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Ethiopian Insurance Corporation’s risk bearing capacity jumps over 6 trillion Birr

Addis Ababa, May 21, 2024 (FBC) – The risk management capacity of the Ethiopian Insurance Corporation (EiC) has reached over 6 trillion Birr in the first nine months of the current Ethiopian fiscal year, announced the CEO of the corporation, Netsanet Lemesa.

The CEO stated that the Ethiopian Insurance Corporation has significantly bolstered its financial position by achieving a 50 percent increase in risk-bearing capacity.

The corporation has embarked on far-reaching reform activities to expand service offerings, modernize operations, and extend accessibility, he stated.

As a result of these reform activities, the EiC risk-bearing capacity has exceeded by 50 percent with 6.2 trillion Birr in the stated period.

The corporation has similarly collected 7.6 billion Birr from premium income, a 33 percent increase compared to the same period last year, he indicated.

Ethiopian Insurance Corporation paid 2.2 billion Birr in compensation and for the first time its profit hit a record more than 1.2 billion Birr before tax, according to him.

On the other hand, the CEO mentioned the bottlenecks that have been persisting in ensuring comprehensive insurance accessibility, ENA reported. Netsanet also acknowledged those challenges including a lack of public awareness, limited technological adoption, and inadequate priority on low-income populations.

Additionally, enforcing mandatory declarations and a scarcity of spare parts in the vehicle insurance market present further complications.

He emphasized the need for realizing appropriate premium adjustments that would effectively address   current risk and claims costs.

The establishment of an independent commission to regulate the insurance sector is in the pipeline which he believes can solve the problems faced by the insurance industry and to support ongoing operations.

As the EIC has been aggressively expanding its accessibility, the number of the corporation’s branches currently reached about 125 across the country.

This strategy aims to enhance accessibility and pursue a modern approach for insurance services in Ethiopia.

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