Insurances

The Insurances market in Ethiopia is projected to reach a gross written premium of US$4.50bn in 2024.
Life insurances dominate the market with a projected market volume of US$2.46bn in 2024.
The average spending per capita in the Insurances market amounts to US$34.66 in 2024.
When compared globally, the United States has the highest nominal value, reaching US$3.8tn in 2024.
The gross written premium is expected to show an annual growth rate (CAGR 2024-2029) of 3.74%, resulting in a market volume of US$5.40bn by 2029.
In global comparison, the United States will generate the most gross written premium, reaching US$3.8tn in 2024.
Ethiopia's insurance market is experiencing a rising demand for microinsurance products to cater to the needs of the low-income population.

Definition:

Insurance is a financial arrangement that provides individuals or businesses with protection against unexpected financial losses. In exchange for regular payments, known as premiums, an insurance policyholder is covered in case of specific events, such as accidents, illnesses, or damage to property. When a covered event occurs, the insurance company compensates the policyholder, helping them recover from the financial impact of the loss or damage. Gross written premium (GWP) is the main indicator of the insurance market. It is the total amount of money that an insurance company collects from policyholders for their insurance coverage before deducting expenses or commissions.

Structure:

The insurance market comprises life and non-life insurances. The non-life insurance market covers the following insurance types: health, motor vehicles, property, general liability, and legal.

Additional information:

The market contains the following KPIs: gross written premium aggregated for all countries and regions, gross written premium per capita, gross claim payments, loss ratio – calculated as gross claim payments divided by gross written premium, for selected European countries the distribution channels of insurance bookings, and the share of insureds in the total population for over 50 countries for live, health, motor vehicle, property, general liability, and legal insurances.

Life insurances
Non-life insurances

Some non-live insurances, such as travel insurance, freight insurance, and accident insurance
Reinsurance

The Insurances market in Ethiopia has been experiencing significant growth and development in recent years. Customer preferences in the insurance market in Ethiopia are shifting towards more comprehensive coverage options, driven by increasing awareness of the importance of insurance protection. Customers are seeking policies that not only cover traditional risks like health and property, but also provide coverage for emerging risks such as cyber threats and climate-related disasters. Trends in the market show a growing demand for microinsurance products tailored to the needs of low-income individuals and small businesses. This trend is driven by efforts to increase financial inclusion and provide a safety net for vulnerable populations. Additionally, there is a noticeable increase in the adoption of digital insurance solutions, making it more convenient for customers to access and manage their insurance policies. Local special circumstances in Ethiopia, such as a rapidly growing population and a rising middle class, are contributing to the expansion of the insurance market. As more people enter the workforce and acquire assets, the need for insurance products to protect against various risks is becoming more pronounced. Additionally, the government's initiatives to promote the insurance sector and improve regulatory frameworks are creating a more conducive environment for insurance companies to operate and innovate. Underlying macroeconomic factors, including steady economic growth, urbanization, and increasing foreign investment, are also driving the growth of the insurance market in Ethiopia. As the economy continues to develop, there is a greater need for insurance products to support business activities and protect against potential risks. Moreover, the country's efforts to strengthen its regulatory environment and enhance consumer protection are instilling confidence in the insurance industry and attracting more players into the market.

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on gross written premium, gross written premium per capita, gross claim payments, loss ratio, and distribution channels.

Modeling approach / Market size:

Market sizes are determined by a Bottom-Up approach, based on a specific rationale for each market layer. As a basis for evaluating markets, we use industry associations, national statistic offices, and international organizations, such as OECD. Next we use relevant key market indicators and data from country-specific associations such as insurance consumer spending, gross domestic product, insurance - consumer price index (CPI), population growth. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing and HOLT-linear. The main drivers are insurance consumer spending and insurance - consumer price index (CPI).

Additional Notes:

The market is updated twice per year in case market dynamics change. The impact of the COVID-19 pandemic is considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

Both the number and cost of global risks are rising due to drivers, such as climate change and cyber crime, and these trends are impacting in the insurance industry. The global insurance market was worth almost six trillion U.S. dollars in 2022, but this looks set to increase substantially in the coming years. Cyber crime is consistently seen as a leading risk to global business by risk management experts. Meanwhile, the cost of natural disaster losses rose over the past two decades. These risks are likely to grow in the future, which will sustain the growth of the insurance sector.