Agenda | Jan 01,2023
Mar 30 , 2019
By NOEL MINWAGAW ( FORTUNE STAFF WRITERS )
East African Tiger Brand Industries, a manufacturer of personal care and food products, received 24.1 million Br in claims from United Insurance Bank on March 28, 2019.
The compensation was paid for fire damages incurred by East African at its Bishoftu warehouse on January 31, 2019.
East African Tiger Brand has been a client of United Insurance since September 2017 and had renewed its policy. The policy covers 13 different areas that range from automobiles to workers’ safety.
The Insurance Company paid the claim at the head office of East African Holdings S.C on Ethio-China Street. The company, which has 1,000 employees, has four units, which produce personal care, home care, packaging and food products. Since the company lost raw material it had imported in the warehouse fire, it had to continue production using local supplies, albeit at a slower pace.
The company was formed as a joint venture by East African Holdings and South African Tiger Brands almost a decade ago and was announced dissolved in 2016. East African Holdings EAG made an offer to buy Tiger Brand’s shares, and the divorce was completed last year.
Now that private companies are allowed to construct and rent out industrial parks, East Africa is planning to develop its land with sheds that can be used for industrial purposes, according to Ahmed Nuru, chairperson of East African.
“United should be commended because it finished its assessments as quickly as possible and settled our claim,” he said. “The fact that we were able to receive the compensation this quickly will help us get back to producing at our previous capacity as soon as possible."
United Insurance is one of the oldest insurance companies in Ethiopia. Established a quarter of a century ago with 25 million Br in paid-up capital, it paid 216 million Br in claims in the last fiscal year, an 18.6pc increase from the previous year.
The highest claim United paid was 52 million Br, and it was settled with the Ethiopian Roads Authority (ERA) six years ago. United was a guarantor for advance payments extended by ERA to Tibebe Construction and for the due performance of the contractor. The contract was later terminated by ERA.
Fire accidents are commonplace at factories, which is why almost every factory has fire insurance, according to Sewale Abate (PhD), assistant professor of finance and investment at Addis Abeba University’s College of Business & Economics.
“In a country where it’s usual for insurance companies to drag their clients through lengthy court battles, what United did could help it gain more clients,” said Sewale.
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