By Daniel Tiruneh

In today’s fast-paced, ever-changing business environment, insurance plays a pivotal role in protecting investments, managing risks, and fostering economic stability. At the heart of Ethiopia’s growing insurance industry is the Ethiopian Insurance Corporation (EIC), the country’s largest and most established insurance provider. With a legacy spanning over half a century, EIC is synonymous with trust, reliability, and innovation in Ethiopia’s insurance landscape.

In this exclusive interview with Abyssinia Business Network (ABN) Magazine, Mr. Netsanet Lemessa, CEO of the Ethiopian Insurance Corporation, offers an in-depth look into the modern direction the organization is heading toward. Under his leadership, EIC is navigating the complexities of Ethiopia’s evolving market dynamics, while embracing cutting-edge technologies and global best practices. Mr. Netsanet shares his vision for transforming EIC into a modern, digitally equipped insurance company, capable of addressing both local and international challenges.

With over two decades of experience in the financial and insurance sectors, Mr. Netsanet’s career reflects a strong commitment to innovation, customer satisfaction, and policyholder security. In our conversation, he provides insights into how EIC is adapting to the growing needs of its clients, the corporation’s strategy for modernization, and the role of insurance in Ethiopia’s development agenda.

As the country’s economic landscape shifts toward modernization and liberalization, the insurance industry is set to undergo profound transformations. In this candid discussion, we explore how EIC is leading the way by embracing new opportunities, addressing emerging risks, and ensuring that it continues to be a pillar of Ethiopia’s financial stability.

Let’s dive into the conversation with Mr. Netsanet Lemessa, where he shares his thoughts on ushering in a new era for the Ethiopian Insurance Corporation and modernizing the industry for the future.

ABN: Mr. Netsanet, you’ve been at the helm of EIC during a period of significant economic and technological change. What has this leadership journey been like for you, and how are you steering EIC through these transformative times?

Mr. Netsanet Lemessa: It has been an exciting and challenging journey. The insurance industry is one that requires steady leadership because of the long-term nature of our business. However, to stay relevant, we must also adapt and innovate. Leadership, in my view, is about balancing these two aspects maintaining the core principles of trust, reliability, and transparency that our clients have come to expect, while pushing forward with new technologies and ideas that better serve our evolving market.

Under my leadership, we’ve placed a strong emphasis on strategic planning. We have developed a five-year strategy and a 10-year roadmap to ensure that we are proactive in the face of changes such as Ethiopia’s economic liberalization and integration into regional trade agreements. As part of this plan, we have expanded our branch network, adding 12 new branches, including satellite branches, to bring our services closer to communities across Ethiopia. This is essential for building trust and expanding our customer base in a way that reflects the changing dynamics of the Ethiopian economy.

Our efforts have already started bearing fruit. In the 2023/24 fiscal year, EIC saw a 24.3% increase in premium income, reaching 8.6 billion birr. This significant growth is a testament to our commitment to strategic expansion and customer satisfaction.

Leadership is also about fostering a culture of innovation. I believe in empowering my team to think creatively, challenge the status quo, and look for ways to improve service delivery. The success of EIC depends on the people behind it, and my role is to ensure they have the tools and the freedom to excel.

ABN: Insurance is traditionally viewed as a conservative industry, but it seems EIC is taking a different approach. Can you tell us more about the innovations that are driving this modernization at EIC?

Mr. Netsanet Lemessa: One of our top priorities has been to introduce digital platforms that make it easier for clients to access our services. We live in a world where convenience is paramount, and insurance should be no different. At EIC, we’re working on the implementation of online portals where clients can buy, renew, and manage policies without needing to visit a branch in person. These platforms not only make it more convenient for clients but also help us streamline our operations and improve efficiency.

One of the most ambitious projects we’ve been undertaking is the development and upgrading of an Enterprise Resource Planning (ERP) system and Core insurance Systems. This system integrates all aspects of our business sales, operations, customer service, and finance into a single platform, giving us real-time insights into our operations. The implementation of the IT systems will significantly improve our ability to respond quickly to market changes, address client needs, and ensure transparency in our internal processes.

In terms of product innovation, we are developing parametric insurance products that pay out automatically when specific events occur, such as droughts or floods. This type of insurance is particularly important in agriculture, where traditional insurance processes can be slow and cumbersome. By utilizing satellite data, weather and Crops Index models, we can automatically trigger claims processes based on predefined conditions. This ensures quicker payouts to farmers, helping them recover faster from natural disasters.

We are also focusing heavily on the digitization of micro-insurance. This is an important step in financial inclusion as we aim to provide low-income families, particularly in rural areas, with access to insurance products that meet their specific needs. These products can be accessed and managed through mobile platforms, making them more accessible to populations that may not have easy access to physical branches.

In addition, we are integrating data analytics into our decision-making processes. By analyzing trends in claims, customer behavior, and risk factors, we can tailor our products to better meet the needs of specific market segments. For example, we’re developing customized insurance products for SMEs, recognizing that small businesses face different risks than large corporations or individual clients.

ABN: The Ethiopian market presents its own set of challenges. What are the key obstacles EIC faces, and how are you addressing them?

Mr. Netsanet Lemessa: The Ethiopian market is unique, and while it offers enormous potential, there are significant challenges that we need to address. One of the primary challenges is the lack of awareness around insurance. Many people in Ethiopia, particularly in rural areas, have a limited understanding of how insurance works and why it’s necessary. To combat this, we are investing heavily in financial literacy programs. We are working with government agencies, NGOs, and educational institutions to educate the public about the value of insurance.

Another challenge we face is the regulatory environment. While Ethiopia’s framework is evolving, there are still areas where greater agility is needed to keep pace with innovation. The National Bank of Ethiopia has made significant strides in enhancing the regulatory landscape for the Ethiopian Insurance Corporation (EIC). Although there is more progress to be made to fully align with international standards, EIC remains optimistic and committed to collaborating toward this goal. We view the regulatory landscape as an opportunity for partnership, working closely with regulators to ensure that innovations are safe, secure, and beneficial for the public.

One of the most exciting opportunities we have is in property and liability insurance, particularly in light of Ethiopia’s infrastructure boom. With so many large-scale construction projects underway, there is a growing demand for insurance products that can cover these projects against risks such as damage, performance related guarantees, and legal liabilities. We are actively positioning EIC to be the insurer of choice for these projects.

We are also seeing increased demand for health insurance products. Ethiopia’s growing middle class is becoming more conscious of healthcare costs, and as a result, there is a rising demand for private health insurance. EIC has expanded its offerings in this area, creating customizable health insurance plans that cater to individuals, families, and corporate clients. This is an area where we see substantial growth potential over the next few years.

ABN: Accessibility is crucial in a large and diverse country like Ethiopia. How is EIC ensuring that insurance is accessible to all segments of the population, especially in rural areas?

Mr. Netsanet Lemessa: Accessibility is one of the key areas where we’ve focused a lot of our efforts. Ethiopia is a large country with diverse regions, and we understand that a one-size-fits-all approach won’t work. To address this, we’ve opened 12 new branches across the country, bringing our total branch network to 125. This expansion has been crucial in ensuring that people in rural and underserved areas have access to insurance services.

In addition to our branch network, we are leveraging mobile technology to expand access. Mobile insurance platforms allow people in rural areas to buy insurance, pay premiums, and file claims from their phones. This is particularly important for reaching populations that may not have easy access to physical branches. We are partnering with microfinance institutions and mobile network operators to make this possible. By integrating with mobile financial services, we can offer micro-insurance products tailored to the needs of low-income households, farmers, and small businesses.

We’ve also recognized the importance of community outreach. Our team regularly conducts awareness campaigns in rural communities to educate people about the benefits of insurance. These campaigns are crucial in building trust, especially in areas where insurance is a new concept. By focusing on financial literacy and community engagement, we are working to create a more inclusive insurance market.

ABN: Finally, looking ahead, what’s your vision for the future of EIC, and how do you see the company evolving in the next decade?

Mr. Netsanet Lemessa: I believe the future of EIC is very bright. We are in a strong position to lead the transformation of Ethiopia’s insurance sector. Over the next decade, I see EIC becoming not just the largest insurer in Ethiopia, but also one of the leading insurers in the region. We will continue to expand our product offerings, particularly in agricultural insurance, Life & health insurance, and property insurance, as these areas will be key growth drivers in the coming years.

We are also investing heavily in technology. The future of insurance is digital, and we are committed to being at the forefront of this shift. Artificial intelligence, machine learning, and big data analytics will play a major role in how we assess risk, develop products, and serve our customers. By embracing these technologies, we will be able to offer more personalized, efficient, and responsive services to our clients.

My vision for EIC is that we continue to be a trusted partner for individuals and businesses alike. We want to provide peace of mind for our clients, knowing that they are protected from life’s uncertainties. At the same time, we will continue to play a crucial role in Ethiopia’s economic development by providing the insurance products that businesses need to grow and succeed.

As we look to the future, we remain committed to our core values of integrity, customer focus, and innovation. With these guiding principles, I am confident that EIC will continue to thrive and grow, becoming a beacon of excellence in Ethiopia’s financial services sector.

Conclusion

EIC’s transformation under Mr. Netsanet Lemessa’s leadership is a testament to the power of visionary leadership, strategic innovation, and a deep commitment to customer service. In an ever-changing landscape, EIC continues to adapt, innovate, and grow ensuring that it remains at the forefront of the Ethiopian insurance industry. As the company expands its reach, embraces new technologies, and fosters financial inclusion, it is not just securing the future of its clients, but also contributing to the broader economic growth of Ethiopia.

This interview offers a glimpse into the exciting future of Ethiopia’s insurance sector, one where tradition and innovation come together to create a more secure and prosperous future for all Ethiopians. EIC’s journey is far from over, and under the leadership of Mr. Netsanet Lemessa, the company is poised to achieve even greater heights in the years to come.

The National Bank of Ethiopia (NBE) is advancing a supportive regulatory framework to foster resilience and financial inclusivity by introducing parametric and micro-insurance. These innovative products offer crucial risk protection to underserved groups, providing rapid, trigger-based payouts and affordable coverage for small businesses and low-income households. While integrating these solutions, NBE is carefully addressing consumer protection and clear payout guidelines to encourage growth while maintaining oversight. Through collaboration with insurers and stakeholders, NBE is creating a balanced environment that enables Ethiopia’s financial sector to reach vulnerable communities, promote economic stability, and drive inclusive growth across the nation.