EIC Falls Just Short of Set Targets
Despite falling short of annual targets, the figures illustrated a healthy increase on the previous year.
The state owned Ethiopian Insurance Corporation (EIC) has collected premiums of 2.1 billion Br, in the just ended fiscal year. This is 1.2pc lower than the planned 2.5 billion Br.
The collected premiums, however, surpassed that of the previous year by 46.3pc. according to its annual report released on Friday, August 30, 2013, during a performance evaluation meeting held at the Hilton Hotel.
Inefficiency in marketing activities and unfair market competition have been impediments in fully realising the CorporationÃ¢â‚¬â„¢s plan, according to Mesfin Abebe, deputy CEO of General Insurance within the Corporation.
The premium collected by the EIC is only 12.5pc lower than the combined gross premiums of 2.4 billion Br collected from general insurance by the 16 private insurance companies, during the 2012/13 fiscal year. This enabled the company to increase its market share to 44pc from the previous 41pc, stated the performance report.
The Corporation managed to collect all premiums in an average 67.5 days, which is lower than the 90 days set by the National Bank of Ethiopia (NBE). This is partly due to the new proclamation ratified a year ago, which forces the Corporation to collect the premiums of insurance policy sold to government agencies and institutions on credit within 90 days.
All private insurance companies in Ethiopia can no longer provide policy coverage on credit, after being notified by the central bank, in 2012, of the ratification of a new Ã¢â‚¬Ëœinsurance businessÃ¢â‚¬â„¢ proclamation. The proclamation is more well known for the provision that voids insurance policy sold either partially or wholly on credit to non-state customers.
The EIC still gets to advance credit to regional and federal government offices, for whom the proclamation makes an exception.
The EIC Ã¢â‚¬â€œ established in 1976, during the Derg regime, by the merger of 13 expropriated insurance firms Ã¢â‚¬â€œ has incurred 632.1 million Br in claims. Out of this, the majority, 69.1pc, was paid to private companies. A further 15.7pc was paid to state endowment enterprises and the remainder, 13.7pc, to government enterprises.
During the last fiscal year, the EIC invited architectural design firms to register their interest in the design of its two-billion Birr, 40-storey headquarters, to be built on a 12,000sqm plot opposite the Ambassador Theatre, along Ras Desta Damtew Street. The EIC owns 17 different buildings across the country, six of them in Addis Abeba.