A landmark partnership between ride-hailing company Little Ethiopia and Lion Insurance introduces insurance coverage for passengers and drivers covering up to one million birr in claims. The digital insurance product, unveiled at the Skylight Hotel on Tuesday, charges passengers an additional 15 birr per trip as a premium.
Abraham Mersha, CEO of Lion Insurance, lauded their product a game-changer for the ride hailing industry. He pointed out that Little was an ideal partner for the digital insurance service in consideration of its high corporate clientele.
Passengers are assigned a unique ID number that codifies details of the trip and sends it out to the insurer, the ride-hailing company, and the customer.
“We will use the ID to settle claims after an accident,” Abraham told Shega.
The CEO further noted that a maximum insurance payout of one million birr would be provided in the event of death during the trip.
In Kenya, where Little also operates and offers similar coverage, the insurance protects riders against total and permanent disability, hospitalization expenses, and death due to an accident during a trip. It also includes ambulance service reimbursements and provides a lump-sum cash payout (hospital cash) for hospital admission resulting from an accident.
While Ethiopia has experienced marked growth in the financial industry over the past few years, most of the gains have been concentrated in banks and microfinance institutions. Less than 1% of Ethiopians are currently insured, with nearly three-quarters of the coverage being for motor and maritime insurance. Ethiopia’s insurance industry lags in terms of diversity and penetration. Little’s new service is supplementary to the existing third-party insurance required of ride-hailing company drivers.
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