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BMI View: The insurance market in Ethiopia is underdeveloped on both a regional and global basis. With
foreign investors barred from the investment sector, development in the market has been reliant upon
domestic providers, which frequently lack the capital and/or expertise to expand. Distribution channels are
also narrow while products ranges remain heavily reliant upon basic lines. That being said, the market
does offer substantial growth potential. Ethiopia is a highly populous country that is experiencing rapid
urbanisation and economic growth, as well as gradual improvements to life expectancy, and these factors
will all support expansion of the life and non-life insurance sectors over the longer term
Key Updates and Forecasts
? The Ethiopian insurance market continues to develop as the economy expands and diversifies. The
government is reportedly considering setting up a deposit insurance scheme that would provide protection
for depositors (by charging banks a flat-rate fee), which could increase trust in formal banking
systems, and in turn lead to developments in the credit market.
? Ethiopia plans to join the African Trade Insurance Agency. A government bill was passed earlier in 2016
to ratify a loan agreement with the African Development Fund to support membership, and this will give
Ethiopia access to a regional body that provides political risk and trade credit risk insurance products.
? The life insurance market in Ethiopia is in the very earliest stages of development. Premiums will grow
by 10.6% in US dollar terms in 2016 to reach USD24mn - one of the smallest markets in the region and
accounting for around 10.7% of total insurance premiums written in the market.
? The larger non-life market will also see positive growth, with premiums rising by 7.7% in 2016 to reach
USD198mn. Motor insurance, the key basic compulsory line, will take the largest share of non-life
premiums, followed by transport insurance and property insurance.