The insurance industry scrambles to acquire core insurance systems following a demand placed by the regulatory authorities that financial institutions fully automate their business operations.

The National Bank of Ethiopia (NBE) recently issued a compelling directive for banks, insurance firms and microfinance institutions (MFIs) to implement an automated financial management solution. Becoming enforceable this month, the directive outlines general information technology management requirements for financial institutions the national bank regulates.

The national bank has granted insurance firms two years to complete the transition. Acquiring a system requires buying the hardware and establishing a system environment, including a robust database.

Ethio-Life & General Insurance is about to complete the migration to automated services, signing a deal to acquire a financial system from an international supplier. The US-based Beyontec developed the firm's system for 30 million Br, selected from a pool of five global system providers. Infusion, 3i-Infotech, Informatics International Ltd, and ASSECO Poland were the other contenders.

Capitalised with 200 million Br, Ethio-Life is Beyontec’s first client in Ethiopia. It has been providing services manually since it began operations in 2008 as one of the second-generation insurance firms. Its executives plan to implement the system in 10 selected branches and grow to include all the 28 branches in four months, according to Dagimawi Hailu, the project consultant at Ethio-Life.

The automated system allows all the departments to link one another and process workflows in real-time.

“We'll be able to integrate all our branches, clients, authority [central bank], and re-insurers,” Dagmawi told Fortune.

Ethio-Life, owned by 1,300 shareholders, provides life and general insurance policies to 3,000 clients. The insurer has 1,300 shareholders.

Its executives expect the automated system to create ease for customers, allowing them simple access to information on premiums and policy renewal. Clients will also be able to make claim requests by logging into the system and following up on the process remotely, receiving updates through text messaging, according to Nebiyu Ephrem, IT department manager.

The banking industry has already transitioned into automated service provision, with all banks having adopted core banking technologies. A few insurers, such as Awash, United, Nib and Africa, have acquired core systems. United Insurance, an industry veteran incorporated in 1994, is the first to implement a core insurance system. It bought its first system, dubbed PREMIA, over a decade ago.

United is working on upgrading the existing system, according to Aliye Mohammed, IT manager.

"There's no question of its importance," said Aliye.