It is said that yours is one of the better known private sector insurance companies in Ethiopia. Could you give to our readers a brief historical background?
I am not sure if our company is that famous. It would be modest to confirm that our company strides for excellence and strives to be the best insurance company. It is neither old nor large. It was established at the end of 1994 as a Non-Life insurance company. By 1997, UNIC-ETHIOPIA became the first private sector insurance company to underwrite Life business as well. Having begun operations from a single office at Meskal Square in Addis Ababa, it now operates from 11 locations in Addis Ababa and the Regions.
UNIC-ETHIOPIA believes that it has so far satisfied all its constituencies: the Customers, the Shareholders, the Employees and the community within which it operates.
What is your position within the market?
This is not easy to answer. Firstly, we need to agree on what standard or measure to use. By striving to be the best insurance company, UNIC-ETHIOPIA means to be the most professional (excellence in product quality and delivery) and commercial (highest profitability). If you use these measures, our Company stands tall in the industry.
For the last three years to 30 June 1998, the Company's financial performance appeared as follows:
Currency: E Br000'
| DESCRIPTION | 30.06.96 | 30.06.97 | 30.06.98 | | Paid-up Capital | 8,542,000 | 9,494,017* | 10,968,050* | | Profit before Tax | 1,700,597 | 5,083,754 | 6,377,139 | | Return on Capital - % | 19.91 | 53.55 | 58.14 |
* The paid-up capital shown above for years 1997 and 1998 excludes E Br4 million set aside for Long term (Life) business.
What are the main guidelines for your strategies and the best opportunities for the future growth of your Company?
Obviously, a company's strategies are predicated as much on a thorough understanding of its external environment as a realistic assessment of its internal strengths and weaknesses. The Ethiopian insurance market has just been opened for domestic private investment. Government has nevertheless continued to play a preponderant albeit negative role in the sector by recapitalizing the state insurer, by exempting it from certain requirements of the country's insurance law and unfairly disuading state enterprises from buying insurance services from the private sector. Another development exacerbating an already distorted insurance market is the emergence of politically associated companies in most sectors, including insurance, benefitting from obvious favours by and/or influences of highly and strategically placed political cadres/loyalists.
A combination of general lack of appreciation of insurance both as a complex, sophisticated and modern mechanism of risk transfer and management on the part of investors and the skill constraints of the regulatory body, appears to have given rise to insurance companies with little or no internal expertise or competence.
A combination of general lack of appreciation of insurance both as a complex, sophisticated and modern mechanism of risk transfer and management on the part of investors and the skill constraints of the regulatory body, appears to have given rise to insurance companies with little or no internal expertise or competence.
Against the recent emergence of divisive, centrifugal tendencies in the establishment of business enterprises in the country, UNIC-ETHIOPIA represents a refreshing departure. Its shareholders comprise individuals and enterprises: ordinary men and women, industrialists, professionals and business persons from all over the country. The name of the Company, "The United", was the collective choice of multi-profession and multi-ethnic investors.
While many new companies had to lure staff from the state insurer, UNIC-ETHIOPIA went to the University to employ fresh graduates for training. Very soon, this successful approach was followed by other companies in the market.
Without wishing to offend our competitors, our Company strives to set the professional pace in the industry: from introducing new products to formats for annual reports. We plan to keep our Company abreast of developments in the industry so that it continues to lead by example.
UNIC-ETHIOPIA along with many other shareholders, spearheaded the establishment of the UNITED BANK SC which went operational in September 1998. This has now created the much-needed linkage in the twin financial services of insurance and banking for the convenience of Customers.
Our Company aims to anticipate, embrace and forge ahead with change for the better. Because of such anticipation, we work hard to put in place the appropriate infrastructure in preparation for the entry, into the Ethiopian insurance market, of foreign competitors (multi or transnational companies).
| The Ethiopian Insurance Association is established to defend the right of private companies. Do you think that the Association is or will be effective?
Firstly, I am happy we now have an association to speak of. Secondly, I want you to know that the Association is established and is expected to do more than just defend the rights of member companies. Its Memorandum of Association lists some of its objectives as:
Provide a forum for closer relationship and understanding between Members; serve as a channel of communication between Members and the Supervisory Authority and other organs of Government, as a liaison between Members and other domestic and international professional bodies;
Serve as a clearing-house for the collection, dissemination and general exchange of information among Members on matters of common interest.
Undertake public enlightenment activities with regard to the benefits of insurance and risk management, to promote and enhance the image of the industry;
Promote, encourage and sponsor insurance research, training and education aimed at developing insurance professionals truly proud of the profession and responsible to the community they are to serve;
Explore, initiate and develop areas of co-operation between Members including the creation of mechanisms to raise the retention capacity of the Market;
Adopt a minimum standard of behaviour and Code of Conduct to be adhered to by Members for the development of a sound insurance market;
As to your second question (effectiveness), I wish to indicate that an association such as ours is only a reflection of its members. There are some basic differences in the structures and motivations of member companies. It is clear that certain government actions considered anti-competition and outrightly inimical to the development of the private sector may not be seen as such since some members stand to benefit from such actions. A state insurer, a substantial portion of whose premium income emanates from state enterprises, cannot be blamed for not being supportive of a strong privatization initiative. Nor can one blame a politically associated member for not disapproving political patronization which it benefits from. These differences are expected to surface from time to time and constrain the Association's ability to play effectively its civic and professional role in the rehabilitation and development of a true private sector. However, a weak association is better than no association at all. Where the interests of all the members coincide, the Association could be an effective advocate for either the profession or the industry.
From your background as an insurance professional, and having returned to your country and established a private company, what do you consider your most satisfying achievements?
Having started life in Addis Ababa as a street child/beggar at the age of ten, forced to flee the country at the beginning of the Dergue regime (via Metema into Sudan) and thus having been denied my birthright to live and work in my country, I find returning to my country and establishing a private insurance company most satisfying. Credit is due to all those who paid a very high price to make this possible for me and many like me.
In all my previous career, I joined going concerns. I had not created them although I had to reshape some of such concerns beyond recognition. The establishment of new private sector enterprises (from dream to conception and birth) has given me the professional challenge I had selfishly dreamt of for a long time.
As an African insurance person, I feel I had achieved the highest position as the Chief Executive Officer of the African Reinsurance Corporation. All that notwithstanding, I consider it a previlege and a most rewarding experience to be associated in the creation of private sector companies like UNITED INSURANCE and more recently UNITED BANK at this crucial juncture in my country's history.
In conclusion, what will be your final message to our readers?
The environment, appreciation and circumstances of most of your readers will be different from mine. I would like to believe, however, that both as human beings and the phenomenal contraction of distances brought about by technology in general and communications technology in particular, we share a growing number of values. While a street child from an American or European city (presumably where most of your readers are) achieving the highest professional status in America or Europe may make a front-page story, in countries like mine where almost all of us start as street children, such cases are commonplace and not newsworthy. But this too will someday change. Change, the only constant in a rapidly shrinking world, shall triumph as the ultimate equalizer.
Your readers and I understand and appreciate the importance of money. We both know that while it is not everything, it has a great deal to do with most everything one needs in life. We also know that there must be other motivations transcending the things we buy with money; as otherwise; the richest people in the world would have no further incentive to continue working hard. Blessed as I am with the means for the most basic of human needs, I derive the deepest and most fulfiling satisfaction from the knowledge of my modest participation in or involvment with the creation of employment, widening of the national tax base, the rehabilitation and development of a credible private sector and civic society in my country. |
United Insurance Compagny 