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Insurance management is an essential function for insurance companies and other
organizations that offer insurance products. Effective insurance management helps insurers to
minimize risk, optimize their operations, and provide high-quality services to their customers.

a. Objectives of premium rate making: The objectives of premium rate making are to ensure
that the premiums collected are sufficient to cover the potential losses, expenses, and profits
of the insurance company while offering competitive rates to customers.

b. Steps in premium rate making: The steps in premium rate making involve analyzing the
risks that the insurance company is covering, evaluating historical claims data and losses,
determining the expenses associated with underwriting and claims handling, projecting future
losses, and developing a pricing strategy.

c. What are the basis attributes to be considered in premium computation: Basis attributes
considered in premium computation typically include the insured's age, gender, health status,
occupation, location, and the type of coverage being purchased.

d. The formula to compute the premium: The formula used to compute the premium is
typically based on multiplying the insurance rate per unit by the specified number of units,
with additional adjustments made for factors such as discounts or surcharges.

e. Reason to increase or decrease insurance premium: The primary reason to increase or

decrease insurance premium is to ensure that the premium collected is sufficient to cover the
potential losses and expenses of the insurance company while also offering competitive rates
to customers.

f. Roles of law of large number in premium computation: The law of large numbers is used in
premium computation because it allows insurers to predict the probability of future losses
with greater accuracy based on a large sample size.
This helps insurers to make more informed decisions about pricing and coverage.There are
several stakeholders in the insurance business in Ethiopia, and their roles are as follows:

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1. Insurers: Insurers are the backbone of the insurance business in Ethiopia. They are
responsible for providing insurance policies to individuals and companies to protect them
against unexpected losses or damages. They collect premiums from the insured and pay out
claims when the insured suffer losses.

2. Reinsurers: Reinsurers provide insurance protection to insurers. They provide financial

support to insurers in case of large claims or catastrophic events that can potentially bankrupt
the insurers.

3. Regulators: The National Bank of Ethiopia is the regulatory body for the insurance
industry in Ethiopia. The regulator sets the standards and guidelines for insurers to operate in
the country. It monitors compliance with laws, regulations, and ethical standards, to ensure
that insurers operate in a fair and transparent way.

4. Customers: Customers are individuals or organizations that purchase insurance policies to

protect their assets and manage risk. They pay premiums to insurers in exchange for
insurance coverage.

5. Agents and Brokers: Agents and brokers are intermediaries between insurers and
customers. They help customers to buy insurance policies and advise them on the best
policies to suit their needs. They act on behalf of insurers to sell policies and collect
premiums.

6. Employees: Employees of insurance companies are responsible for underwriting, claims

processing, sales, marketing, and customer service. They ensure that the insurance companies
operate efficiently and deliver value to customers.

7. Investors: Investors in the insurance business in Ethiopia provide capital to insurers to

enable them to write insurance policies and to grow their businesses. They expect a return on
their investment in the form of dividends or capital gains
Insurance is a contract in which an individual or entity pays a premium to an insurance
company in exchange for protection against financial losses or damages. Insurance can be
purchased for a wide range of risks including health, property, car accidents, and liability. In
case of an unexpected event, insurance company pays for the losses incurred..
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Insurance management refers to a set of processes and procedures put in place by insurance
companies to effectively manage their policies, premiums, and claims. It involves analyzing
and mitigating risks, setting premiums, collecting and managing premium payments,
providing customer service, and processing claims.

Effective insurance management involves a range of activities such as underwriting, risk

assessment, actuarial analysis, claims processing, and policy administration. This ensures that
insurance companies can operate effectively and efficiently while minimizing risks and
maintaining profitability.

Insurance management may also involve implementing regulatory and legal compliance
requirements such as financial reporting, policyholder protection, and data privacy laws. The
goal of effective insurance management is to provide high-quality insurance products and
services to customers while ensuring the financial stability and sustainability of the insurance
company.
I'm sorry, but as an AI language model, I don't have specific information about the policies
and procedures of any specific company. However, in general, managing insurance in a
company typically includes the following steps:

1. Identify the insurance needs of the company based on the type of business, the size of the
company, the industry, and the risks associated with the business activities.
2. Research different insurance policies and providers to find the most suitable coverage for
the company's needs and budget.
3. Purchase insurance policies and negotiate the terms and conditions with insurance
providers.
4. Maintain accurate records of insurance policies, premiums paid, and claims made.
5. Evaluate the insurance coverage periodically to ensure that it is still adequate for the
company's current needs and risks.
6. File insurance claims promptly and follow up with insurance providers until the claims are
settled.
7. Communicate any changes in insurance coverage or claims status with relevant
stakeholders, such as employees, customers, and business partners.

It's important
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Awash Insurance Company (AIC) is one of the oldest and largest insurance companies in
Ethiopia. It was established in 1994 as a subsidiary of Awash International Bank, which was
established in 1994 by 486 founding shareholders.

In the years following its establishment, AIC grew rapidly and expanded its operations
throughout Ethiopia. It offers a wide range of insurance products, including motor insurance,
fire and allied perils insurance, marine insurance, personal accident insurance, and health
insurance.

In 2008, AIC became the first Ethiopian insurance company to be awarded an ISO 9001:2000
certification for quality management. This helped to further cement its position as a leading
insurer in the country.

Over the years, AIC has played an important role in the development of the Ethiopian
insurance industry. It has been a pioneer in introducing new insurance products and services,
and has helped to raise awareness among the public about the importance of insurance

Today, AIC is one of the largest insurance companies in Ethiopia, with a network of more
than 50 branches and over 1,000 employees. It continues to innovate and expand its
operations, and is well-positioned to play a leading role in the future of the Ethiopian
insurance industry.
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Insurance management refers to the processes and activities involved in the administration
and oversight of insurance policies. Insurance management can encompass a wide range of
tasks, including underwriting, policy issuance, claims processing, risk assessment and
analysis, regulatory compliance, and customer service.

Insurance management involves the use of various tools and technologies to manage the
entire insurance process, from policy issuance to claims settlement. This can include software
programs to assist with underwriting and risk assessment, as well as customer relationship
management (CRM) systems to help insurers manage customer interactions and claims.

Insurance management is an essential function for insurance companies and other

organizations that offer insurance products. Effective insurance management helps insurers to
minimize risk, optimize their operations, and provide high-quality services to their customers.

The insurance business in Ethiopia is its modern application is a recent phenomenon. A

branch of a foreign insurance company know as “ Baloise Fire Insurance company” was

opened by on Austrian (Weinziner) in Addis Ababa in 1923 for the first time in

Ethiopia. The company paid compensation to a client in 1929 for damage to his store

caused by fire. Beginning form this time until the Italian invasion of 1936 some foreign

insurance companies were operating through their agents. During the Italian occupation

of Ethiopia in 1936 - 1941, Italian insurance companies operated and non-Italian

companies closed down.

A survey was undertaken by the then Ministry of Trade and Industry in 1954 to find out

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the situation of the insurance industry and to indicate ways how the industry could

develop. The survey revealed that there were 19 insurance companies operating in

Ethiopia of which there was only one domestic company, Imperial Insurance Company,

established in 1951). The companies had agents in port towns and commercial centers,

namely Addis Ababa, Asamara, Assab, Dessie, Diredawa and Msassaw.

A second survey on insurance companies was undertaken by the Ministry of Trade and

Industry in 1960. The survey revealed that the number of insurance companies operating

in the country increased to 33. In this survey also, Imperial Insurance Company was the

only domestic insurer.

Due to some malpractices of insurers and companies on the insurance industry the Addis

Ababa chamber commerce conducted a survey I 1967. The survey revealed that therewere 30
foreign companies operating either through branches or agents and 10 domestic

companies in the insurance business.

The chamber of commerce in its report recommended that a detailed legislation to control

the practice of insurance business be enacted.

In order to direct and control the insurance business, a low (proclamation No. 281/1970)

was passed. Prior to this low the commercial code of Ethiopia of 1960, articles 654-712

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tried to define the insurance contracts and the right and duties of the contracting parties.

Proclamation No. 281/1970 gave the responsibility of controlling the insurance business

to the Ministry of Trade and Industry. Based on the provision of the proclamation a

council was established chaired by the Minister of the Ministry of Trade and Industry and

consisting the following as members.

Minister of the Ministry of Finance and, Minster of the Ministry of communication, Head

of the planning Commission, Minister of the Ministry of Social Affairs and Environment

Development, and Governor of the National Bank of Ethiopia

The main objective of this council was to encourage and control the insurance business

and to formulate policies that enhance insurance and investment. Under the council the

office of the controller of Insurance was established. This office licensed 15 domestic

insurance companies, 36 agents, 7 brokers, 11 loss assessors and 3 actuaries.

Nationalization of the Insurance Companies

In 1974 the military government came to power and nationalized al the 13 insurance

companies that were operating in the country. The boards of all the initialized companies

were dissolved and a new provisional Insurance Board was set up. The nationalized

companies were operating independently but all were required to report to the provisional

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Insurance Board.

The Ethiopian Insurance corporation was established under proclamation No. 681/1975

with a paid up capital of 11 million dollars. The assets, liabilities, rights and obligation

of the nationalized private insurance companies were transferred to the Ethiopian

Insurance Corporation. The purpose of the corporation was:

 To engage in all classes of insurance business in Ethiopia.

 To ensure that insurance services reach the board masses of the people and

 To promote efficient utilization of both material and financial insurance resources.

Insurance Business Since 1991

Following that change of government in 1991 a new economic policy that increased the

role of the private sector in the economy was formulated. A new comprehensive law to

regulate the licensing operation and supervision of insurance business was promulgated

by the Transitional Government of Ethiopia under proclamation No.86/1994. Under this

legislation the task of the licensing and supervision of insurance business was given to

the National Bank of Ethiopia.

Downloaded by MThe law allowed private companies whose capital is wholly owned by
Ethiopian

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nationals and/or organizations wholly owned by Ethiopian nations and registered under

the laws of the having their head office in Ethiopia to engage in insurance business.

Proclamation No. 86/1994 further provides that the minimum share capital is Birr 3

million for general insurance business, Birr 4 million for long term insurance business

and Birr 7 million if the business to be done is both general and long term insurance

business.

It is with this legal frame work that one public enterprise and more than 8 private

insurance companies with a total of more than 106 branches are operating at present.