Nyala Insurance observes the 3rd Ethiopian Insurance Brokers’ Day
Ethiopians purchase the least amount of life insurance policies in Africa.
A thematic paper presented by Yared Mola, Chief Executive of Nyala Insurance S.C. (NISCO), on Ethiopian Insurance Brokers’ Day, organized and hosted by NISCO for the 3rd time under the theme of “Breathing Life into Life: Reviving the Long-Term Insurance Business in Ethiopia”, on May10th 2017 at Sheraton Addis indicated that unlike other developed and developing nations Ethiopians consider insurance to be something purchased for material property and don’t see the other benefits of insurance.
By drawing practical data from 2015 fiscal year, Yared said that Kenya was, for example, able to generate more than USD 602 million from life insurance businesses, while Ethiopia collected only USD 13.7 million. Likewise, the share of the life insurance business in Kenya has risen about 36.2% whereas Ethiopia’s is limited to 5.5%. This implies that the life insurance business is, despite lucrative opportunities like the growing middle class, playing a less important role in the national economy, he added.
According to Yared’s thematic presentation, lack of awareness, economic and cultural barriers, dominance of the general insurance business; weak partnership among the concerned stakeholders, and inability to effectively utilize ICT (digitalization) are some of the major contributing factors for the low penetration rate of life insurance in Ethiopia.
Forty five years ago, Ethiopia had only two licensed life insurance companies; surprisingly at this time of a business boom there is no exclusive company engaged in the operation of life insurance service in the country, the CEO remarked.
Yared also underlined that all the role players and other stakeholders should join hands towards improving the penetration level of the long term insurance business in the country.
As one of the key players in the Ethiopian insurance industry, Nyala Insurance S.C. has, Yared added, committed itself to broaden the business by developing and introducing new and attractive life insurance products; by expanding service outlets, by scheduling awareness campaign programs; by improving intermediate incentives; by revising existing products to make them more appealing and affordable. To make this effort more fruitful, he emphasized the needs for regulatory support and active participation of intermediaries.
By the same token, Wubetu Workneh, President of the Association of Ethiopian Insurance Brokers, commented that the life insurance business in Ethiopia is yet unexploited and an overlooked area of business and many of the individual members of the Association do not own an individual life insurance policy.
By Acknowledging Nyala Insurance S.C. for raising and bringing such important nation-wide issues into others’ view, Wubetu expressed the readiness of the Association to work on improving the business jointly. Similarly, participants of the meeting expressed their key interest in developing the life insurance business in Ethiopia.
Finally, Nyala Insurance S.C. honored and gave recognition to best performing Insurance Brokers for the 2015/16 fiscal year.