Fortune News | Dec 05,2020
Awash Insurance is gearing up to become the second firm to introduce a cellphone insurance policy. The 25-year old firm sent its proposal, along with a feasibility study, for approval to the National Bank of Ethiopia (NBE) last month.
A part of the general insurance lines of business, the policy will provide coverage for any damage to smartphones registered by Ethio telecom. The firm's executives expect it to generate an additional nine million Birr in yearly premiums.
Awash Insurance, which registered 210 million Br in profits last year, began the market study a year ago but faced difficulties due to the novelty of the idea.
Last year, the global mobile phone insurance market was valued at 27.2 billion dollars, with a predicted annual growth of 10pc, according to IMARC Group, a global market research company.
Nyala Insurance pioneered the cell phone insurance policy earlier this year, working with Ethio telecom to onboard clients, garnering 6,000 policyholders thus far.
The leader among private insurers with gross written premiums of over one billion Birr, Awash Insurance has yet to decide how much the policy will cost, disclosed Gudissa Legesse, chief executive officer (CEO).
"It'll be based on the type of cellphones," said Gudissa.
There are over 56 million mobile subscribers in Ethiopia. About 10 million are smartphones, with over two-thirds of the devices utilising the Android operating system. For Ebsa Mohammed, a consultant in the insurance industry, this might be a good opportunity for the cellphone insurance market to thrive. But he fears this would be undermined by the dominance of smuggled phones in the market.
"Lack of registration makes it difficult to identify their owners," said Ebsa.
Awash Insurance has partnered with Ethio telecom in targeting potential customers between 20 and 30 years of age.
Ethio telecom had started registering phones four years ago, with its executives aiming to prevent smuggling and encourage local assemblers. It was, however, lifted the same year, though it helped local assemblers gain ground in the mobile market. According to the Association of Mobile Assemblers, more than 90pc of the smartphone market is dominated by smuggled phones.
Awash Insurance plans to charge premiums paid in airtime, through the firm's mobile application, or in cash. Policyholders will be expected to pay between one Birr and 1.5 Br a day, similar to what Nyala Insurance charges.
"It'll be simple," said Gudissa, adding that Awash has no plans to involve a reinsurer in the scheme.
The firm currently offers over 30 products in both the general and life policies.
Nyala pays between 5,000 Br and 15,000 Br in claims to policyholders of cellphone insurance, while Awash is yet to decide the maximum claim that a policyholder would receive. It, however, plans to offer a variety of policy plans, including an option for clients to pay premiums from daily to annually. It prepared its new product line in collaboration with Deloitte East Africa, serving Awash Insurance as a consultant since January this year.
Deloitte was hired to develop the insurance firm's 10-year strategic plan and performance road map.
Contributing less than one percent to the country's GDP, the insurance market is highly volatile, and firms are embroiled in cut-throat price competition.
Promotion is the key to success in the insurance market, according to Tegegne Masresha, marketing and business development manager at Nyala.
"We're investing a lot to promote our products," said the manager, revealing the success of Nyala's cellphone insurance product.
PUBLISHED ON Sep 10,2021 [ VOL 22 , NO 1115]
Fortune News | Dec 05,2020
Fortune News | Dec 25,2021
Featured | Jan 07,2022
Fortune News | Nov 27,2022
Covid-19 | Mar 29,2020
Viewpoints | Sep 07,2019
Fortune News | Apr 22,2022
Fortune News | Jun 29,2019
Jul 2 , 2022 . By RUTH TAYE
On a rainy afternoon last week, a coffee processing facility in the capital's Akaki-Qality District was abuzz with activ...
Nov 27 , 2021
Against my will, I have witnessed the most terrible defeat of reason and the most sa...
Nov 13 , 2021
Plans and reality do not always gel. They rarely do in a fast-moving world. Every act...
Oct 16 , 2021 . By HAWI DADHI
Residing in a country with no capital market, an organised marketplace for trading se...
Leaders of the National Election Board are in a charm offensive mood, of a sort. Last week, they organised a rare tour for members of the me...
When the country's most senior diplomats and envoys return back to their posts after two-week debriefings, they leave behind a point or two...
Nov 26 , 2022
In the wake of the liberalization of the telecom sector, Ethiopian authorities have m...
Nov 19 , 2022
The rounds of talks to end wars in Ethiopia held in Pretoria, South Africa, and Nairo...
Nov 12 , 2022
Two weeks have passed since negotiators from Ethiopia's federal government and the TP...
Nov 5 , 2022
Hardly were people prepared for the deals announced last week from Pretoria, South Af...
It is difficult to find a society void of stereotypes. The level and how much those p...
Or see contact page