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Ethiopian Life Insurance Business still suffering from the lowest Penetration Rate

Nyala Insurance S.C Observes the 3rd Ethiopian Insurance Brokers’ Day  

Addis Ababa (May 17, 2017) – The life insurance business in Ethiopia is said to be found at the lowest penetration levels compared with other African nations. 

A thematic paper presented by Yared Mola, Chief Executive of Nyala Insurance S.C (NISCO), on NISCO’s and 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 10th May 2017 at Sheraton Addis indicated that unlike other developed and developing nations many people in Ethiopia lose sleep over material property insurance than the long-term assurance.

 The 3rd NISCO’s and Ethiopia Insurance Brokers’ Day

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 life insurance business in Kenya has risen about 36.2% whereas that of Ethiopia is limited to 5.5%. This implies that the life insurance business is, despite lucrative opportunities like the growing middle class society, playing a less important role to the national economy, he added.

 Almost all the Insurance Brokers attended the 3rd NISCO’s and Ethiopian Insurance Brokers’ Day

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, inability to effectively utilize ICT(digitalization) are some of the major contributing factors for the lowest penetration rate of the life insurance business in Ethiopia.

45 years back, Ethiopia had two licensed life only 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, 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 emphasize on 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 overlooked area of business due to multiples of reasons, and to that extent, many of the individual members of the Association do not so far own 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 the Association to work on improving the business jointly. Similarly, participants of the meeting expressed their key interest to develop life insurance business in Ethiopia.

Finally, Nyala Insurance S.C honored and gave recognition to the best performing Insurance Brokers for the 2015/16 fiscal year.

 

Nyala Insurance awarded best performing insurance brokers for 2015/16 fiscal year

(Written By: Getaneh K.Assefa

 Senior Communications Officer)