Assessment Of Challenges And Opportunity Of Insurance Business In Case Of Ambo Town Insurance Companies

Abstract

The aim of this paper is to extend the line of knowledge about the current challenges and opportunities of insurance business in Ambo town. To do so the researcher conducted an extensive review literature in the field of insurance business to identify critical challenges of the Ethiopian insurance companies to be alleviated and the current opportunities of the insurance industry to be exploited. The paper assessed the current challenges and opportunities of the insurance industry in selected three insurance companies, Ethiopian Insurance Corporation, Awash Insurance S.C and Oromia Insurance S.C. The primary data were collected using semi closed ended questionnaires from branch managers, and clerks of those companies. The sample size was 61 with 100% response rate. The secondary data were collected from companies‟ annual reports and publications, from publications of National Bank of Ethiopia and from other related books. The findings of the paper indicate that lack of qualified insurance professionals, retaining existing customers, existing of price war among companies and increasing number of motor vehicles accidents are the current challenges of the insurance industry in this area. On the other hand the existing economic growth in the country, large number of private and government projects, high foreign direct investment and the current construction boom in the country are the opportunities for the insurance industry. Finally, the paper gives recommendations to overcome the challenges and exploit the existing opportunities of the insurance industry in Ambo town.