Commentaries | Sep 03,2022
Nov 5 , 2022
By AKSAH ITALO ( FORTUNE STAFF WRITER )
The National Insurance Company of Ethiopia (NICE) has its executives determined to acquire CORE insurance solutions, a quarter of a century after it was incorporated in the mid-1990s.
The insurance industry has been scrambling to acquire CORE insurance solutions following a directive by the National Bank of Ethiopia (NBE) issued six months ago. It compels insurers to automate their services within two years. They will face suspension after two years of extension and a 10,000 monthly penalty if they fail to comply.
The regulators are pressuring insurance companies to be competitive, anticipating foreign insurance companies entering the Ethiopian market in the next two years, according to Assegid Gebremedhen works as an insurance consultant after a two-decade debut in the industry serving as Deputy CEO of NICE and Global Insurance.
“Insurance companies have to be competitive,” said Assegid.
CORE solutions increase the efficiency of companies. However, Assegid doubts the solution can be reliable for international software vendors who would not provide follow-ups and technical support.
Over 10 technology firms have responded until last week to its public announcement to build an automated insurance management system.
3i Infotech, a global Information Technology company headquartered in Mumbai, India, is among the companies that showed interest. It provides technology solutions, including IT services, application software development and maintenance payment solutions to over 1,500 customers in over 50 countries. Africa Insurance Company (AIC) is one of its customers in Ethiopia, recently upgrading to PREMIA Version 11 software solution.
Astar Technologies, an IT company in Vadodara, India, is vying to provide the solution. The company has been in business for over two decades supplying products to companies in India and Australia.
“We primarily focus on technological compatibility,” said Gizeaddis Balemual, manager for strategy development.
A committee comprising directors, the Chief Executive Officer (CEO) and senior management staff is formed to oversee the procurement process. With the bid evaluation process taking three weeks, the company expects to complete deploying the core solution within a year.
Incorporated in 1994, NICE provides life and non-life insurance policies, with 40 branches in the capital and four in regional states.
With a paid-up capital reaching 176 million Br, it underwrote gross premiums from over 92,000 customers, mobilising nearly 388 million Br, 20pc higher than the previous year.
“We aspire to generate one billion Birr in the next five years,” said Gizeaddis.
Regulators at the central bank raised capital requirements for the industry by six-fold a month ago, leaving insurers to raise capital in five years to meet the minimum capital threshold of half a billion Birr. National Insurance is also required to invest 15pc of its annual net income in bonds with three years maturity period.
With the automation, NICE executives want to see clients access information on their premiums, make policy renewals and issue claim requests remotely, according to the IT Director, Tariku Gebrehabt.
NICE was the first insurance firm to implement the CORE system after striking a deal with a Nigeria-based technology firm. Tariku said that the absence of domestic technology providers and access to foreign currency to procure and upgrade systems had been a significant setback.
NICE is not the only insurance firm jumping into the buying frenzy. Incorporated in 2013, the youngest Bunna Insurance struck a deal with Amity Software Technology, an Indian-based technology firm, to acquire a CORE solution two months ago. Its peer Zemen Insurance, floated a bid two months ago to select a system provider and network its 17 branches.
About 10 insurance firms had transitioned to automated service provision. Awash Insurance, highly capitalised in the industry, brought the Indian-based Infusion Software Development Plc on board eight years ago to deploy its system. Another industry veteran, Nile Insurance, launched its automated financial management solution a decade ago.
PUBLISHED ON Nov 05,2022 [ VOL 23 , NO 1175]
Commentaries | Sep 03,2022
Sponsored Contents | Jul 24,2022
Radar | Nov 27,2023
Radar | Jan 19,2024
Fortune News | Sep 03,2022
Radar | Oct 31,2022
View From Arada | Feb 10,2024
Fortune News | May 27,2023
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