Tedros Bogale, the long serving deputy CEO of the National Insurance Company Of Ethiopia S.C (NICE), is being forced out of his position effective January 7, 2017.
His resignation was accepted by the company’s board of directors, and Board Chairman Alemayehu Haile.
While Tedros attributes his departure to board interference, some banking industry insiders say that his resignation is linked with controversies concerning the company’s performance. An appeal from shareholders to the National Bank over Tedros’s alleged misconduct may have been a factor.
This will be his second resignation from the company, from the same position. A year ago, Tedros resigned following the retirement of the company’s long serving CEO, Habtemariam Shumgizaw. The company then decided to hire him on a contractual basis. “It was difficult to lose two CEOs at the same time, so the company decided to bring him back,” Tesfaye Debella, CEO of NICE told Fortune.
His resignation came after a 17 year tenure at the company in different positions. He started his career as an IT officer and passed through a number of positions. He held the post of deputy CEO for nine years.
“During both resignations, one of the issues that caused me to leave was board interference in the management of the company,” said Tedros.
“The board did not intervene unduly,” said Habtemariam, surprised by Tedros accusations. Habtemariam is now a member of the board
Tedros, 49, a father of four, has a B.SC degree in Mathematics from Addis Abeba University.
NICE, the oldest Ethiopian private insurance company was established 22 years ago. The company started with 34 shareholders.
Last year’s annual report showed that the company experienced a decline in profit after tax from 31 million Br to 21 million Br whereas earning per share declined almost by half to 366 Br. Although NICE registered a slight increase in its gross written premium from 161 million Br to 201 million Br, its gross claims escalated almost twofold to 112 million Br.
Last year, a letter of appeal to the National Bank stated that close to 1.6 million Br in claims was paid based on an expired policy. The letter also explained that shareholders’ returns for the year 2013 had not been paid for seven months. In addition, there were also several violations of policies and directives mentioned in the letter.
“I was cleared of all those accusations,” said Tedros. An ad-hoc committee was formed to look into the allegations and proved it was wrong.
In January 2015, in a letter signed by NBE’s Director of the Insurance Supervision Office, Temesgen Zeleke, the NBE ordered the company to correct the mistakes.
NICE’s paid up capital now stands at 60 million Br, fulfilling NBE’s requirement for general insurance businesses. The Central Bank required 75 million Br for insurance companies involved in both life and general insurance businesses.
“Upon my resignation I will focus on running my personal business working as an insurance broker,” said Tedros.
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