United Insurance, one of the oldest private insurance firms in the country, will be insuring a projected one million Ethiopians travelling to Middle Eastern countries for overseas employment.
The firm would earn 385 million Br to provide coverage after competing with seven other insurance firms who responded to a tender floated by the Ministry of Labor & Social Affairs on September 27, 2018.
United will be providing life insurance, which includes insuring natural death, suicide and funeral expenses of insured clients. It will also insure any physical and psychological damage suffered by employees caused by accidents, mental health or rape.
The bid announced by the Ministry set the minimum coverage of 300,000 Br for natural death and 350,000 Br for accidents.
"We didn't offer the lowest price, but we offered the highest insurance coverage," said an official at United Insurance, who wanted to remain anonymous. "We won, because we offered the highest coverage for individuals."
The company offered a premium of 385 Br for each covered individual. The insured will have to buy the insurance policy at the head office of the insurer, located on Sierra Leone Street.
During the bidding process, Oromia Insurance offered the lowest premium value, but the company's offer was rejected as the firm lacks the required 10-year experience in life insurance as set by the Ministry.
The state-owned Ethiopian Insurance Company, Ethio Life & Insurance, Nib, Awash, Nile and Nyala are the other companies that competed to sell the policy.
"We have also offered a unique arrangement for processing claims," the official told Fortune. "United will handle the claims in all branches across the country, unlike other products that are handled centrally."
Seid Ahmed, a shareholder and manager of Alfejir Foreign Employment Agency S.C. and vice chairperson for the Overseas Employment Agencies Association, commended the offer from United, stating that they were previously buying insurance for their association member employees for 450 Br.
He also states that the insurance company's branch network across the country has a positive impression. United Insurance has 40 branches, of which 24 are in Addis Abeba. But the clients can also file a claim at any of the 229 branches of United Bank across the country.
"It will help us to process the cases of the insured quickly," he said.
However, Seid believes that the Ministry should not have involved itself in the process of hiring an insurance company.
"The Ministry should focus on regulatory work rather than operations," he said. "They should leave this to us."
Overseas employment was banned for the past five years and was resumed with an official launching event held in the presence of Deputy Prime Minister, Demeke Mekonnen, last month.
The bilateral labour agreement between the governments of Saudi Arabia, Qatar and Jordan was also held last September, weeks ahead of the announcement of the resumption.
A new proclamation was legislated, new agencies established, labour attaches were assigned in Ethiopian embassies abroad, Technical & Vocational Education & Training centres and hospitals in the capital and regions were selected to train job seekers and provide medical checkups for processing prior to the trip.
For this purpose, 146 agencies have been given work permits to facilitate the job opportunities, while more than 69 hospitals were selected by the Ministry of Health across the the country to process medical check-ups. The agents were required to deposit an equivalent amount of 100,000 dollars in Birr in blocked accounts and had to open an office with a minimum of 46Sqm of space that accommodate six staff members.
The local agencies work with others agents in the recipient countries. The locals cover expenses such as insurance policies, visa and contract fees settled in Ethiopia. The overseas agencies will cover expenses related to job orders from the employer such as job orders, process and dispatch employees and miscellaneous chamber of commerce fees abroad.
"The legal trip to the three countries is not started since negotiation related to salary is still pending," said Assefa Yirgalem, communications director at the Ministry. "Because it is very low compared to other African countries," he commented.
The new proclamation directs that job seekers should have the educational background of at least eighth grade and be of a minimum age of 18 years. In addition to that, the recruits have to take training on housekeeping, job communication, self-cleaning, cleaning of households and equipment, and serving of food and beverages at the selected TVET centres like Winget and Addis Abeba Technical schools.
After the completion of two months of training, they will take an exam from the Occupational Competency Assessment Certification Centre to get their certificate of competence.
Upon receiving their certificates, the Ministry of Labour will then give them the green light to process their visas to travel and work in one of the three countries.
So far, General Winget for trained 53 female employees between the end of April and the middle of July this year. They have passed the competency exam and received their certificates on October 31, 2018.
Negalign Muleta, a private consultant in management with two decades of experience in labour issues, cheered all the precaution and preparations the insurance arrangement designed for the employees but raised some reservations in the implementation of the latter.
"Access for realistic information from recipient countries would be difficult," he said, "which makes the processing of insurance payments challenging."