Gross written premium in the insurance industry showed a significant rise in the first half of the current fiscal year. The aggregate premium written by all private insurance firms reached five billion birr during this period. The lion’s share of the premium, accounting for 90Ppct of the total, is collected from general insurance lines of businesses such as Motor Insurance. The remaining comes from life insurance.
The surge in premium occurred despite cutthroat competition within the insurance industry where insurance companies often use price-cutting strategies to raise their market shares, instead of introducing new insurance products. The price war amongst insurers has been affecting the profit earnings of the firms. Its effect was especially felt in the 2015/16 Ethiopian fiscal year, with10 private insurers reporting a decline in profits. Despite this, the performance of the insurance industry in the first six months of this fiscal year reveals that all insurance firms have improved their premium collection. Amongst private insurers, Awash, Africa and Nyala are the leading beneficiaries of this growth by writing a premium of ETB358.4 million, ETB355.9 million and ETB319.6 million, respectively. Awash’s market share stood at 7.1Pct while Africa and Nyala hold 7.08Pct and 5.3Pct of the market share, respectively.
|Rank||Country||Gross Written Premium (In Million ETB)|
Source: National Bank of Ethiopia
6th Year . March 16 – April 15 2018 . No.59