Tsehay Insurance Company, Ethiopia launched operations last week to become the 15th insurer to join the sector.
The company began operations at its three branches found at Piassa, Merkato, and Haya Hulet Mazoria with its main office located in Somali Terra to be operational in the near future according to Teshome Aklog, Chief Executive Officer of Tsehay.
The insurance company began selling shares at the same time as Tsehay Bank, dissolved since, with 90% of the shareholders in the bank with shares in the insurance company said Demessew Kassa, Project Manager of the company.
The shareholders decided to establish the insurance company first because it was feared that the National Bank was to raise the minimum paid up capital for insurance companies from 7 million birr.It was however the minimum paid up capital for Bank’s that was raised by the central bank from 75 million birr to half a billion birr that was put into effect for all new bank’s under formation as of September of 2011.
The shareholders opted to dissolve Tsehay Bank and the insurance firm became a lone financial operator instead of being affiliated with a bank that shares the same as originally intended.
The shareholders of Tsehay Bank went on to invest in another share company that became Tsehay Industrial SC.
Tsehay will join the insurance sector which has seen less investment than the banking sector which has proven to have more lucrative return according to industry experts.
There are currently 14 insurance companies with 221 branches across Ethiopia according to the Banking and Balance of Payment report that was put out by the Central Statistics Agency in December 2011.
Source: Addis Fortune
