is held under an operating lease is classified as investment propertyas long as it is held for long-term rental yields and is not occupied by the Company. The initial costof the property is the lower of the fair value of the property and the present value of the minimumlease payments. The property is carried at fair value after initial recognition.

If an investment property becomes owner-occupied, it is reclassified as property, plant andequipment, and its fair value at the date of reclassification becomes its cost for subsequentaccounting purposes.

If an item of property, plant and equipment becomes an investment property because its use haschanged, any difference arising between the carrying amount and the fair value of this item at thedate of transfer is recognised in equity as a revaluation of property, plant and equipment. However,if a fair value gain reverses a previous impairment loss, the gain is recognised in the statement ofcomprehensive income. Upon the disposal of such investment property, any surplus previouslyrecorded in equity is transferred to retained earnings; the transfer is not made through profit or loss.

(h) Property, plant and equipment

Land, buildings and motor vehicle are stated at fair value, based on periodic, but at least triennial,valuations by external independent appraisers, less depreciation. Land is not depreciated. Buildingsare depreciated on a straight-line basis to allocate the cost over the estimated useful life (60 years) ofthe building. The residual values and useful lives of buildings are reviewed at each statement offinancial position date and adjusted accordingly. Equipment is stated at cost less accumulateddepreciation and accumulated impairment losses. Depreciation is calculated on the differencebetween the cost and residual value of the asset and is charged over the estimated useful life of eachsignificant part of an item of equipment, using the reducing balance method of depreciation.


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Accounting Policies (continued) 2 Significant accounting policies (continued)

(h) Property, plant and equipment (continued)

Buildings 5% Computer Equipment 50% Furniture and equipment 25% Motor vehicles 25% Freehold Land 0%

The assets’ residual values and useful lives are reviewed at each statement of financial position date and adjusted if appropriate. An asset’s carrying amount is written down to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

An item of property and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss when the asset is derecognised.

Repairs and maintenance costs are charged to profit or loss during the financial period in which they are incurred. The cost of major renovations is included in the carrying amount of the asset when it is probable that additional future economic benefits from the existing asset will flow to the company as a result of the major renovation.

(i) Intangible assets – Computer software

Computer software is recognised at cost less amortisation and impairment charges. Computersoftware packages acquired are initially recognised at fair value. Cost associated with maintainingcomputer software programmes are recognised as an expense when incurred. Development coststhat are directly attributable to the design and testing of identifiable and unique software productscontrolled by the Company are recognised as intangible assets when the following criteria are met:

it is technically feasible to complete the software product so that it will be available for use; management intends to complete the software product and use or sell it; there is an ability to use or sell the software product; it can be demonstrated how the software product will generate probable future economic

benefits; adequate technical, financial and other resources to complete the development and to use

or sell the software product are available; and the expenditure attributable to the software product during its development can be reliably

measured.


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Other development expenditures that do not meet these criteria are recognised as an expense when incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

The Company’s intangibles assets are made of the AIMS, Novanet, Sage Pastel softwares and are amortised on reducing balance method at the rate of 50% per annum.

Gains and losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss when the asset is derecognised.

(j) Financial assets and financial liabilities

Financial assets and financial liabilities are recognized when the Company becomes a party to thecontractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that aredirectly attributable to the acquisition or issue of financial assets and financial liabilities (other thanfinancial assets and financial liabilities at fair value through profit or loss) are recognized to the initialcarrying amount of the financial asset/liability, as appropriate on initial recognition

Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fairvalue through profit or loss are recognized immediately in profit or loss.

On initial recognition, it is presumed that the transaction price is the fair value unless there isobservable information available in an active market to the contrary. The best evidence of aninstrument’s fair value on initial recognition is typically the transaction price. However, if fair valuecan be evidenced by comparison with other observable current market transactions in the sameinstrument, or is based on a valuation technique whose inputs include only data from observable

i) Classification

From 1 January 2018, the Company classifies its financial assets in the following measurement categories:

those to be measured subsequently at fair value through PL; and those to be measured at amortised cost.

The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows. For assets measured at fair value through profit or loss, gains and losses will be recorded in profit or loss

ii) Recognition and derecognition

Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Company commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.


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(j) Financial assets and financial liabilities (continued)

iii) Measurement

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

Debt instruments

Subsequent measurement of debt instruments depends on the Company’s business model for managing the asset and the cash flow characteristics of the asset. There are two measurement categories into which the Company classifies its debt instruments:

Amortised cost: Assets that are held for collection of contractual cash flows where those cashflows represent solely payments of principal and interest are measured at amortised cost. Interestincome from these financial assets is included in finance income using the effective interest ratemethod. Any gain or loss arising on derecognition is recognised directly in profit or loss andpresented in other gains/(losses) together with foreign exchange gains and losses. Impairmentlosses are presented within operating and other expenses the statement of profit or loss.

FVTPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. Again or loss on a debt investment that is subsequently measured at FVPL is recognised in profitor loss and presented net within other gains/(losses) in the period in which it arises..

Equity instruments

The Company subsequently measures all equity investments at fair value through profit or loss. Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the statement of profit or loss as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value. Dividends from such investments continue to be recognised in profit or loss as other income when the Company’s right to receive payments is established.

iv) Impairment

From 1 January 2018, the Company assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

The Company applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of these assets.


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(m) Financial instruments (continued)

Derecognition of financial assets

A financial asset is derecognized when:

The rights to receive cash flows from the asset have expired, or

� The company retains the right to receive cash flows from the asset or has assumed anobligation to pay the received cash flows in full without material delay to a third party undera ‘pass-through’ arrangement; and either:� The company has transferred substantially all the risks and rewards of the asset, or� The company has neither transferred nor retained substantially all the risks and rewards ofthe asset, but has transferred control of the asset.

When the company has transferred its right to receive cash flows from an asset or has entered into a pass through arrangement, and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the company’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the company could be required to repay.

In that case, the company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the company has retained.

Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the income.


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Transactions with Related Party Companies

These include loans to and from the holding company, fellow subsidiaries, joint ventures and associates and are recognised initially at fair value plus direct transaction costs. Loans to group companies are classified as loans and receivables. Loans from group companies are classified as financial liabilities measured at amortised cost. Loans to shareholders, directors, managers and employees are classified as loans and receivables.

Trade and other receivables

Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganization, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in profit or loss within operating expenses. When a trade receivable is uncollectable, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating expenses in profit or loss.

Trade and other payables

Trade and other payables, including accruals, are recognised when the company has a present obligation arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the company. Trade and other payables are carried at amortised cost.


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(n) Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-termhighly liquid investments with original maturities of three months or less that are readily convertibleto known amounts of cash and which are subject to an insignificant risk of change in value, andbank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

Income tax expense

Income tax expense is the aggregate amount charged / (credited) in respect of current income taxand deferred income tax in determining the profit or loss for the year. Tax is recognised in the profitor loss except when it relates to items recognised in other comprehensive income, in which case it isalso recognised in other comprehensive income, or to items recognised directly in equity, in whichcase it is also recognised directly in equity.

Current income tax

Current income tax is the amount of income tax payable on the taxable profit for the year, and anyadjustment to tax payable in respect of prior years, determined in accordance with the RwandaIncome Tax Act.

Deferred income tax

Deferred income tax is provided in full on all temporary differences except those arising on the initialrecognition of an asset or liability, other than a business combination, that at the time of thetransaction affects neither the accounting nor taxable profit nor loss. Deferred income tax isdetermined using the liability method on all temporary differences arising between the tax bases ofassets and liabilities and their carrying values for financial reporting purposes, using tax rates andlaws enacted or substantively enacted at the balance sheet date and expected to apply when therelated deferred income tax asset is realised or the deferred tax liability is settled.

Deferred income tax assets are recognised only to the extent that it is probable that future taxableprofits will be available against which temporary differences can be utilised.

Deferred income tax liabilities are provided on taxable temporary differences arising frominvestments in subsidiaries, associates and joint arrangements, except for deferred income taxliability where the timing of the reversal of the temporary difference is controlled by the companyand it is probable that the temporary difference will not reverse in the foreseeable future. Generallythe company is unable to control the reversal of the temporary difference for associates. Only wherethere is an agreement in place that gives the company the ability to control the reversal of thetemporary difference not recognised.

Deferred income tax assets are recognised on deductible temporary differences arising frominvestments in subsidiaries, associates and joint arrangements only to the extent that it is probablethe temporary difference will reverse in the future and there is sufficient taxable profit availableagainst which the temporary difference can be utilised.


34




Income tax expense (continued)

Deferred income tax (continued)

Recognised and unrecognised deferred tax assets are reassessed at the end of each reporting period and, if appropriate, the recognised amount is adjusted to reflect the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current income tax assets against current income tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on the same entity.

Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the statement of profit or loss on a straight-line basis over the period of the lease.

The Company leases certain property, plant and equipment. The Company does not retain a significant portion of the risks and rewards of ownership and these leases are therefore classified as operating leases.

Impairment of non-financial assets

The company assesses at each end of the reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset.

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined.

The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use.

If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss.

An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in profit or loss. Any impairment loss of a revalued asset is treated as a revaluation decrease.

An entity assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for assets other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amounts of those assets are estimated.


35



Impairment of non-financial assets (continued)

The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods.

A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation other than goodwill is recognised immediately in profit or loss. Any reversal of an impairment loss of a revalued asset is treated as a revaluation increase.

Share capital

Ordinary shares are recognised at par value and classified as 'share capital' in equity. Any amounts received over and above the par value of the shares issued are classified as 'share premium' in equity.

Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Shares are classified as equity when there is no obligation to transfer cash or other assets.

Provisions and contingencies

Provisions are recognised when; the company has a present obligation as a result of a past event; it is probable that an outflow of resources embodying economic benefits will be require to

settle the obligation; and a reliable estimate can be made of the obligation.

The amount of a provision is the present value of the expenditure expected to be required to settle the obligation.

Where some or all of the expenditure required settling a provision is expected to be reimbursed by another party, the reimbursement shall be recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement shall be treated as a separate asset. The amount recognised for the reimbursement shall not exceed the amount of the provision.


36




Provisions are not recognised for future operating losses.

If an entity has a contract that is onerous, the present obligation under the contract shall be recognised and measured as a provision.

A constructive obligation to restructure arises only when an entity has a detailed formal plan for the restructuring, identifying at least: the business or part of a business concerned;

the principal locations affected; the location, function, and approximate number of employees who will be compensated for

terminating their services; the expenditures that will be undertaken; and When the plan will be implemented; and has raised a valid expectation in those affected that

it will carry out the restructuring by starting to implement that plan or announcing its mainfeatures to those affected by it.

Retirement benefit obligations

Staff retirement benefits consists of retirement benefits and loyalty benefits. Retirement benefits are accrued based on the number of years work and an employee is entitled to the basic salary with a factor of number of years worked up to a maximum of 12 months. Loyalty bonus is accrued based on the basic salary multiple of a certain number of years in the organisation.

Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the statement of profit or loss over the period of the borrowings using the effective interest method.

Fees paid on the establishment of loan facilities are recognised as transaction cost of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

Borrowing costs

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.


37



Translation of foreign currencies

The financial statements are presented in Rwandese Francs (Frw) rounded to the nearest thousand, which is the Company’s functional and reporting currency. In preparing the financial statements, transactions in currencies other than the Company's functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences on monetary items are recognised in profit or loss in the period in which they arise.

Employee entitlements

Defined contribution scheme The company and all its employees contribute to the Rwanda Social Security Board, which is a defined contribution scheme.

Termination benefits Termination benefits are recognised as an expense when the company is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognised as an expense if the company has made an offer encouraging voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably.

Short-term employee benefits Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for services, net of any applicable taxes.

Insurance premium

Insurance premiums for general insurance contracts are recognised as revenue as detailed in Note 2 (b) Insurance contracts.

Interest income and expenses Interest income and expenses for all interest-bearing financial instruments, are recognised within ‘investment income’ (Note 19) in the statement of profit or loss using the effective interest rate method. When a receivable is impaired, the Company reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income.

Dividend income Dividend income for available-for-sale equities is recognised when the dividend is publicly declared.


38



(p) Critical accounting judgements and key sources of estimation uncertainty

The Company makes estimates and assumptions that affect the reported amounts of assets andliabilities within the next financial year. Estimates and judgments are continually evaluated andbased on historical experience and other factors, including expectations of future events that arebelieved to be reasonable under the circumstances.

The ultimate liability arising from claims made under insurance contracts

The estimation of the ultimate liability arising from claims made under insurance contracts is theCompany’s most critical accounting estimate. There are several sources of uncertainty that need tobe considered in the estimate of the liability that the Company will ultimately pay for such claims.

Impairment of available-for-sale equity financial assets

The Company determines that available-for-sale equity financial assets are impaired when there hasbeen a significant or prolonged decline in the fair value below its cost. This determination of what issignificant or prolonged requires judgment. In making this judgment, the Company evaluates amongother factors, the normal volatility in share price, the financial health of the investee, industry andsector performance, changes in technology, and operational and financing cash flow. Impairmentmay be appropriate when there is evidence of deterioration in the financial health of the investee,industry and sector performance, changes in technology, and financing and operational cash flows

Fair value of financial instruments

The fair value of financial instruments where no active market exists or where quoted prices are nototherwise available are determined by using valuation techniques. In these cases the fair values areestimated from observable data in respect of similar financial instruments or using models. Wheremarket observable inputs are not available, they are estimated based on appropriate assumptions.Where valuation techniques (for example, models) are used to determine fair values, they arevalidated and periodically reviewed by qualified personnel independent of those that sourced them.All models are certified before they are used, and models are calibrated to ensure that outputs reflectactual data and comparative market prices. To the extent practical, models use only observable data;however, areas such as credit risk (both own credit risk and counterparty risk), volatilities andcorrelations require management to make estimates.

Risk management objectives and policiesThe Company issues contracts that transfer insurance risk or financial risk or both. This sectionsummarises these risks and the way the Company manages them.


39

3 Critical accounting estimates and judgments

3.1 Insurance risk

The Company's activities expose it to a variety of financial risks, including its portfolio of risks covered and perils insured. The Company's overall risk management programme focuses on the identification and management of risks and seeks to minimize potential adverse effects on its financial performance, by use of underwriting guidelines and capacity limits, reinsurance planning, credit policy governing the acceptance of clients, and defined criteria for the approval of Intermediaries and reinsurers. The Company has policies in place to ensure that insurance Is sold to customers with an appropriate claim and credit history.

The Company manages the insurance risk in the manner briefly outlined below:

The risk under any one Insurance contract is the possibility that the insured event occurs and the uncertainty of the amount of the resulting claim. By the very nature of Insurance, risk Is random and therefore unpredictable

For a portfolio of Insurance contracts where the theory of probability Is applied to pricing and provisioning, the principal risk that the Company faces under its insurance contracts is that the actual claims and payments exceed the carrying amount of the insurance Liabilities. This could occur If the frequency or severity of claims is greater than estimated. Insurance events are random and the actual number and amount of claims and benefits will vary from year to year from the level established using statistical techniques.

Experience shows that the larger the portfolio of similar insurance contracts, the smaller the relative variability about the expected outcome will be. In addition, a more diversified portfolio is less likely to be affected across the board by a change In any subset of the portfolio.

Frequency and severity of claims The frequency and severity of claims can be affected by several factors. The company manages these risks through Its underwriting strategy, adequate reinsurance arrangements and proactive claims handling. The underwriting strategy attempts to ensure that the underwritten risks are well diversified In terms of type and amount of risk, industry and geography.

Underwriting limits are In place to enforce appropriate risk selection criteria. For example, the company has the right not to renew individual policies, It can Impose deductibles and it has the right to reject the payment of a fraudulent claim. Insurance contracts also entitle the Company to pursue third parties for payment of some or all costs (for example, subrogation).

The reinsurance arrangements include excess of loss, surplus treaties and catastrophe coverage. The effect of such reinsurance arrangements is that the Company should not suffer total net insurance losses of more than predetermined amounts for any one risk In any one year

Claims are payable on claims occurrence basis.

The company Is liable for all Insured events that occurred durlng the term of the contract, even if the loss ls discovered after the end of the contract term. As a result, liability claims are settled over a long period of time and a larger element of the claims provision relates to incurred but not reported claims (IBNR).


40

Notes to the financial statements – continued 3 Critical accounting estimates and judgments -continued

3.1 Insurance risk continued

For certain contracts, the company has limited the number of claims that can be paid In any policy Year or introduced a maximum amount payable for claims in any policy year. The company also has the right to re-price the risk at renewal. It also has the ability to impose deductibles and reject fraudulent claims. Reinsurance is used to manage Insurance risk. This does not, however, discharge the Company's liability as primary insurer. If a reinsurer fails to pay a claim for any reason, the Company remains liable for the payment to the policyholder. The creditworthiness of reinsurers is considered on an annual basis by reviewing their financial strength prior to finalisation of any contract.

The Company reinsurance placement policy assesses the creditworthiness of all reinsurers and Intermediaries by reviewing credit grades provided by rating agencies and other publicly available financial information.

i) Insurance contract liabilities

Gross claims reported, claims handling expenses liability and the liability for claims incurred but not reported (IBNR) are net of expected recoveries from salvage and the Company uses the most reliable technique to estimate the ultimate cost of claims including IBNR provision. Under this method, mature classes of business that have a relatively stable development pattern have appropriate assessment mechanism.

It also includes analysis of historical claims development factors and the selection of estimated development factors based on this historical pattern. The selected development factors are then applied to cumulative claims data for each accident year that Is not fully developed to produce an estimated ultimate claims cost for each accident year. The development of insurance liabilities provides a measure of the Company's ability to estimate the ultimate value of claims.

ii) Reinsurance risk

In common with other Insurance companies, In order to minimize financial exposure arising from large insurance claims, the Company, In the normal course of business, enters into arrangements with other parties for reinsurance purposes. Such reinsurance arrangements provide for greater diversification of business, allow management to control exposure to potential losses arising from large risks, and provide additional capacity for growth. A significant portion of the reinsurance is effected under excess of loss reinsurance contracts. To minimise its exposure to significant losses from reinsurer Insolvencies, the Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from similar geographic regions, activities or economic characteristic of the reinsurers.

Reinsurance contracts do not relieve the Company from its obligations to cedants and as a result the Company remains liable for the portion of outstanding claims reinsured to the extent that the reinsurer fails to meet the obligations under the reinsurance agreements.


41

Notes to the financial statements – continued 3 Critical accounting estimates and judgments continued


2.1.1 Prescribed Methods for Claims Liabilities

These comprise of a reserve for claims that have been reported as at the valuation date but have not yet been settled (known as the reported claims provision) and a reserve for claims that have been incurred prior to the valuation date but not yet reported to the insurer (known as the Incurred But Not Reported ("IBNR") reserve). According to the regulations, "reported claims provision which the insurer should allocate and maintain to meet the total estimated costs arising from events occurring before the end of the financial reporting period and were reported to the insurer within that period and still outstanding less the costs already paid". We adopted the number used in the financials for the reported claims provision.

Prescribed methodologies in the determination of the OCR are as follows.

• Case Estimate Method - using the sum of case estimates as at the valuation date;• Average Cost per Claim Method - using the average cost of claims incurred;• Other methods recognised by the best practice.

Regulatory IBNR methodology.

According to REGULATION N°05/2009 OF 29/07/2009 ON LICENSING REQUIREMENTS AND OTHER REQUIREMENTS FOR CARRYING OUT INSURANCE BUSINESS's, "claims incurred but not reported provision (IBNR) which the insurer shall allocate from the net underwritten premiums to meet the total estimated costs that may result from events occurred before the end of the financial reporting period but were not reported to the insurer within that period and which shall not be lower than fifteen per cent (15%) of the estimated amount of outstanding claims at the end of the previous year". Also, the regulations state that, "outstanding claims provision referring to the total of reported claims provision and the IBNR provision".

The DIRECTIVE N 2310/2019-08[613] OF OCTOBER 2019 ON RISK-BASED CAPITAL ADEQUACY REQUIREMENTS requires insurance companies to adopt an Actuarial estimate of IBNR in submission of their quarterly Risk Based Capital calculations commencing April 2019.

2.1.2 Prescribed Methods for Premium Liabilities

Premium Liabilities are composed of a reserve for policies that have not yet expired at the valuation date (known as the Unearned Premium Reserve ("UPR") and a reserve to allow for the expectation that the UPR may not be sufficient to cover the expected cost of claims and expenses arising from the period of unexpired risk (known as the Additional Unexpired Risk Reserve ("AURR").

According to the regulations, "unearned premiums provision which the insurer shall allocate from the net underwritten premiums to cover premiums pertaining to future financial reporting period to be calculated based on the number of days remaining up to the expiration in case of short-term insurance policies." Our Unearned Premium Reserve (UPR) results were in line with the regulations.


42


3 Critical accounting estimates and judgments - continued


2.1.2 Prescribed Methods for Premium Liabilities continued

For an insurance company, either of the following methods can be used for the determination of the UPR:

• 24ths method corresponding to a risk profile that is spread evenly over each month ofcover (corresponding to monthly reserving); and• 365ths method corresponding to a risk profile that is spread evenly over each day of cover(corresponding to daily reserving).

According to the regulations, "unexpired risks provision which the insurer shall make in order to provide for all claims and expenses in connection with insurance contracts in force in excess of the related unearned premiums and any premiums receivables on those contracts".

Best practice does not prescribe a methodology for the determination of the AURR and this is up to the discretion of the Appointed Actuary. Details of the methodology used to determine the need for an AURR have been included.

2.1.3 Other Methodology

The Company determines its insurance reserves through actuarial valuation. The methods and assumptions underlying these estimates as well as the results are summarised below.

Claim liabilities

The methods we used for the projection of claims for this valuation were; the Basic Chain Ladder Meth("BCL"), the Bornhuetter-Ferguson Method ("BF") and the Loss Ratio method dependent on the classbusiness projected.

Claims data was grouped into triangles by accident period (the origin period) and payment per(Development Period). The choice of period was yearly and was entirely based on the volume and credibof the data per class of business.

The methods mentioned above were applied to gross claims paid data. During the analysis, where it wobserved that there were one off large claims included in either/or in both the paid and outstanding cladata, these claims were excluded from the triangulations and projections to ensure that the developmpatterns were not distorted as a result. They were however considered in determining the resulting ultimprojected loss ratio for each accident year. It is worth highlighting that each accident year was projected independently and thus, a different method can be selected for each accident year.


43

Notes to the financial statements – continued 3 Critical accounting estimates and judgments - continued


Basic Chain Ladder Method ("BCL")

Development factors were calculated using the last six years of data by accident period. Ultimate development factors were calculated for each of the development periods. Link ratios were excluded if they were deemed to be outliers. Ultimate development factors were applied to the paid data per accident period and an ultimate claim amount for each accident period was calculated. The future incurred but not reported claims were allocated to future payment periods in line with the development patterns calculated above. The outstanding claims reported to date were then subtracted from the total future claims to give the resulting IBNR figure per accident period.

For cases where there were extreme large losses that had been reported but not paid, and therefore would not have influenced the development patterns, the total case reserve was excluded from the calculation of IBNR. Assumptions

The BCL method assumes that past experience is indicative of future experience, i.e. that claims recorded to date will continue to develop in a similar manner in the future as they have developed in the past.

An implicit assumption is that, for an immature accident period, the claims observed thus far provide information about the claims yet to be observed.

Further assumptions made in the application of the BCL are as follows:

Claims processing has been consistent; There has been a stable mix of types of claims; and Inflation has been stable.

Bornhuetter-Ferguson Method (BF)

The BF method is an extension of the BCL method as the incremental and ultimate development factors calculated (in accordance with the BCL method) form a critical component of a reserve estimate determined using the BF method.

The BF method is used on more recent accident years (depending on the volume of data available) since the estimates produced using the BCL for these accident years cannot necessarily be relied upon with a sufficient degree of confidence. The BF method is a weighted average approach that uses an assumed loss ratio, termed the Initial Expected Ultimate Loss Ratio ("IEULR") in combination with the original BCL projection.

Assumptions underlying the BF method

Since the BF method is a weighted average between the Initial Expected Ultimate Loss Ratio method and the projected claims incurred using the BCL method, the assumptions underlying the BF method are very similar to those underlying the BCL method.


44



The only major additional assumption underlying the BF method is based on the choice of the Initial Expected Ultimate Loss Ratio.

The Initial Expected Ultimate Loss Ratio that was chosen was assessed by comparing the historic incurred to date and paid to date loss ratios (after removing extreme large losses from the paid and outstanding claims data). These loss ratios were all calculated on an accident year basis, not a financial period basis.

Expected Loss Ratio Method

The Loss Ratio method results in the estimation of ultimate claims by allowing for the incorporation of expected experience to date and the average assumed Ultimate Loss Ratio.

Assumptions

The actuarial valuation used the average incurred and paid to date loss ratios that have been experienced to date in previous accident years.

Unearned Premium Reserve

The method we employ in computation is solely based on the credibility of the data provided in the premium registers, mainly how well the premium data reconciles to the financials per class of business. The Gross UPR was calculated using a time-apportionment basis, in particular, the 365ths method. This implicitly assumes that the risk profile of the business is spread evenly over the year. The calculation of the UPR and corresponding earned premium was sensitive to the dates available in the data and would differ based on the assumptions applied

The Net UPR was estimated by applying a ratio of Net Written Premiums to Gross Written Premiums to the Gross UPR.

Deferred Acquisition Costs

The Gross DAC was estimated by applying a ratio of Gross Commissions to Gross Written Premiums to the Gross UPR. The Net DAC was estimated by applying a ratio of Net Commissions to Gross Commissions to the Gross DAC.

Additional Unexpired Risk Reserve (AURR)

Prior to the calculation of an AURR, the company first considers the profitability of the business underwritten by assessing the revenue account. This, in combination with an assessment of the claims loss ratios may necessitate further investigation into whether an AURR would be necessary, which culminates in the calculation methodology described below. Using reserve balances calculated by through actuarial analysis, the gross earned premium and gross incurred claims were recalculated. Using the recalculated Gross incurred claims, in combination with the management expenses, a combined ultimate loss ratio was calculated for each class of business. This combined ratio was then applied to the UPR to determine the expected future underwriting experience for the unexpired risk period, and to ascertain whether the UPR held as at 31 December 2019 is deemed sufficient or not. This results in the calculation of the URR. The AURR is then determined as the excess of the URR over the UPR but with a minimum limit of zero.


45




The actuarial valuation led to the reserves summarised below :

31 December 2019

Gross

Frw ‘000

Reinsurance

Frw ‘000

Net

Frw ‘000

Claims liabilities

Reported Claims Provision 2,059,753 1,105,821 953,932

IBNR 4,269,113 938,182 3,330,931

Premium Liabilities

UPR 4,604,808 684,654 3,920,154

DAC 420,986 62,480 358,506

AURR 70,131 10,428 59,703

The above reserves have been adopted into these financial statement.

3.2 Financial risk management.

a) Financial risk management

The Company’s activities expose it to a variety of financial risks including credit, liquidity and market risks. The Company’s overall risk management policies are set out by the board and implemented by the management, and focus on the unpredictability of changes in the business environment and seek to minimise the potential adverse effects of such risks on the Company’s performance by setting acceptable levels of risk. The Company does not hedge against any risks.

i) Credit riskCredit risk is the risk that one party to a financial instrument will cause a financial loss for the other partyby failing to discharge an obligation. Credit risk mainly arises from financial assets, and is managed on acompany-wide basis. The Company does not grade the credit quality of financial assets that are neitherpast due nor impaired.

Credit risk on financial assets with banking institutions is managed by dealing with institutions with good credit ratings and placing limits on deposits that can be held with each institution.

Credit risk on trade receivables is managed by ensuring that credit is extended to customers with an established credit history. The credit history is determined by taking into account the financial position, past experience and other relevant factors. Credit is managed by setting the credit limit and the credit period for each customer. The utilisation of the credit limits and the credit period is monitored by management on a monthly basis.


46


3.2 Financial risk management.- continued

i) Credit risk (continued)

The Company has exposure to credit risk, which Is the risk that a counterparty will be unable to pay amounts in full when due. Key areas where the Company Is exposed to credit risk are: • Relnsurers' share of Insurance liabllitles;• Amounts due from reinsurers In respect of claims already paid;• Amounts due from Insurance contract holders;• Amounts due from insurance intermediaries

Premiums outstanding The Company's exposure to credit risk Is Influenced mainly by the individual characteristics of each customer. The demographics of the Company's customer base, including the default risk of the industry in which customers operate, has less of an Influence on credit risk.

The Investment Committee has established a credit policy under which each new customer is analysed Individually for creditworthiness before the Company's standard payment and delivery terms and conditions are offered. The Company's review Includes external ratings, when available, and in some cases bank references. Customers that fall to meet the Company's benchmark creditworthiness may transact with the Company only on a prepayment basis

Policies sold are subject to a cancellation notice in case of default in payment of premium, so that in the event of non-payment the Company may have a secured claim. The Company does not require collateral in respect of premiums due.

As per the new directive No 06/2016 of 23/08/2016 on conduct insurance business the entity shall only sell on credit to government organisations and International agencies.

The Company establishes an allowance for Impairment that represents its estimate of incurred losses in respect of premiums outstanding. The main components of this allowance are a specific loss component that relates to Individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been Incurred but not yet identified. The collective loss allowance Is determined based on historical data of payment statistics for similar financial assets. Investments The Company limits Its exposure to credit risk by only investing in liquid securities. Management does not expect any counterparty to fall to meet its obligations.


47



3.2 Financial risk management- continued


Exposure to credit risk 2019 2018

FRW ‘000’ FRW ‘000’ Cash and cash equivalents 1,741,756 1,413,569 Short term deposits 1,588,605 1,081,565 Premiums outstanding 303,477 666,853 Receivables arising out of reinsurance arrangements

3,506,400 2,984,708

Reinsurance share of technical provisions 684,654 523,750Other receivables 439,479 775,551 Investment in unquoted securities 851,250 446,500 Held to maturity securities 3,050,100 4,417,932

12,165,720 12,310,428 The ageing of the outstanding premiums at the reporting date was:

Premium receivables Gross Gross2019 2018

FRW’000 FRW’000 0-30 days 139,894 453,076 31-60 days 5,503 53,197 61-90 days - 37,777 91-120 days - 7,632 121-150 days - 3,018 150-180 days 27,082 24,030 Over 180 days 130,998 88,123 Impaired

- 147,873Less: allowance for impairment - (147,873)

Net 303,477 666,853

The ageing of the receivables arising out of reinsurance arrangements at the reporting date was:

Reinsurance arrangements 2019 2018

FRW’000' FRW’000'0-30 days 2,904,649 2,320,258 31-60 days - - 61-90 days - - 91-120 days - - 121-150 days - - 150-180 days - Over 180 days 1,286,405 1,188,200 Impaired - - Total 4,191,054 3,508,458


48



3.2 Financial risk management- continued


At amortised At fair value Cost through

Profit or loss Total FRW ‘000’ FRW ‘000’ FRW ‘000’

At 31 December 2019 Assets as per the statement of financial position Held to Maturity investments 3,050,100 - 3,050,100Investment in unquoted market 851,250 - 851,250Premium Receivables 303,477 - 303,477Other receivables 439,479 - 439,479Receivables arising out of reinsurance arrangements

4,191,054 -

4,191,054

Cash and Cash equivalents 1,741,756 - 1,741,756Short term deposits 1,588,605 - 1,588,605

12,165,720 - 12,165,720

At 31 December 2018 Assets as per the statement of financial position Held to Maturity investments 4,417,932 - 4,417,932Investment in unquoted market 446,500 - 446,500Premium Receivables 666,853 - 666,853Other receivables 775,551 - 775,551Receivables arising out of reinsurance arrangements

3,508,458 -

3,508,458

Cash and Cash equivalents 1,413,569 - 1,413,569Short term deposits 1,081,565 - 1,081,565

12,310,428 - 12,310,428

ii) Interest rate exposureThe Company's Interest bearing assets are deposits with financial institutions, governmentsecurities which are at fixed Interest rates. The company is exposed to neither cash flow nor fairvalue Interest rate risk.

2019 2018

FRW'OOO” FRW'OOO“

Investment in unquoted securities 851,250 446,500

Held to maturity securities 3,050,100 3,469,800Held to maturity securities - 948,132Short term deposits 1,588,605 1,081,565

5,489,955 5,945,997

The following sensitivity analysis shows how profit and equity would be affected if the Interest rate variables had been different at the reporting date with all other variables held constant.


49



3.2 Financial risk management.- continued

ii) Interest rate exposure2019 2018

Effect on Effect on profit profit

FRW ‘000’ FRW ‘000’

+5% FRW Movement 274,498 297,300

-5% FRW Movement(274,498)

(297,300)

iii) Foreign exchange risk.

EURO 2019 FRW'OOO

USD 2019 FRW'OOO

EURO 2018 FRW'OOO

EURO 2018FRW'OOO

Cash and bank balances 35,318 63,879 103,861 2,115

The following sensitivity analysis shows how profit and equity would be affected if the market risk variables had been different at the reporting date with all other variables held constant

2019 2018 Effect on Effect on

profit profit FRW ‘000’ FRW ‘000’

Currency – EURO +10% FRW Movement 3,532 212 -10% FRW Movement (3,532) (212)

Currency – USD +10% FRW Movement 6,388 10,386 -10% FRW Movement (6,388) (10,386)

4. Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligationsassociated with financial liabilities. The board has developed a risk management framework forthe management of the Company's short, medium and long-term liquidity requirements thereby ensuring that all financial liabilities are settled as they fall due. The Company manages liquidityrisk by continuously reviewing forecasts and actual cash flows, and maintaining bankingfacilities to cover any shortfalls.

The table below summarises the analysis for financial liabilities. The amounts disclosed are thecontractual undiscounted cash flows.


50


4 Liquidity Risk - continued

2019 2018

FRW’000' FRW’000'Assets 3,050,100 4,417,932Investment in Government securities 851,250 446,500 Investment in unquoted securities 26,625 27,060 Inventories 303,477 666,853Premiums receivables 439,479 775,551 Other receivables 358,506 109,887 Deferred acquisition costs 3,506,400 2,984,708 Receivables arising out of reinsurance arrangements

684,654 523,750

Reinsurance share of technical provisions 1,651 -

Receivables arising out of co-insurance arrangements

309,551 -

Tax Recoverable 1,588,605 1,081,565 Short term deposits 1,741,756 1,413,569 Cash and cash equivalents 3,050,100 4,417,932 Total Assets. 12,862,054 12,447,375

Liabilities 76,528 -Lease Liability 11,003,805 6,640,140 Insurance contract liabilities 1,373,007 1,091,645 Other payables 1,172,619 1,116,959 Payables arising out of reinsurance arrangements 5,799 - Payables arising out of co-insurance arrangements 74,268 78,670 Grant - 89,248 Total Liabilities 13,706,026 9,016,662 Liquidity (gap)/excess -843,972 3,430,713

i) Market Risk

Market risk is the risk that the fair value or future cash flows of financial instruments will fluctubecause of changes in market price and comprises three types of risks: currency risk, interest rate and other price risk.

a) Currency riskCurrency risk arises on financial instruments that are denominated in foreign currency. Trreceivables, cash and trade payables are denominated in foreign currency are immaterial.


51


4. Liquidity Risk – continued

ii) Market Risk continued

b) Equity riskEquity price risk arises from available-for-sale equity securities held. Management of the Compmonitors equity securities in its investment portfolio based on market indices. Material investmewithin the portfolio are managed on an individual basis and all buy and sell decisions are approvedthe Asset Liability Committee.The primary goal of the Company's investment strategy is to maximise investment returns in ordemeet partially the Company's claims payment obligations.

iii) Strategic Risk

Strategic risk is the current and prospective impact on earnings or capital arising from adverse business decisions, improper implementation of decisions, or lack of responsiveness to industry changes. This risk is a function of the compatibility of an organization's strategic goals, the business strategies developed to achieve those goals, the resources deployed against these goals, and the quality of implementation. The resources needed to carry out business strategies are both tangible and intangible. They include communication channels, operating systems, delivery networks, and managerial capacities and capabilities. The organization's internal characteristics are evaluated against the impact of economic, technological, competitive, regulatory, and other environmental changes.

The strategic risks were assessed based on the following indicators;

whether risk management practices are an integral part of strategic planning; Whether strategic goals, objectives, corporate culture, and behaviour are effectively

communicated and consistently applied throughout the institution. Strategic direction andorganizational efficiency are enhanced by the depth and technical expertise of Management;

whether Management has been successful in accomplishing past goals and is appropriatelydisciplined;

whether management information systems effectively support strategic direction and initiatives; exposure reflects strategic goals that are not overly aggressive and are compatible with

developed business strategies; Whether initiatives are well conceived and supported by appropriate communication channels,

operating systems, and service delivery networks. The initiatives are supported by capital forthe foreseeable future and pose only nominal possible effects on earnings volatility;

Whether strategic initiatives are supported by sound due diligence and strong risk managementsystems. The decisions can be reversed with little difficulty and manageable costs;

After assessment of strategic risks based on above criteria, management is convinced that this risk is low.

iv) Operational Risk

The company recognizes that managing operational risk is an important feature of sound risk management practice. The most important types of operational risk involve breakdowns in internal controls and corporate governance. Such breakdowns can lead to financial losses through error, fraud, or failure to perform in a timely manner or cause the operations of the company to be compromised in some other way, for example, by its clients other staff exceeding their authority or conducting business in an unethical or risky manner. Other aspects of operational risk include major failure of information technology systems or events such as major fires or other disasters. The company recognizes all such risks and has adopted mitigating solutions through setting clear strategies and oversight by the board of directors and senior management. a strong operational risk culture and internal control culture (including, among other things, clear lines of responsibility) and effective internal reporting.


52


4. Liquidity Risk – continued

v) Compliance Risk

This is related with conforming to stated requirements. At company level, it is achieved through management processes which identify the applicable requirements (defined for example in laws, regulations, contracts, strategies and policies), assess the state of compliance, assess the risks and potential costs of non-compliance against the projected expenses to achieve compliance, and hence prioritize, fund and initiate any corrective actions deemed necessary. The company feels that compliance risk is moderate.

5. Capital management

The Company's objectives when managing capital are: To comply with the Insurance capital requirements required by the regulators of the insurance markets where the Company operates:

• To safeguard the Company's ability to continue as a going concern so that it can continue toprovide returns for shareholders and benefits for other stakeholders; and• To provide an adequate return to shareholders by pricing Insurance contracts commensuratelywith the level of risk.In Rwanda, the National Bank of Rwanda specifies the minimum amount and type of capital that mustbe held by the company In addition to its insurance liabilities. The minimum required capital must bemaintained at all times throughout the year.

The Company's objectives when managing capital, which is a broader concept than the ‘equity' on the statement of financial position, are: 1. To comply with the capital requirements as set out In the Insurance Regulations;2. To comply with regulatory solvency requirements as set out in the Insurance Regulations; and3. To safeguard the Company's ability to continue in operational continuity, so that it cancontinue to pay benefits to Its members.

2019 2018 FRW ‘000’ FRW ‘000’

Regulatory capital 3,000,000 1,000,000 Issued share capital 4,000,000 4,000,000

The company had met the regulatory capital requirements as at 31 December 2019 and 2018. The shareholder's equity as at 31 December 2019 was FRW 3.632 Million (2018: Frw 5.084 Million)

Capital adequacy and solvency margin are monitored regularly by the Board of Directors. The required information is filed with the National Bank of Rwanda on a quarterly basis.

The solvency margin of the Company as at 31 December 2019 and 2018 is illustrated below;

2019 2018Frw '000 Frw '000

Admitted assets 12,007,283 11,579,726 Admitted liabilities 15,055,563 9,840,808

Solvency margin ratio -168.18% 111.29%

Required ratio 100% 100%


53


5. Capital management– continued

The solvency margin ratio has dropped from 111.29% in 2018 to -168.18% as at 31 December 2019, as a result of the increase in outstanding claims. However, the company’s total capital remains above the minimum required capital of FRW 3 billion. Besides, the historical claims payment experience indicates that RADIANT ’s ability to meet its contractual liabilities hasn’t been affected, as the company has always been able to pay out claims e.g. FRW 7.452 billion in 2018 and FRW 7.663 billion in 2019.

It is also important to note that RADIANT has taken and implemented measures to improve the solvency margin in 2020.

First, the company will sell off its investments in related party (Nord Sud), given the fact thatonly the amount of 25% of those investments is admitted in the solvency margin computation.

Secondly, the company will increase the share of non-motor risks by launching new productsi.e. crop and livestock insurance and fostering bancassurance business among others.

6. Fair value estimation

Valuation hierarchy A number of the Company's accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and Liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values or for the purpose of Impairment testing is disclosed in the notes specific to that asset or liability.

The valuation hierarchy, and types of instruments classified into each level within that hierarchy, is set out below:

Level 1 Level 2 Level 3

Fair value determined using:

Unadjusted quoted prices in active market for identical assets and liabilities

Valuation model with directly or indirectly market observable inputs

Valuation models using significant non-market observable inputs

Types of financial assets:

Actively traded government and other agency securities

Corporate and other governments and loans

Highly structured OTC derivatives withunobservable parameters

Types of financial liabilities: Listed equities Unlisted equities

Highly structured OTC derivatives withunobservable parameters

Listed derivative instruments

Over-the-counter derivatives


54


6. Fair value estimation– continued

Valuation methods and assumptions

Reinsurance assets, insurance receivables, other receivables, deferred acquisition cost, due from related parties, insurance contract liabilities, trade and other payables, due to related parties, approximate their carrying value amounts due to the short-term maturities of these instruments.

The following tables provide the fair value measurement hierarchy of the company's assets and liabilities. The tables below include items that have recurring fair value measurements (i.e. financial assets available sale and held for trading). The fair value measurement also shows the fair value measurement of financial assets at amortised cost (i.e. financial assets held to maturity).

Investments in equity The fair value of financial assets at fair value through profit or loss, held-to-maturity investments and available for-sale financial assets determined by reference to their quoted closing bid price at the reporting date. The fair value of held-to-maturity investments is determined for disclosure purposes only. In case the quoted price does not exist at the date of exchange or in case the quoted price exists at the date of exchange but was not used as the cost, the Investments are valued Indirectly based on discounted cash flow models. The Company measures fair values using the following fair value hierarchy, which reflects the significance of the inputs used in making the measurements.

• Level 1: inputs that are quoted market prices (unadjusted) In active markets for identical instrumentsfor example quoted equity securities. These items are exchange traded positions.

• Level 2: inputs other than quoted prices included within Level 1 that are observable either directly (i.e.as prices) or indirectly (I.e. derived from prices). This category Includes Instruments valued using:quoted market prices in active markets for similar instruments; quoted prices for identical or similarinstruments in markets that are considered less than active; or other valuation techniques in which allsignificant inputs are directly or indirectly observable from market data.• Level 3: Inputs that are unobservable. This category includes all instruments for which the valuationtechnique includes Inputs not based on observable data and the unobservable inputs have a significanteffect on the Instrument's valuation. This category Includes instruments that are valued based on quotedprices for similar Instruments for which significant unobservable adjustments or assumptions arerequired to reflect differences between the instruments.

Valuation techniques include net present value and discounted cash flow models, comparison with similar Instruments for which market observable prices exist. Assumptions and inputs used In valuation techniques include risk-free and benchmark Interest rates, credit spreads and other premier used in estimating discount rates, bond and equity prices, foreign currency exchange rates, equity and equity index prices and expected price volatilities and correlations. The objective of valuation techniques Is to arrive at a fair value measurement that reflects the price that would be received to sell the asset or paid to transfer the liability In an orderly transaction between market participants at the measurement date.

The Company uses widely recognised valuation models for determining the fair value of common and more simple financial instruments, such as interest rate and currency swaps that use only observable market data and require little management judgement and estimation. Observable prices or model inputs are usually available in the market for listed debt and equity securities. Availability of observable market prices and model inputs reduces the need for management judgement and estimation and also reduces the uncertainty associated with determining fair values. Availability of observable market prices and inputs varies depending on the products and markets and is prone to changes based on specific events and general conditions In the financial markets.

As at 31 December 2019 and 31 December 2018, the company had no financial instruments that Were carried at fair value.


55

Notes to the financial statements – continued 7. Gross earned premiums 2019 2018

FRW’000 FRW’000Gross premiums written 11,700,883 10,793,687 Unearned premium at the end of the year (3,970,154) (3,957,672) Unearned premium at the beginning of the year 3,957,672 2,906,413 Unexpired risk at end of year (59,903) (50,000) Unexpired risk at beginning of the year 50,000 50,000

11,678,698 9,742,428

8. Premium ceded to reinsurance2019 2018

FRW ‘000’ FRW ‘000’ Globus RE 699,783 590,531 Africa Reinsurance Corporation (AFRICA Re) 309,885 853,916 ZEP RE (PTA Reinsurance Corporation) 95,052 76,861 IFP&C INSURANCE 21,785 29,390 CICA Re 145,178 84,809 Kenya Reinsurance Corporation (Kenya Re) 2,028 11,939 SONARWA /COMESA 10,523 3,158 International Partner Assistance 37,301 8,655 East Africa RE (122) 26,755ERGO 1,251 2,074

ACE AM 23,181

- 8,550CHUBB 58,758 15,240RGA 982 3,602 ZURICH - 5,172GIC 10,139 -LIBERTY 615 -HDI 8,920 -Co-Insurance 6 -PICC PROPERTY 80,301 - NCA RE 191,366 9,402 BALOISE INSURANCE - 1,123

1,702,719 1,731,177

9. Gross claims paid2019 2018

FRW ‘000’ FRW ‘000’ Automobile 5,675,411 4,981,544 Fire 116,587 50,605 Guarantee 406,839 1,056,577 Third party liability 47,305 28,600 Property damages 246,159 180,728 Transport 18,934 4,585 Personal/physical injury 373 -

Medical 1,401,246 1,194,075

Others 11,228 95,288 Claims recoveries (260,900) (139,161)

7,663,181 7,452,841


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Notes to the financial statements – continued 2019 2018

10. Claims ceded to reinsurance FRW’000 FRW’000Africa Reinsurance Corporation(AFRICA Re) 751,949 930,141 ZEP RE (PTA Reinsurance Corporation) 180,713 291,157 CICA Re 40,149 303,768 Globus RE 159,901 17,631 East Africa RE 3,464 13,035 NCA RE 19,556 - KENYA RE 4,384 - RGA 10,105 50,594 GIC RE 2,888 - Coinsurers 1,650 -

Aveni RE - 300,044 1,174,760 1,906,370

2019 201811. Change in contract liabilities FRW’000 FRW’000

Change in outstanding claims (4,318,102) 264,120 Change in incurred but not reported claims - - Change in contract liabilities ceded to reinsurers 1,191,461 212,558

(3,126,641) 476,678

12. Fees and commissions income2019 2018

FRW ‘000’ FRW ‘000’ P&C Reinsurance - 1,282Globus RE 78,998 123,293Africa Reinsurance Corporation (AFRICA Re) (5,742) 142,699ZEP RE (PTA Reinsurance Corporation) 6,024 6,531 CICA RE 27,065 26,077 Kenya Reinsurance Corporation Limited (Kenya Re) - 3,582SONARWA /COMESA 491 158CHUBB 1,300 1,925NCA RE 19,754 2,821ZURICH IN - 2,466ERGO - 778RGA 76 278REASS AC AMERICAN - 641East Africa RE (40) 7,970Aveni Reinsurance Co. Limited - -

127,925 320,501


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13. Expenses of management2019

FRW’000 2018

FRW’000 Salaries and wages 1,160,605 1,111,249 Rwanda Social Security Fund contributions 58,184 55,550 Staff training expense 45,148 16,771 Staff insurance fees 91,894 85,321 Maternity contribution 3,491 1,346 Professional fees and charges 121,556 173,872 Repairs and maintenance 20,331 22,549 Rent and Utilities 7,325 248,165 Auditors remuneration - - Travel and communication costs 238,179 191,542 Directors expenses 186,714 183,043 Sitting Allowances - - Office supplies and printing 135,982 116,073 Supply of medical cards 3,000 13,937 Water and Electricity 14,386 14,217 Fuel 22,965 23,554 Vehicles insurance - - Postage fees - 25 Publicity and Marketing 62,201 58,817 Entertainment expenses 29 1,066 External services expenses 185,229 195,209 Medical smart service expenses 17,586 64,037 Other insurance costs - - Donations and bequests 9,639 18,779 Fines and penalties 104,038 17,801 Patent and district taxes 12,971 11,213 VAT irrecoverable 22,273 37,688 Banking and other financial fees 37,278 28,414 Other losses 14,830 10,590 Interests on reinsurer deposits 36,615 17,848

2,612,449 2,718,674

2019 201814. Commission expenses FRW’000 FRW’000Commission expenses paid 1,095,566 688,484 Change in deferred acquisition cost (358,506) (109,887)

737,060 578,597

15.Investment income2019 2018

FRW ‘000’ FRW ‘000’ Interest on government securities 818,109 646,350 Interest income of current accounts 41,440 20,862 Realized Foreign Exchange Profits 21,542 -

881,092 667,212


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16. Accessories income2019 2018

FRW ‘000’ FRW ‘000’ Motor 403,130 296,494 Fire 50,445 42,505 Guarantee 67,004 62,507 Medical 33,426 20,735 Other 178,375 153,139

732,380 575,378

17 (a) DEFERRED TAX MOVEMENT 2019 2018 FRW ‘000’ FRW ‘000’

At 1/1 2019 P$L charge

Closing Balance

Liability Property and equipment 160,132 89,032 249,164 160,132

249,164 160,132 Asset Tax losses - 357,632 357,632 - IFRS 16 - 15,422 15,422 -

373,054 -

17 (b) Income tax expense and effective tax reconciliation

2019 2018 FRW ‘000’ FRW ‘000’

Current tax expense - 414,619Deferred tax credit (284,023) (22,674)

(284,023) 391,945

The tax on the Company’s loss before income tax differs from the theoretical amount that would arise using the statutory income tax rate as follows:

2019 2018 FRW ‘000’ FRW ‘000’

Effective tax rate Effective tax rate Profit Before Tax: (1,474,391) 1,153,927

(30%) (442,317) 30% 346,178 Effect of disallowable expenses 7% 102,926 4% 45,767 Effect of under/overprovision in prior year 3.8% 55,368 - -

(19.3%) ( 284,023) 34.0% 391,945

2019 2018 17 (c) Tax recoverable FRW ‘000’ FRW ‘000’ As at 1 January 89,248 344,549 Charge for the year - 414,619Corporation tax payments (310,965) (669,920)WHT accrued on sitting allowances 1,414 - As 31 December (309,551) 89,248


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Notes to the financial statements – continued 18. Property and equipment

Office Office Motor Computer IFRS 16 Right of Use

Work in Total Furniture equipment Vehicle Equipment Progress FRW’000 FRW’000 FRW’000 FRW’000 FRW’000 FRW’000 FRW’000

Cost At 1 January 2018 278,990 90,972 307,891 202,541 - 122,130 1,002,524 Additions 10834 10,895 28,000 16,196 - 62,432 128,357 At 31 December 2018 289,824 101,867 335,891 218,737 - 184,562 1,130,881

At 1 January 2019 289,824 101,867 335,891 218,737 255,871 184,562 1,386,752Additions 4,841 15,377 138,500 21,134 - 23,157 203,009

294,665 117,244 474,391 239,871 255,871 207,719 1,589,761

Depreciation At 1 January 2018 132,231 50,895 172,616 167,988 - - 523,730 Charge for the year 24,739 10,998 40,819 25,376 - - 101,932 At 31 December 2018 156,970 61,893 213,435 193,364 - 625,662

At 1 January 2019 156,970 61,893 213,435 193,364 - - 625,662Charge for the year 21,405 11,176 65,239 23,254 127,935 - 249,010At 31 December 2019 178,375 73,069 278,674 216,618 127,935 - 874,672

Net book amount At 31 December 2019 116,290 44,175 195,717 23,253 127,935 207,719 715,090

At 31 December 2018 132,854 39,974 122,456 25,373 - 184,562 505,219


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Notes to the financial statements – continued 19. Intangible assets

Cost Frw”000” Frw”000” At the start of the year 71,805 71,805 At end of year 71,805 71,805

Amortisation As at 1 January 67,946 64,086 Charge for the year 1,930 3,860 At end of year 69,876 67,946

Net book value 1,929 3,859

20 Investment properties

Cost 2019 2018

FRW ‘000’ FRW ‘000’ As at 1 January 1,492,000 1,492,000 Acquisitions (Buildings) 2,652,000 - As at 31 December 4,144,000 1,492,000

Depreciation As at 1 January 186,940 124,147 Charge for the year 59,653 62,793 As at 31 December 246,593 186,940

Carrying amount at 31 December 3,897,407 1,305,060

Work in Progress relates to the cost of the software development cost for managing medical business.

21 Financial assets

Investment in Government securities

Below is breakdown of the ageing of the Held to Maturity investments 2019 2018

FRW’000 FRW’000Current -Treasury Bills (Matures within one year) - 948,132Non-current -Treasury Bonds (Above one Year). 3,050,100 3,469,800

3,050,100 4,417,932Investment in government securities are subsequently measured at amortised cost using the Effective Interest Rate (EIR), less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees that are an integral part of the EIR. The amortisation is included in ‘Interest and similar income’ in profit or loss. The losses arising from impairment of such investments are recognised in profit or loss under the ‘Impairment loss on financial assets line. The instruments are not listed or actively traded and their fair values approximate their carrying values.


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22 Investment in unquoted securities

Investment in unquoted securities 2019 2018 FRW ‘000’ FRW ‘000’

Investment in Nord Sud Investment Trust Ltd 250,000 250,000 Investment in Regional Potatoes Trading (RPT) 60,000 60,000 Investment in Copedu 541,250 136,500

851,250 446,5002019 2018

23. Premiums receivables FRW’000 FRW’000Policyholders 229,986 814,726 Government & NGOs 73,491 Provisions for bad debts - (147,873)

303,477 666,8522019 2018

24.Other receivables FRW’000 FRW’000 Deposit and Guarantee 77,686 518,379 Prepayments 25,958 38,825 Other receivables 150,027 84,675 Withholding tax receivable 115,829 103,020 VAT recoverable 69,978 30,652

439,479 775,551 25.Deferred Acquisition Costs 2019 2018

FRW ‘000’ FRW ‘000’ At start of year - - Net movements in the year 358,506 109,887 At end of year 358,506 109,887 26.Receivables arising out of reinsurancearrangements

2019 2018 FRW ‘000’ FRW ‘000’

GLOBUS Re 475,900 (26,378) ZEP Re (PTA Reinsurance Corporation) 444,106 334,344 Africa Reinsurance Corporation (AFRICA Re) 1,115,357 1,967,097 CICA Re 75,805 71,044 East Africa Re - - Reassurance RGA 51,507 41,402 Reassurance Claim AVENI RE 115,733 300,044 REASS SINISTRE NCA RE 23,306 - REASS SINISTRE GIC 2,888 - REASS SINISTRE KENYA RE 1,201,798 - Compte Courant Reass Facultative - - Subtotal 3,506,400 2,984,708Reinsurance share of technical provisions 684,654 523,750

4,191,054 3,508,458 27.Receivables arising out of Co-insurancearrangementsReceivables arising out of Co-insurancearrangements. 1,651 -

1,651 -


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28.Cash and cash equivalents FRW’000 FRW’000Cash in hand 12,621 24,327 Bank balances 1,729,135 1,389,242

1,741,756 1,413,569

29.Short term deposits2019 2018

FRW ‘000’ FRW ‘000’ BK - - Cogebanque 150,000 201,000 Copedu 100,000 150,000 Unguka 100,000 100,000 BPR Muhima - 50,000 BPR KIGALI - 450,000 ATLANTIS - - Amasezerano Cb 100,239 - Letshego - - Bpr Kora - - URWEGO - - BPR Femme 100,000 - Bank Of Africa - - Umutanguha 150,000 - BPR Nyamirambo 100,000 - BPR Kabuye - - DUTERIMBERE 100,000 100,000 BANQUAXON 100,000 50,000 PBR KIMIRONKO 200,000 100,000 Letshego Holdings Plc - 100,000 Accrued interest 388,366 31,565

1,588,605 1,081,565

30.Share capital authorized sharecapital Number 2019 2018Ordinary shares of FRW 1,000 of shares FRW’000 FRW’000

On issue at 1 January 3,000,000 3,000,000 3,000,000

Issued during the year 1,000,000 1,000,000 1,000,000 As at 31 December 4,000,000 4,000,000 4,000,000

Share Par Value Details:

No Share Group Par Value Per Share Number of Shares Share Capital

1 Ordinary Share 1000 4000000 4000000000


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Notes to the financial statements – continued Founding Shareholders Details:

No MAJOR SHAREHOLDERS Share group

Number of Shares Share Capital

% SHAREHOLDING

1 Berthe KITENGE Ordinary Share 1200000 1200000000 30%

2 Yusuuf MUDAHERANWA Ordinary Share 1000000 1000000000 25%

3 Faustin KASHUGERA Ordinary Share 400000 400000000 10%

4 Valens RURANGWA Ordinary Share 400000 400000000 10%

5 Martin HIGIRO Ordinary Share 400000 400000000 10%

6 Ruth MUKANTABANA Ordinary Share 200000 200000000 5%

7 Edouard RUTERANA Ordinary Share 200000 200000000 5%

8 Phoebe MUKAMUGWIZA Ordinary Share 100000 100000000 2.50%

9 Jean Baptiste GASANGWA Ordinary Share 100000 100000000 2.50%

TOTAL 4000000000 100%

31. Retained earnings 2019 2018FRW’000 FRW’000

As at 1 January 1,084,718 1,322,736 (Loss)/profit for the year (1,190,3680 761,982 Share conversion - (1,000,000)As at 31 December 2019 (105,650) 1,084,718

Retained earnings record profit or loss for each year.

32.Lease liability 2019 2018 FRW’000 FRW’000

At 1 January - - Transitional IFRS 16 adjustment 255,870 - Interest Expense 11,119 - Payments during the year 190,462 - Year ended 31 December Lease liability (*) 76,528 -

*The lease liability results from the adoption and implementation the IFRS Standard 16 on leases inthis Financial year

33. Insurance contracts liabilities 2019 2018FRW’000 FRW’000

Provision for Outstanding claims 2,059,753 1,669,532

Unearned premium reserve 4,604,808 4,579,375

Claims incurred but not reported provision (IBNR) 4,269,113 341,233

Unexpired risk 70,131 50,000

11,003,805 6,640,140


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Notes to the financial statements – continued The amount of IBNR (incurred but not reported claims reserve) as at 31 December 2019 increased from FRW 341.233 million in 2018 to FRW 4.269 billion. Based on drafts of legal and regulatory instruments that were to be adopted in 2018 or 2019 with regard to compensation of bodily injuries, the outstanding claims reserving was based on assumptions that the minimum wage of FRW 1,400 per day and the number of 22 working days per month as established by the draft ministerial order of the Minister of Labour would be implemented in the settlement of bodily injury claims in 2019, but that did not happen until end of 2019.

There was also a draft presidential order pending in the Ministry of Finance on compensation for personal injury due to accidents caused by motor vehicles that proposed that compensation should be calculated based on annual non-taxable income/wage (currently FRW 360,000 per year or FRW 30,000 per month) which was expected to be adopted by competent authorities and gazette, but in vain.

Therefore, Management took the decision to assess the company’s outstanding claims liabilities based on actual ultimate amount of claims to be paid in future based on the precedent of the Supreme Court fixing a minimum amount of 90,000 FRW/month for compensation of bodily injuries.

Reinsurance Gross share Net

Provision for unearned premium FRW’000 FRW’000 FRW’000 2019 At start of year 4,579,375 (671,702) 3,907,673 Increase in the year 25,433 (12,952) 12,481 At end of year 4,604,808 (684,654) 3,920,154

2018 At start of year 3,149,310 (292,897) 2,856,413 Increase in the year 1,430,065 (378,805) 1,051,260 At end of year 4,579,375 (671,702) 3,907,673

2019 201834.Other payables FRW’000 FRW’000 RSSB 14,494 14,288 Fund guarantee 39,459 33,895 Other payables 177,429 315,399 Deposit for guarantee 817,546 356,816 VAT payable 128,427 135,089 Withholding Tax payable 17,003 2,623 PAYE 49,485 91,048 Commission payable to brokers (7,903) 19,039 Community Based Health Insurance (Mutuelle de Santé) 137,067 123,448

1,373,007 1,091,645


65


35.Payables arising out of reinsurance arrangements FRW’000 FRW’000 ZEP RE (PTA Reinsurance Corporation) - 282,066Africa Reinsurance Corporation (AFRICA Re) 426,548 422,813CICA Re 78,873 79,758 Kenya Re - - East Africa Re 22,481 15,409 Globus Re 593,126 300,612 Current Account Kenya Re 2,028 7,104 Current Account Prime RGA - 3,602 Current Account NCA RE 38,133 5,595 Current Account Prime RGA 4,584 - Disaster East Africa Re 6,847 -

1,172,619 1,116,959

36. Payables arising out of co-insurance arrangements 2019 2018 FRW’000 FRW’000

SONARWA COMPTE DEBITEUR PRIMES 2,900 - PRIME COMPTE DEBITEUR 2,894 -

5,799 -

37.Related party transactions 2019 2018 Key management compensation FRW’000 FRW’000Senior management costs 327,762 274,144 Director’s remuneration 139,283 139,283 Sitting Allowances 47,428 43,758

38. Grant 2019 2018FRW’000 FRW’000

Grant 74,268 78,670

The grants relate to unutilised balances received from Access to Finance Rwanda (AFR) to enabling Digital insurance take off by designing and rolling out innovative insurance products for low income earners across Rwanda that leverage mobile channels to reach greater scale. The movement of Frw 4.4 Million relates to expenses incurred in the year while the company was rolling out innovative insurance products for low income earners across Rwanda.


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39. Subsequent events

On March 11, 2020, the World Health Organisation declared the Coronavirus (COVID-19) outbreak to bea pandemic. The pandemic is an unprecedented challenge for humanity and for the economy globally,and at the date of finalization of the financial statements, its effects are subject to significant levels ofuncertainty. From the initial directors’ assessment, the directors believe the company may not beimpacted significantly. The impact of the COVID-19 will however be closely monitored and assessed ona continuous basis. The Company has undertaken a variety of measures and implemented contingencyplans to mitigate the negative impact of the COVID-19 pandemic. The Directors believe that the disruption will be temporary.

In light of the above, the directors have re-assessed the appropriateness of the use of the going concernassumption in the preparation of these financial statements. Based on the assessment performed, thedirectors are of the view that the significant doubt associated with the current uncertainties related tothe COVID-19 virus currently does not result in a material uncertainty related to such events or conditionsthat may cast significant doubt on the Company’s ability to continue as a going concern.


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Notes to the financial statements – continued Required Solvency Margin Frw"000"1 Gross Premium less reinsurance ceded last preceding year 9,062,510

2 Solvency Margin Required:20% of I.1. or Frw 500 million whichever is greater 1,812,502 Compliance with Solvency Margin

3 Total Assets 17,849,533 4 Less: Non-Admitted Assets as per II.A.7 4,067,081 5 Less: Deductions for assets subject to maximum admissible % as per II.B.7 1,775,170 6 Admitted Assets I.3 less I.4 and I.5 12,007,283 7 Less Admitted Liabilities as per III.C.3 15,055,563 8 Solvency Margin Available (I.6 less I.7) (3,048,280) 9 Excess of solvency required (I.8 less I.2) (4,860,782) 10 Solvency Coverage Ratio (I.8 divided by I.2) (168.18%)

II.A. Non Admitted Assets

1 Intangible Assets 209,648 2 Exposure(Loans and Investment) to connected persons 1,928,413 3 Loans to Insurance Intermediaries overdue for more than 6 months - 4 Receivables from reinsurers overdue for more than 6 months 1,286,405 5 Loans and other receivables overdue for more than 6 months 258,150 6 Deferred expenses, deferred taxes and prepayments 384,464 7 Non Admitted Assets (Add II.A.1. to 6) 4,067,081


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II.B. Deductions for Assets Subject to MaximumAdmissible Percentage

1 Investment in equities: listed 0 90% 0 2 Investment in equities: Unlisted 851,250 70% 255,375 3 Investment in debt securities 0 70% 0 4 Investments in properties 1,903,512 80% 380,702

5 Receivables from reinsurers which are non overdue 2,904,649 90% 290,465

6 a) All other Assets (Total assets less II.A.7 and II.B.1,2,3,4and 5) 8,123,042 Less Cash 2,130,122 Deposit Balances 1,200,239 Government Securities 3,050,100 Government Receivables(Which is below 6 Months) 45,326 b) All other assets subject to maximum % 1,697,255 50% 848,627

7 Total Deductions (add II.B.1,2,3,4,5 and 6) 1,775,170

III.C. Admitted Liabilities

1 Technical Provisions

Amount on Balance sheet A

Additional Percentage factor B

Admitted Liabilities ( A +( Ax B))

Unearned Premium 4,604,808 10% 5,065,289

Unexpired Risk 70,131 10% 77,144

Outstanding claims 2,059,753 10% 2,265,728

IBNR(Incured but not reportrd) 4,269,113 10% 4,696,024

2 All other liabilities (Total Liabilities less technical provisions) 2,951,378 0% 2,951,378

3 Total Admitted Liabilities 15,055,563


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Annex 2 DETAILED REVENUE ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2019

CLASS OF INSURANCE

ACCIDENT&HEALTH PROPERTY ENGINEERING GUARANTEE MOTOR TRANSPORT MEDICAL LIABILITY AGLICURTURE INGOBOKA TRAVEL TOTAL

GROSS PREMIUMS 217,260,452 782,002,393 435,534,599 755,742,881 6,427,854,958 144,148,390 2,648,519,890 171,027,453 105,235,705 1,091,400 12,465,330 11,700,883,451 UNEARNED PREMIUMS /OPENING 226,586,847 377,878,236 361,274,264 388,614,130 1,944,655,805 32,412,264 1,131,614,914 121,389,857 44,949,027 - - 4,629,375,344

UNEARNED PREMIUMS /CLOSING 95,371,815 363,513,888 257,821,831 201,331,827 2,151,134,712 31,033,643 1,397,672,594 130,734,892 39,287,899 - 7,035,900 4,674,939,000

REINS.PORTION IN UNEARNED PREMIUMS /OPENING 128,349,391 129,882,655 264,497,460 94,891,753 - - - 9,133,050 44,949,020 671,703,329

REINS.PORTION IN UNEARNED PREMIUMS /CLOSING 6,413,091 135,298,594 210,922,004 78,291,018 238,559,295 - - 25,111,691 - - 486,307 695,082,000

GROSS EARNED INSURANCE PREMIUMS 226,539,183 801,782,680 485,411,577 926,424,449 6,459,935,346 145,527,012 2,382,462,209 177,661,059 65,947,813 1,091,400 5,915,737 11,678,698,466

OUTWARDS REINSURANCE 4,153,102 - 198,115,824 - 261,443,215 - 215,197,019 - 714,895,540 - 18,234,771- 103,736,903 - 79,658,944 - 68,580,939 - 982,260 - 37,720,520- 1,702,719,037 - NET EARNED

PREMIUMS 222,386,081 603,666,856 223,968,362 711,227,430 5,745,039,806 127,292,241 2,278,725,306 98,002,115 2,633,126 - 109,140 31,804,783- 9,975,979,429 FEES AND

COMMISSION INCOME 1,156,461 19,288,441 41,415,178 64,198,645 490,699 - - 1,300,250 - 75,792 - 127,925,466

NET INCOME 223,542,542 622,955,297 265,383,540 775,426,075 5,745,530,505 127,292,241 2,278,725,306 99,302,365 2,633,126 - 184,932 31,804,783- 10,103,904,895

NET CLAIMS PAID 372,533 - 52,020,751 - 93,814,745- 257,199,621 - 4,613,623,164 - 18,934,333- 1,401,245,781 - 47,304,644 - 2,782,280 - 1,122,800 - - 6,488,420,652 - CHANGE IN CONTRACT LIABILITIES 44,373,837 2,258,587 - 82,792,810 144,838,858 - 3,152,876,149 - 12,350,351 47,726,609 - 93,503,153 11,961,000 - - - 3,126,641,052 -

NET CLAIMS INCUR 44,001,304 54,279,338 - 11,021,935- 402,038,479 - 7,766,499,313 - 6,583,982 - 1,448,972,390 - 46,198,509 14,743,280 - 1,122,800 - - 9,615,061,704 - ACQUISITION

COST 23,876,447 - 56,772,360 - 36,503,272- 67,711,637 - 444,102,109 - 9,975,034 - 78,274,177 - 11,103,905 - 8,303,843 - 73,167 - 363,985 - 737,059,936 -

EXPENSES OF MANAGEMENT 80,342,743 - 191,035,417 - 122,831,212 - 227,845,396 - 1,584,146,357 - 33,565,362- 616,498,273 - 37,363,942 - 27,941,910 - 246,201 - 1,224,787 - 2,923,041,600 -

TOTAL EXPENSES 104,219,190 - 247,807,776 - 159,334,484 - 295,557,032 - 2,028,248,466 - 43,540,396- 694,772,450 - 48,467,847 - 36,245,753 - 319,368 - 1,588,772 - 3,660,101,536 - -

UNDERWRITING PROFIT 163,324,656 320,868,183 95,027,120 77,830,564 4,049,217,274 - 77,167,862 134,980,467 97,033,027 53,622,158 - 1,257,236 - 33,393,555- 3,171,258,344 -


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COMMISSIONS PAID to AGENT

Name 2019 2018 FRW”000” FRW”000”

Akimanimpaye Seraphine - 100 Assimwe Onesmas 1,180 910 Batamuliza Margueritte - 2,443 Batsinda Alphonse 1,183 270 Beco Ltd 19,708 16,314 Benimana Marie Louise 34,718 375 Bizimana Alpreed - 311 Cyiza Clementine 1,021 1,173 Dusabe Ange Anita 1,986 854 Eric /Ruhango - 124 Ganishuri Mukamazimpaka Pacifique 1,909 295 Giraneza Better Trusted Ltd 6,983 2,616 Habimana Theoneste 2,657 604 Habineza Serge 3,509 378 Hahirwuwizera Joseph - 25 Hahirwuwizeye Joseph - 130 Hategekimana Felecien 1,402 728 Ihirwe Charlotte - 2,460 Impundu Arlene - 64 Ingabire Florentine - 2,109 Ingabire Immaculee - 80 Iradukunda Mugunga Sabine - 29 Ishimwe Mutumwinka Sandrine 3,394 3,424 Kagenzi Jackson - 9 Kamana Theophile 56,985 26,078 Katamara Abuyi - 189 Kayibanda Nkiko Jules 1,157 176 Kayitasirwa Fides 13,748 11,521 Kayumba Umugiraneza Louise - 218 Kmc Urugwiro Ltd - 12,114 Kwizera Diane 1,369 127 La Bonne Source - 1,292 Laidou Investment Group Ltd - 763 Maniraguha Esron 21,764 22,253 Manirasabwa Achel 4,261 3,991 Manishimwe Shalom - 37 Mbashimirimana Oscar - 1,357 Mugabo Simeon 14,134 26,809 Mugeni Olive 1,153 172 Muhongayire Laurence 45,132 18,886 Mujawamariya Adelphine - 1,220 Mukamaana Princesse - 10,460 Mukamana Vestine 18,435 13,818 Mukamurigo Donatha - 16 Mukamusonera Marie Claire - 270 Mukandera Esperemce 15,086 10,823 Mukangenzi Consolee 1,221 455 Mukasekuru Claire 24,213 388 Mukashema Catherine - 8,362 Mumporeze Clarisse 1,638 1,780


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Munyakayanza Christophe 6,727 756 Munyantore Anny Chantal - 564 Munyensanga Philbert 9,142 4,754 Munyurwa Cyrille - 10,399 Mushimiyimana Eline 7,379 3,081 Mushinzimana Joseph 8,641 7,823 Mutambarungu Diane 1,338 285 Muteteri Sarah 12,720 4,776 Mwongereza Denise - 91 Mwumvaneza Emmanuel 5,079 5,826 Nayituriki Jean Pierre 2,153 2,045 Ndayisaba Herman 2,458 6,194 Ndayisabye Boaz 6,037 2,845 Niragire Jeremie 3,708 3,457 Niyibizi Wenceslas 25,788 22,678 Niyitegeka Claudine 2,753 1,317 Niyonizeye Josiane 1,562 931 Niyonsaba Fulgence 5,616 1,565 Nizeyimana Emmanuel 23,251 16,730 Nkuranga Philbert 5,673 6,534 Nkusi Ildephonse 10,110 8,186 Nsabimana Samuel 3,358 1,302 Nshimyumuremyi Vedaste - 31 Ntakirutimana Beth - 42 Ntakirutimana Betty - 94 Nyirabaruta Claudine 29,099 26,044 Nyirabizeyimana Mucyo Marthe 2,728 764 Nyirakanyana Rachel - 28 Nyiramagaju Hyacenthe - 5,202 Nyirandikubwimana Alphonsine 13,223 8,577 Nyiraneza Joyce 5,566 5,797 Nyirarukundo Gertrude 1,586 2,169 Nzayisenga Jean Damascene 1,323 381 Nzeyimana Valens 21,267 18,636 Reliable Insurance Agent Ltd 26,757 42,073 Rubanzabigwi Emmanuel - 977 Rwagapfizi Jabo - 6,249 Sebagabo Francois 1,117 670 Shumbusho Anne Marie - 59 Shumbusho Jean Pierre 42,404 32,202 Sibomana Jacques 15,503 6,560 Uguweneza Titien - 243 Umuhoza Vestine 1,048 94 Umukobwa Bellancille 15,809 15,197 Umwali Alice 26,427 29,447 Umwali Elisabeth 1,189 749 Uwababyeyi Lea 12,126 10,295 Uwamariya Deliphine 12,883 10,528 Uwamariya Marie - 624 Uwambayikirezi Joselyne - 32 Uwera Apophia 2,076 526 Uwimana Annonciata - 1,065 Uwimana Christine 2,071 1,578


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Uwizeye Dominique 43,774 39,422 Uwumukiza Valentine 7,631 6,905 Uzayisaba Alexis - 244 Zitoni Remy - 172 3P&P Initiative Ltd 10,122 7,704 Afrika Risk - 670 Alliance Insurance Brokers 48,333 4,152 Alpha Insurance Brokers 1,492 1,211 Ascoma Rwanda 895 16,459 Brd Insurance Brokerage 1,326 15,085 Cibs - 422 Connect Insurance Brokerage Service 1,191 1,079 Cuzo Insurance Brokers 3,602 13,582 Ebenezere Insurance Brokers 1,266 12,327 Elephant Insurance Brokers 989 66 Global Risk 2,268 2,458 Internat Alert - 953 Kigali Trust Brokers Ltd 868 903 Kmc Urugwiro - 4,344 Liaison Rwanda - 25 Safe Insurance Broker Ltd - 1,332 Staple Brokerage Ltd - 9,934 Union Insurance Brokers 2,628 564 AMINA Rose 1,118 - BAGANIRORA Francois 867 - bangirana j.baptiste 2,409 - MBARUSHIMANA Oscar 3,737 - BIZIMANA Didas 995 - BUCYIBARUTA Fulgence 1,121 - DUSABIMANA MARIE Chantal 1,771 - GASANA JEAN BOSCO 871 - GATABAZI Venuste 850 - HABIMANA FELICIEN 2,503 - HAGENIMANA Cecile 849 - HAKORIMANA Francois 8,123 - hishamunda felicien 889 - HISHAMUNDA Pierre Celestin 900 - MBABAZI Meuble 10,995 - MINANI Ferdinand 3,596 - MUKAGASANA Vestine 1,280 - NDATSIKIRA Gerard 951 - NDAYAMBAJE JEAN Damascene 2,341 - NGENDAHAYO Alex 884 - NIKUZE M.Claire 2,462 - NIYIGENE Fabrice 874 - NKUNDAKWIZERA Pierre Celestin 1,005 - NSANZABERA Vincent 932 - NSENGIYUMVA Placide 1,850 - NYABUTSTSI Edouard 869 - RUGAGI Ismael 1,922 - SIMASE&P COMPANY 6,253 - AGNES COMPANY 1,680 - HABAKURAMA J.PIERRE 1,986 -


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HABIMANA Innocent 4,233 - KAYIRANGWA Josiane 2,542 - KIREZI Joseph 28,800 - KWIZWRA RENE Emmanuel 27,478 - RAIDU INVESTMENT GROUP 1,525 - MUKANKWIRO Josephine 15,756 - MUKARUMONGI Priscille 5,329 - MUKESHIMANA Catheline 12,194 - MUKESHARUREMA Geralidine 1,480 - MUTONI Sheila 2,036 - MUTSINDANTAMBARA Epa 18,583 - NKULIYINGOMA Mathias 31,094 - NSENGUWERA Jpierre 6,845 - NYIRANTEZIMANA Vestine 1,150 - SHYAKA Innocent 1,554 - TWAHIRWA Protogene 1,136 - USABIMANA William 8,773 - UWAYEZU Valence 1,898 - UWIZEYIMANA Theogene 20,945 - FALCON INS.BROKERS 24,456 - GLOBAL HEALTHCARE NETWORK 1,437 - ZAMARA 5,412 - Defered Acquistion Cost 2019 (358,506) (109,887)

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