Motor insurance has become unaffordable due to the legal requirement of paying full-year premiums in advance, while making claims similarly has become complex, lament experts who closely follow the insurance industry.
Cognizant of this dilemma, FSD Ethiopia in collaboration with FSD Africa and the National Bank of Ethiopia (NBE) recently organized a knowledge series that took place at Sheraton Addis Hotel on July 14, 2023 under the theme “Innovation for Resilience -Shaping the Future of Insurtech in Africa”.
As the local experts underlined, the motor insurance sector remains unaffordable for many individuals due to various factors such as high premiums, limited coverage options, and the overall cost of maintaining a vehicle.

“This is particularly true for most of drivers who often face higher insurance rates,” local experts voiced out their concerns during the knowledge series.
As stated on the stage, it is hard to pay for insurance yearly.
“Payments are in cash, a complex and lengthy claim process. The insurance subscription and claim declaration process is primarily non-digital,” they argued.
“Although the third-party cover is reasonably priced, our policyholder will opt for a flexible payment option with other products such as health, life, and pension embedded in the prices. It takes up to 3 months to get the payout for a claim and the process requires 4 touch points before. The buying process is manual and so is the claim process,” they elaborated on the backwardness.
Though the financial sector is undergoing various reforms and changes, lack of information and dialogue has been stated as one of the underlying challenges in Ethiopia’s financial ecosystem.
As Solomon Desta, vice governor of NBE indicates, the insurance sector has contributed only less than 1 percent of the total GDP of the country, “There is a need for greater innovation and market development and despite the recent financial liberalization, the insurance industry in Ethiopia remains relatively under developed.”
“NBE is working in order to set up an independent body with a primary focus on encouraging the industry,” he added.
During the discussion, it was strongly suggested that comprehensive insurance need to be affordable. Furthermore, the claim process was urged upon to be reduced to 24 hours via digitization, while an introduction to digital payment into the insurance buying and claims process was seen as a the best fit.
With regards to NBE’s work to establish an independent governing body, experts received the gesture with opposition citing that such a body should be formed by insurance professionals and not bankers and further added that the sector has been derailed because it is led by the national bank as opposed to its own insurance body.
The event brought together the insurance ecosystem, including innovators, investors, corporate partners, and regulators and it aimed to foster growth, facilitate strategic partnerships, and establish an enabling regulatory environment that supports the advancement of the insurance sector in Africa.
Ermias Eshetu, CEO of FSD Ethiopia at the event stated, “FSD Ethiopia is proud to collaborate with FSD Africa to host the BimaLab Africa Midpoint Event and Innovation for Resilience Conference. This event presents an opportunity for us to showcase Ethiopia’s insurance sector and contribute to the advancement of the broader African insurance landscape. By embracing innovation, fostering strategic partnerships, and creating an enabling regulatory environment, we can collectively drive positive change and enhance societal resilience.”
BimaLab, established in 2020, has been instrumental in addressing the key challenges faced by insurtech and insurance start-ups in Africa. As an insurtech accelerator, BimaLab has connected talented innovators with mentors, industry experts, technology partners, regulators, and investors. In its three years of operation, BimaLab has supported 40 insurtech ventures, reaching one million customers and raising USD 3 million in funding. Currently, BimaLab Africa is accelerating 23 ventures across 9 African countries including Ethiopia through the BimaLab Africa Insurtech Accelerator Programme.
In this regard, NBE’s Vice Governor, expressed his delight in supporting the BimaLab Africa Midpoint Event and Innovation for Resilience Conference, stating, “Recognizing the importance of innovation in addressing the challenges faced by the insurance industry, this event marks a significant milestone in the collective efforts to drive innovation, foster resilience, and transform the insurance landscape in Africa.”
FSD Ethiopia recently launched the Knowledge Series, a monthly platform for financial industry stakeholders to come together, exchange views, share knowledge, and generate insights on critical topics important for the development of the financial sector.