A multimillion birr insurance coverage that will boost the life class of business embarks through a tripartite deal between financial firms.
The new scheme which is a premium financing scheme was introduced by Nib International Bank, Nib Insurance Company and Gasha Commission Agent plc and is set to provide affordable insurance coverage for public transport providers.
The initiative that was developed by Gasha and accepted by the two Nibs shall include thousands of vehicles to be included on its insurance coverage and shall also provide life insurance for the customers.
It is stated that the inclusion of the life class of business is a game changer for the insurance industry in general since the life business is very small in Ethiopia against the experience for other countries.
At the tripartite agreement and lunching ceremony held on Thursday December 9 at the head quarter of Nib International Bank, Belay Tulu, Director for Insurance Supervision Directorate at National Bank of Ethiopia (NBE), described the initiative that shall boost the life business.
Yonas Belay, Business Development and Planning Manager at Nib Insurance, told Capital that under the new scheme thousands of vehicles engaged on public transport will be included, while the premium will be covered by the bank and customers shall settle their duty at the bank every day on the platform that is established for the scheme.
He explained that the scheme would be key for financial inclusion since it includes several individuals who were not included in the insurance coverage, “we provide insurance coverage, the bank provide the finance in advance and customers who will have account at the banking are saving for their insurance coverage in every day manner, which is boosting saving.”
Yonas said that the new scheme is a game changer in the industry that is worth hundreds of millions of birr.
Zufan Abebe, President of Nib Insurance, said that the insurance company that has half a billion birr paid up capital has established a dedicate branch to manage the new coverage that shall manage thousands of customers.
Yonas explained that the insurance company has fully prepared to manage the new operation in terms of officers and office.
“We have ample capacity to serve the crowd that is expected to come under the new insurance coverage,” he added.
Abel Hailemariam, owner and CEO of Gasha, which is a financial focused company, said that his company has been engaged in detail study on how the cars, mainly public services provides to be included on the insurance coverage that is ill on the sector compared with other insurance businesses.
He said insurers are not interested to play with motor insurance particularly on vehicles with high mobility like minibus and small taxes since they are highly vulnerable to accidents which directly affects the income of insurance companies, “due to that, they impose huge amounts of rate as a premium for such vehicles that is unaffordable and discouraging for car owners.”
“Besides that as per the business experience in the country to be insured clients have to pay yearly insurance coverage and besides that according to the NBE, the regulatory body, directive advance payment of premium is a must, which narrows the loophole to come up with credit alternatives on the sector,” the CEO explained.
On the new scheme Gasha is coming with the idea that the bank will settle the premium on behalf of vehicles in advance and vehicle owners shall re pay on daily basis.
“Most of the stated type of vehicles is excluded from insurance coverage except the mandatory third party insurance, while most of such kinds of cars are major source of income for drivers, owners or their family,” Abel says, adding, “but these assets that may be bought after long saving or by families for their children to support their life and at the same time economic pillars and job for many Ethiopians are endanger.”
“If any accident and damage occurred on a single car the effect is very massive for those, whose life is dependent on it, due to that insurance coverage is a must,” he elaborate showing the reason why the new scheme was introduced on car owner’s side.
On the other hand, the source of finance for the insurance coverage that will be hundreds of millions of birr shall be supported by financial firms, who are willing to be part of the idea.
According to the plan, a bank shall cover a premium of many cars for the insurer, while beneficiaries would resettle their payment on daily bases through the bank account that they opened on the bank, which paid for their premium in advance.
The study indicated that to cover the annual premium the maximum daily payment amount for a vehicle, which is mainly engaged on daily income, as 45 birr.
On this scheme Nib Bank shall easily expand the customers base, saving, other banking services. “Beyond interest earning bank customer base will be massive because of the scheme,” the study indicates.
“For insurers it can be expressed by a single word; bonanza. As per our study for instance if an insurer covers 10,000 vehicles under this scheme the premium would be 125 million birr or if the number of cars shall be 25, 000 the amount of premium is over 312 million birr,” the CEO explained.
“Insurer shall manage this with a single poll and since the poll includes huge customers their benefit also is very significant,” he added.
Gasha will benefit as a facilitator on service charges.
For vehicle owners they will be safe from any risk, and shall settle their premium in long term arrangement, “while the major benefit of car owners would be that they enable to use their assets to access finance.”
“Insurance coverage is a must to access finance from may be banks or micro finances, meanwhile at the current stage such kind of vehicle owners have neglected to make their cars as collateral because of the insurance issue,” Abel cited the current condition as he explained how the new scheme will empower them to access finance.
Nib Bank, Insurance and Gasha avail revolutionary insurance cover
African Insurance nets 51 mln birr in profit
African Insurance Company, one of the oldest insurers in the country, concludes its financial year with net profit growth; despite its total income showing slight reduction.
The annual report of the company which was formed in 1994 indicated that in the 2020/21 financial year it has amassed almost 51 million birr in net profit after tax with the increment of over five million birr compared with the preceding year.
A year ago the company earned 45.7 million birr which has now increased by almost 11.5 percent to stand at 51 million birr.
The total comprehensive income for the year stood at 51.9 million birr up from the 50.4 million birr in the 2019/20 financial year.
According to the annual report, the company’s gross profit before tax for the reported year stood at 59.4 million birr showing increase from 58 million birr, a year ago.
As of June 30, 2021, the insurance company, which is one of the strongest insurers, saw its total asset reaching 1.44 billion birr. The company which has two high rise buildings in the capital city at South Africa Avenue of Bisrate Gabriel and Africa Avenue, Japan Bole (HQ), is one of the biggest firms in terms of asset.
The report of Africa Insurance indicated that at the end of the financial year the company’s paid up capital has expanded by 24 percent to reach 224 million birr up from 180 million birr a year ago, while its total capital and reserves stood at 366 million birr.
According to the annual report the company’s total income stood at 581 million birr showing decrease from 604 million birr in the 2019/20 financial year. Similarly for the year the net claims incurred in the 2020/21 financial year has reduced by almost 13.5 percent.
Gross claims amounting to 380.5 million birr was paid during the financial year with respect to the general insurance business and 8.9 million birr for life insurance beneficiaries.
According to the annual report, the net claims paid in the 2020/21 fiscal year, show that it is 10 percent lower than the preceding year for general insurance business, and the life business payment has also dropped by 18 percent.
During the financial year, the gross written premium income stood at 602.4 million birr from both life and general insurance businesses, while the general insurance share was 584 million birr.
The annual report indicated that the total premium generated was higher than last year’s same period by almost 29 million birr or 5 percent.
In total the company expenses stood at the 513 million birr with almost six percent reduction compared with the preceding year of 544 million birr.
The reduction on net claim incurred and the total expense in general shall support the company to register profit growth though the net earned premium and investment and other incomes reduced.
For the year, the net earned premium has stood at 445 million birr with 5.9 percent reduction compared with 471 million birr of a year ago.
PEDIATRIC CARDIOLOGY
As scientific research shows, about one in every 100 children have a heart problem, which may also be called a heart defect or congenital (present from birth) heart disease. Heart defects can usually be treated with medicine, surgery, or other medical procedures.
Most tests for heart problems are simple, quick, and not painful. Most children with heart defects live a normal and full life with very few or no restrictions. However, the burden of this illness weighs heavy in Low- and Middle-income countries where access to the best professional care might not be fully attainable.
Cognizant of this, Woong-Han Kim, M.D., Ph.D., Professor from the Seoul National University Children’s Hospital, embarked on a journey several years back to help train medical professionals to help save lives of children with heart-related issues through modern and international best standards in surgical practices.
Dr.Woong-Han, who is a seasoned cardiothoracic surgeon alongside his team has been partnering with the South Korean government and recently with EKOS Steel Mill PLC to ensure that Ethiopian medical doctors obtain a wealth of much-needed experience to provide their patients with better health for years to come. Capital caught up with Dr.Woong-Han for insights on their initiative that seeks to empower medical doctors in Ethiopia. Excerpts;
Capital: Would you please introduce yourself and tell us why you are here?
Dr. Woong-han: My name is Professor Woong-han Kim. I am a medical doctor with a specialty in thoracic and cardiovascular surgery from the Seoul National University College of Medicine in South Korea. I am also a member of the JW Lee center for global medicine, chairman of the national academy of medicine of Korea, and the Korean society for thoracic and cardiovascular surgery.
We are here in Ethiopia for two related purposes; the first one being, to perform surgeries for heart-related issues for children whilst the other one is to offer training and share our experience with the medical doctors and students working on heart surgery.
We share our expertise firsthand, by allowing the medical doctors to perform the surgeries alongside us to improve their knowledge and experience on the field. Since we cannot be available all the time within the country, we do this to translate best international practices to promote better health. We have been doing this for 6 years now.
Capital: The medical industry in the country is old, and not as advanced as other first-world countries. Do you consider it difficult to perform these surgeries within the country?
Dr. Woong-han: It is not that difficult. Most of the trainers or the medical doctors we meet are ready to see new things and apply them. We are working to make an African cardiac center to increase heart treatments in the continent in order to help those who go through the struggle of going abroad to seek surgical help because of the lack of treatments here.
Capital: What are some of the challenges you have been facing in the past six years?
Dr. Woong-han: Each year when I come for a visit, there are always changes and improvements. Even if there are some challenges and difficulties, they do not outweigh the improvements. Every year the zeal, readiness, and openness of the doctors here to be trained and learn new techniques is nothing short of remarkable. We aim to produce many Ethiopian specialists who will help Ethiopia to be no longer regarded as a medically underserved country, and I think training after training, we are on track to achieve this.
Capital: Have you ever visited the Ethiopian children’s heart center?
Dr. Woong-han: I have had the pleasure of visiting the center. I have also observed that most of the medical workers do lack experience. Despite foreign volunteer surgeons coming in to provide services, they do not share their wealth of experience first-hand with the doctors. Thus, that does not fully empower the doctors here and although the volunteer work is remarkable, I believe that continuity and supporting local doctors is key for longevity in providing medical services.
So that is why I am doing this experience-sharing trend. I want to create a team of qualified Ethiopian surgeons who are capable of proving the services by themselves, which in long term is beneficial to the medical industry and the country as a whole.
Capital: What kind of support do you get from the Korean government?
Dr. Woong-han: For the first five rounds, we received all of the support and sponsorship from the Korean government. The government gives support for a maximum of 5 chances to which we have already exhausted our chances in a positive light. For this sixth edition, we have come without the support of the government having covered all our expenses. We have also partnered with some of our Korean partners here such as the EKOS steel Mill company who have helped our initiative.
We have come for our sixth round because we believe that there are still some things we can improve on. Moreover, we have follow-up progress appointments with the children who we performed surgeries on.
Capital: Do you have plans to continue with this initiative?
Dr. Woong-han: We haven’t fully decided on this yet. However, we have hope, and we will try to continue with this initiative to continually improve medical care in the country.
Capital: What does your medical team comprise of?
Dr. Woong-han: We are a team of 21, including doctors or surgeons, nurses, and other medical workers. For the past six years, we have performed 56 heart-related surgeries, and this year we have done 11 surgeries of which all of them are children under 11.
Capital: Do you follow up on the children whom you had performed these surgeries on?
Dr. Woong-han: Yes, they do come for a second check-up, and l am pleased to say that they are all in good condition after the surgery.
Chernet Wale
Name: Chernet Wale
Education: 10+2
Company name: Chere fast food and drinks
Title: Owner
Founded in: 2019
What it does: Serves different kinds of fast foods and drinks
HQ: Addis Ababa around Mexico Square
Number of employees: 1
Startup Capital: 15,000 birr
Current Capital: Growing
Reasons for starting the business: My experience
Biggest perk of ownership: Being my own boss
Biggest strength: Am not afraid to take risks
Biggest challenging: Working place (Environment)
Plan: Opening my own restaurant
First career: Chef
Most interested in meeting: PM Abiy Ahmed
Most admired person: My wife
Stress reducer: Praying
Favorite past time: Working
Favorite book: None
Favorite destination: Any place, because I love to travel
Favorite automobile: Jeep
