EIC’s insurance coverage peaks to a trillion birr
Addis Ababa, Ethiopia – Ethiopian Insurance Corporation (EIC), the state-owned insurance giant, expanded coverage to a record high of one trillion birr as of the end of the current fiscal year, concluded on June 30.
According to the annual report, it has netted 343.4 million birr in the last budget year and has seen a jump in the number of insurance policies sold to its customers. Wossenyeleh Eteffa, the chief executive officer (CEO) of the EIC, announced at the annual general assembly that as of the end of the budget year the company has managed to either sell or renew some 410,699 insurance policies, recording a 38.5 percent increase compared with last year’s 557.4 billion birr. This puts the overall coverage at an impressive one trillion birr, which is a first for the Ethiopian insurance industry.
The CEO noted that the basic reason behind the unprecedented expansion was the massive diversification in the insurance policies it offered to customers. As it stands, the EIC’s overall market share is 46 percent in the 15-member insurance industry, compared with 41 percent for the previous budget year.
The sole state-owned insurer also claimed almost half of the total premiums collected in the industry. This year alone, 2.2 billion birr in premiums were collected by the EIC, with the industry-wide figure at 4.65 billion birr.
Ã¢â‚¬Å“Two billion birr of the premium came from insurance policies that fall under the general insurance coverage category, and 125.8 million was collected from long-term policy categories,Ã¢â‚¬Â Wossenyeleh explained to the general assembly.
EIC’s client base is spread over three major groups, out of which 53.6 percent is private companies and individuals, 30.1 percent is State Owned Enterprises (SOE) and 16.3 percent is government agencies. However, it was not all receiving for the EIC, it also paid 631.1 million birr as compensation; some 33.4 percent higher than what was paid in the previous year. One of the recent additions to EIC’s client base is the Grand Ethiopian Renaissance Dam (GERD). According to their relative size, the highest compensation was paid to private companies and individuals, almost 69.1 percent, with the rest paid to SOEs and agencies. This all amounted to an increase in annual profit of 31.4 percent.
EIC was the first insurance company in the country, established in 1976 when they assumed control of 13 private insurance companies operating at the time of the Emperor Haile-Selassie I. The private insurers had a combined capital of 11 million birr when the new military government took power and issued a decree to nationalize them. After being the sole insurer during the time of Derg, EIC was joined by private insurers after the policy change in 1991.