Life insurance - Ethiopia | Statista Market Forecast

The Life insurance market market in Ethiopia is expected to reach a market size (gross written premium) of US$2.46bn in 2024.
Per capita, the average spending in the Life insurance market market is projected to be US$18.98 in the same year.
With an annual growth rate of 3.53% (CAGR 2024-2029), the gross written premium is estimated to increase, resulting in a market volume of US$2.93bn by 2029.
When compared globally, the United States is anticipated to generate the highest gross written premium of US$1.3tn in 2024.
The life insurance market in Ethiopia is experiencing steady growth due to increasing awareness and demand for financial protection among the population.

Definition:

Life insurance is a type of financial product that provides financial security for individuals and their families. In simple terms, when you buy a life insurance policy, you pay regular premiums to the insurance company. In return, if you were to pass away while the policy is in effect, your designated beneficiaries receive a lump sum payment, known as the death benefit, which can help them cover living expenses and financial needs. Life insurance is designed to provide peace of mind and support for loved ones in the event of the policyholder's death. 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.

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, and the share of insureds in the total population for over 50 countries.

Death benefit insurance
Endowment insurance
Disability insurance
Dowry insurance
Birth insurance
Term life insurance
Whole life insurance
Universal life insurance
Burial insurance
Other types of life insurance

Health Insurance
All non-life insurance types
Reinsurance

Ethiopia, a country in the Horn of Africa, has been experiencing notable developments in its life insurance market.

Customer preferences: Ethiopian customers are increasingly recognizing the importance of life insurance as a means of financial security and protection for their families in case of unexpected events. The shift towards more long-term financial planning and risk management is driving the demand for life insurance products in the country.

Trends in the market: One of the key trends in the Ethiopian life insurance market is the growing awareness and education about the benefits of life insurance. As more people understand the value of having life insurance coverage, the market is experiencing a steady increase in the number of policyholders. Additionally, the introduction of innovative life insurance products tailored to the needs of the local population is further fueling market growth.

Local special circumstances: Ethiopia's life insurance market is unique due to the country's demographic profile and economic landscape. With a large young population and a rising middle class, there is a growing need for life insurance products that cater to the specific requirements of these demographic segments. Moreover, the government's efforts to promote financial inclusion and regulatory reforms in the insurance sector are shaping the market dynamics in Ethiopia.

Underlying macroeconomic factors: The development of the life insurance market in Ethiopia is also influenced by broader macroeconomic factors such as economic growth, stability, and regulatory environment. As the country continues to experience economic expansion and stability, more individuals and businesses are inclined to invest in life insurance as a way to safeguard their financial well-being. Additionally, the government's commitment to improving the regulatory framework and promoting private sector participation in the insurance industry is creating a conducive environment for market growth.

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.

The biggest life insurance market globally is the United States, and it was almost twice as large as the second-biggest market, China. People take out life insurance to financially support their loved ones after their death. The payout is often used to cover funeral expenses, replace income earned by the deceased, or pay for children's education. It can be paid out in a lump sum or as an annuity, which is paid in regular installments for either a specified time or for the lifetime of the beneficiary. In 2022, the United States was the leading life insurance premium writing country, with a total value of life direct premiums written exceeding 600 billion U.S. dollars. The second and third-largest life insurance markets were China and the United Kingdom, respectively.