The Ethiopian Insurance Corporation (EIC), the giant insurer in the country, has finalised preparations to construct two multipurpose buildings with an estimated cost of 1.2 billion Br to accommodate its staff working in the East District.
The Company has already completed the design of the nine-storey buildings. The multipurpose buildings will have shops, residences and offices.
EIC has been struggling to clear the land for the past ten years. Currently, it has started conducting soil tests.
"Although we leased the land a decade ago, we could not do anything as some of the residents in the area refused to be relocated," said Netsanet Lemma, chief executive officer (CEO) of the firm.
Sprawled over 12,875sqm of land along DebreZeit Road near Adey Abeba, Saris, the multipurpose buildings were designed and supervised by Associated Engineering Consultants with a cost of 2.4 million Br.
Founded three decades ago, Associated Engineering Consultants has been involved in various designs of buildings such as Adama Aba Geda Hall, and headquarters of Ethiopian Construction Design & Supervision Works Corporation. "The project will surely start in the coming year if we continue to work at our current speed," said a manager at Associated Engineering Consultants. "Almost all preparations are completed except setting the tender document."
Originally, the buildings were designed to have six storeys but later it was changed to nine.
"Initially, the master plan of the city did not allow us to built more than six storeys, but now the city administration has permitted nine-storey buildings in the area," Netsanet said.
In the same token, the total cost of the project was first estimated to be 800 million Br, later, it increased to 1.2 billion Br. Upon completion in the coming four years, the construction of the buildings is expected to begin after the selection of the main contractor in this fiscal year.
"After completing the soil testing, we will float an international tender to hire a main contractor for the project," Netsanet said.
The main rationale of the construction of the new buildings is to raise the company's investment and saving its rent expenses, which is one of the major expenses of the Company. "Reinvesting is one of our major priorities," Netsanet said.
The trend of the past three years, shows that insurance companies are earning much of their income from investment activities.
Investments of insurers have reached 8.4 billion Br in the first three-quarters of the past fiscal year, two billion Birr higher compared to the aggregate premium collected. EIC alone collected investment income of 219 million Br in the past fiscal year, which is the highest in the industry.
The Corporation has also designed its headquarters, which is planned to be built on Ras Damtew Street, opposite Ambassador Theatre, two years ago. The construction of the headquarters, however, did not begin yet again due to disagreement with residents who live in the area.
"Similar to what we faced in Nefas Silk, the City Administration did not manage to clear the land quickly," said Netsanet.
EIC was established four decades ago after the nationalisation of thirteen private insurances. It currently has 835.6 billion Br paid up capital- almost twice of the paid up capital of the most capitalised private insurers of the country; Nyala and Awash insurance companies.
Two weeks ago, the company has announced a gross profit of approximately 700 million Br. The same week, the firm, which controls over one-third of the insurance market, unveils its plan to start four insurance policies in the coming month.