The sluggish digitisation process at the Insurance Fund Administration Agency has resulted in a scarcity of vehicle insurance policies against third-party risks. Insurance companies have now run out of stock and are not serving customers seeking to buy policy coverage for risks that occur to third parties by an insured individual.

Initially planned to be launched at the beginning of November, the digitisation project was aimed at enabling insurance companies to work on a web-based system while selling policies. The Agency decided to take the service online, hoping to manage data and information using a centralised system. During the digitisation process, the Agency significantly cut the number of stickers and corresponding certificates of insurance it issues to insurance companies.

"We're almost getting no stickers or certificates," said a senior executive at one of the oldest insurance firms who requested anonymity. “We've collected the stickers from the regional states since we’ve run out of stock. Now, we've finished all of them and stopped providing the service."

A proclamation that was issued seven years ago criminalised driving cars without third-party insurance. Anyone who offends the law is subjected to a fine between 3,000 Br to 5,000 Br or imprisonment from one year to two years. A certificate of insurance is valid for one year from the date of issuance. And whenever a vehicle gets a new owner, the Agency requires the buyer to purchase a new policy.

Under a third-party insurance policy, an insurer pays compensation and the cost of emergency medical treatment to any third party for death, bodily injury or damage to property caused by the vehicle of an insured person.

The Agency also fully covers the medical expenses of individuals who suffered from road traffic accidents caused by uninsured and unknown drivers. Last year, it spent 13.6 million Br for medical treatment provided by 158 health centres to 27,730 people.

The delay in digitisation has occurred due to issues in getting the server on time, according to Shimelis Tamirat, deputy director at the Agency, which has distributed 777,617 insurance certificates in the last fiscal year. During the year, the Agency covered 1.5 million Br for accidents involving 44 people under the third-party insurance policy, while insurance companies paid 448.1 million Br for accidents involving 3,454 individuals and 16,235 vehicles.

The Agency has been negotiating with Ethio telecom to rent a server. And it is on the final stage to ink a rental deal with the company with an annual fee of 65,324 Br.

"We're waiting until Ethio telecom finalises the security checks," he told Fortune. "A two-week pilot test will follow before fully operationalising the system."

Upon being functional, the web-based system will enable the Agency to remotely detect who bought an insurance policy, from which insurance firm and specific branch, and how many policies each insurance firm has sold.