Nyala Insurance observes the 4th Ethiopian Insurance Brokers’ Day
These days more than ever before, dynamic changes are loudly happening in all corners of the world due to the disruptive nature of information technology. The case is not an exception to the financial sectors like the insurance industry.
Nyala Insurance S.C. (NISCO) is the one to worry much more about the poor performance of the Ethiopian insurance industry and its insignificant contribution to the national economy (less than one percent), on the one hand, and the effects of the forceful changes to the industry, on the other. Hence, the company has been showing its readiness to play a vital role in enhancing the country’s insurance industry in cooperation with the major role players such as the Association of Ethiopian Insurance Brokers.
To that end, NISCO has been organizing a series of consultative meetings to seriously talk about the challenges and prospects of the insurance industry and thereby come up with pragmatic solutions. For the fourth time, the company observed the Ethiopian Insurance Brokers’ Day on14th June 2018 at Intercontinental International Hotel under the theme: “Ethiopian Insurance Industry today and tomorrow”.
After welcoming the participants of the consultative meeting, Yared Mola, Chief Executive of Officer of Nyala Insurance S.C, underlined that due to the unpredictable and disruptive changes in information technology, the global insurance service is totally being transformed into a new mode of service excellence.
“This is an era of unprecedented change for the insurance sector. New technologies, new customer expectations and new competitive pressures are rapidly disrupting the traditional insurance business model,” Yared remarked.
Yared went on to say that the global insurance industry is transforming exponentially while Ethiopia’s is still walking at a very slow pace. “As we are not on equal platforms with the global insurance trends, we are surely the most vulnerable insurance companies in different dimensions; we need to redefine our organizational structure and culture, adapt ourselves to sustainable and value- creating change and need to compete in this new era,” he added.
In relation to the captioned theme, three NISCO’s young branch managers also broadly discussed the current challenges and emerging trends of the Ethiopian insurance industry categorizing in three major perspectives:
Perspective 1: Insurer and insured
Perspective 2: Product and process
Perspective 3: Marketing and regulations
According the presenters, many insurance customers are not happy with their current experiences due to vague and complicated underwriting processes and highly procedural claim handling systems.
Being the case, as the revolution of technology is reshaping the underwriting process, many Ethiopian insurance companies seem to be reluctant to renovate their services to compete with the new world, the presenters added.
In general, focusing only on the general insurance services, competing for the same of type products, absence of research and development departments, lack of integrations among insurers and other stakeholders, frequent snatching of employees, domination of affiliated businesses, being unwilling to allocate funds for creating awareness among the general public, lack of well-skilled human power, a long chain of claim processes, heavy dependence on manual systems, etc… are the key challenges of the Ethiopian insurance industry, the young managers outlined.
Similarly, a conclusion was drawn that the regulatory body (National Bank of Ethiopia-NBE) is hardly giving key level supports to the insurance industry unlike it does for the private banks.
According the presenters, NBE frequently concentrates on controlling rather than supporting; and it is not ready to quickly evaluate and approve proposals for new products, unable to go with the global pace, rigid regularity systems for investment options and expansion plans.
By the same token, by acknowledging Nyala Insurance S.C. for raising such important nation-wide issues into joint discussion forums, Wubetu Workneh, President of the Association of Ethiopian Insurance Brokers, said that insurance companies in Ethiopia are taking price-cutting strategy as an instrument for competing, rather than service excellence and technology innovations.
“In this regard, we have made many efforts to strengthen our association to play our role in addressing the current challenges and emerging trends but due to internal and external constraints we have not yet met our objectives”, he added.
Wubetu hailed all other insurance companies to show their due concerns and integrations emphasizing on developing technology-based services than to dwell on the traditional approaches.
Other participants of the consultative meeting also acknowledged NISCO for organizing such important meetings for the past four consecutive years, designing tailor-made insurance products like political risk policy, and its readiness to work with all members of the insurance industry.
NISCO is committed to jointly work with all stakeholders to contribute its part for the enhancement and development of the Ethiopian Insurance Industry in terms of designing new products, creating overall public awareness, service excellence, innovations, and market integrations.
At the end of the meeting, Nyala Insurance S.C. honored and gave recognition to the best performing Insurance Brokers for the 2016/17 fiscal year.