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Ethiopian Insurance Industry Uncertain about Compulsory Third Party Insurance

The Ethiopian insurance industry is anticipating compulsory third-party insurance proclamation with uncertainty. The attitude of the insurers is primarily because motor vehicle insurance has persistently been unprofitable over the years.

Motor vehicle insurance is unprofitable due to high rates of traffic accidents and consistently increasing vehicle prices and maintenance costs according to industry sources. The motor insurance sector has the highest premiums because of the heavy losses associated with it, explain insiders.

Mandatory third-party insurance will automatically increase the share that the unprofitable motor insurance sector has on the insurance industry thus causing some concern among insurers.  

In related news it was announced that Nyala Insurance Company has shown a 19% growth in the last fiscal year. The company also registered a 47% increase in its long term insurance premium according to Woinshet Gossaye Company Finance and Property Management Executive Officer.

The insurance company has also announced its commitment to improve the accessibility of insurance services in rural areas in Ethiopia this week.

Source: The Reporter