The Ethiopian Insurance Corporation (EIC) settled more than half a billion birr in insurance claims during the first quarter of the fiscal year. The state-owned giant’s 511 million birr in settlements is less than 20 percent of the 2.9 billion birr in claims filed.
The figure is also 76 million birr higher than the settlements paid out over the first quarter of the previous year.
Despite the surge in settlements, the Corporation’s profits before tax jumped to 407 million birr – more than fivefold the performance registered last year.
The majority of settlements (79.3 percent) went to motor insurance, followed by life insurance (24 million birr) and aviation insurance (22 million birr).
“Most of the settlements paid out are for claims transferred over from the final quarter of the previous year,” Mohammed Dawed, head of strategic planning and monitoring at EIC, told The Reporter.
He observes inflation has been an obstacle when it comes to claims settlements.
“The inflation of prices for spare parts and labor has resulted in an increment in settlements,” said Mohammed.
Still, the Corporation’s gross premiums jumped to 4.58 billion birr in the first quarter, 1.7 billion birr higher than the same period last year. Aviation and motor insurance premiums accounted for the largest share at 1.9 billion birr each, followed by marine insurance (187 million birr) and fire (156 million birr).
The Corporation settled a record 5.4 billion birr in insurance claims last year. Close to four billion birr was paid out to the families of victims of the Ethiopian Airlines 737 crash that claimed all 157 lives onboard the jet in March 2019.
This year’s payouts for aviation claims were for minor issues like spare parts, according to Mohammed.