Fortune News | Nov 25,2023
Mar 20 , 2021
By Asseged G. Medhin
The insurance industry has been in flux, only recently seeing past the post-traumatic syndrome of traditionalism. The sector can tap into the ongoing transformation underway in the country at large as witnessed by reforms over the past two years. They count the insurance corporate governance directive, movable property right, micro-insurance directive, intellectual property rights, lease financing, stock market, and interest-free banking and insurance in their number.
The new era in economic governance is already inspiring a great deal of confidence and enthusiasm with several new entrant banks, including Hijra, ZamZam, Gadaa and, perhaps the biggest of them all, Amhara Bank.
A secondary market would best complement such a promising beginning. It offers significant returns on investment as the market provides both short-term and long-term investments where shares are easily traded.
The country with the second-biggest population on the continent remains behind in this sphere, nonetheless. All of our health coverage packages, insurance policies and retirement plans are input for a security market, which provides optimum returns for insurers and bankers. The current initiative of establishing a stock exchange platform should come to the top of the agenda of the National Bank of Ethiopia (NBE), insurers' associations, Ethiopian Re and insurance firms if they want to fish in more abundant waters.
There is a demand for this. Customers are tired of existing processes and want to get a new, dynamic and fresh outlook and a disruptive technology that eases their lives with proper insurance services. Evidently, this is hard for insurers to provide, underlining the challenges of the sector today.
We need to investigate the types of products most conducive to the economy and develop checkpoints in terms of coverage, benefits and marketability, as well as ensuring that products have the power to retain customers for relatively long periods.
The acquisition of knowledge in risk management and providing advisory input for those in emerging risks, not to mention the capacity of mapping out risk matrices, are the other challenges. Billions of dollars given in credit by this sector sustain the momentum of the economy, and yet the skilled capital in the sector – in terms of bankers, managers, auditors and accountants – is minute. Too little focus has been given to this circumstance. Hopefully, the trend is now in the arena of transformation. We do not have time – Prime Minister Abiy Ahmed’s (PhD) macroeconomic team and the Planning & Development Commission should target this as a central piece of their agenda for the financial sector.
The momentum of globalisation, despite recent hiccups, implies that Ethiopia will no longer survive closing its financial sector to foreign investors. We have only two options: either creating huge financial institutions such as Amhara Bank and merging giants in preparation for eventually opening up or subsisting in our current state of modest financialisation that lacks innovation.
There is also the issue of technology, a very crucial and ongoing challenge facing the insurance sector. Our technologies, especially data-driven processes in managing and serving growing customer demands, are under pressure.
However, the people in whom power is vested in leading this digital transformation are not enough to traverse this challenge. The government should supply the required currency and support tax incentives for those ready to digitise traditional services. In return, insurers ought to support this effort by providing the general public with affordable prices.
The capacity of insurers in terms of dynamism will increase and electrify stakeholders, not only clients. Technology adds value to the insurance core processes. It improves customer experience with digital interactions through digitising underwriting services and the management process of claims, the latter of which is nearly the entire cost of insurers.
Unless insurers and reinsurers constantly try to one-up their competitors to win over new customers and retain their current ones through technology, their competition will be solely through price cutting. It is becoming more and more evident that this is doable and up for the taking by regulators and the board members and CEOs running the industry.
PUBLISHED ON Mar 20,2021 [ VOL 21 , NO 1090]
Fortune News | Nov 25,2023
Fortune News | Jan 25,2020
Fortune News | Jun 10,2023
Fortune News | Apr 02,2022
Radar | May 04,2019
Fortune News | Jul 30,2022
View From Arada | Feb 12,2022
Fortune News | Apr 03,2021
Fortune News | Apr 22,2023
Fortune News | Nov 07,2020
Photo Gallery | 83300 Views | May 06,2019
Photo Gallery | 75466 Views | Apr 26,2019
Fineline | 58859 Views | Oct 03,2020
Fortune News | 58593 Views | Jul 18,2020
Commentaries | Dec 09,2023
Life Matters | Dec 09,2023
My Opinion | Dec 09,2023
Sunday with Eden | Dec 02,2023
Agenda | Dec 09,2023
Editorial | Dec 09,2023
Dec 24 , 2022
Biniam Mikru heads the department of cabinet affairs under Mayor Adanech Abiebie. But...
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...
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...
Dec 9 , 2023
Making a paradigm shift seems elusive for those in the driving seat of Ethiopia's mon...
Dec 2 , 2023
The symphony of traffic noise in Addis Abeba is not just a sign of life, but a siren...
Nov 25 , 2023
Ethiopia's quest to develop a functioning capital market is a demanding yet not unach...
Nov 18 , 2023
Prime Minister Abiy Ahmed (PhD) has made a fervent call for landlocked Ethiopia to ga...
I have a love-hate relationship with my phone. It is my go to source for information. I enjoy interacting with text messages and browsing t...
While doing laundry over the weekend, I began video chatting with a friend from overseas. Amid our lively conversation, I told him to give m...
Dec 9 , 2023 . By BERSABEH GEBRE
Amhara Bank finds itself embroiled in a detrimental controversy after its Board Chair...
Dec 9 , 2023 . By AKSAH ITALO
Moha Softdrink Industries S.C., Ethiopia's leading beverage bottler, is in a precarious situation after seeing its founding General Manager...
Dec 9 , 2023 . By BERSABEH GEBRE
The Addis Abeba City Administration officials have sanctioned plot allotments for various developers, com...
Dec 9 , 2023 . By MUNIR SHEMSU
Ethiopia's manufacturing sector remains in a tangled web of macroeconomic pressures, security challenges...
Or see contact page