More insurers have filed their application to the National Bank of Ethiopia (NBE) to be involved in Takaful service besides Global Insurance, which is the first to introduce the service. Similarly, a Global Takaful Forum has been held in Ethiopia.
Since the insurance business proclamation was amended in January 2020 and the directive for Takaful business in June, Global Insurance Company has become a pioneer in introducing the Takaful insurance service in the country that aims to address those who were excluded from the insurance sector.
According to Belay Tulu, Director of Insurance Supervision Directorate at NBE, at least two insurers have expressed their interest to commence the Takaful business as an alternative on a separate window.
He told Capital that the governing body has provided advice and support to those who demand to operate Takaful. “It needs more attention since it is different than other insurance business,” he added.
“We have preferred to confirm them to understand the business and help them in their preparation to commence the service prior to giving a license to the companies. As a result, we have provided support along the process,” Belay says, “we are working with them jointly to enhance capability for their operation.”
Fikru Tsegaye, acting CEO of Ethiopian Reinsurance, on his presentation about the Takaful business in Ethiopia at the forum held on Thursday 18 at Hyatt Regency said that Awash, Oromia and Nyala insurances have conducted a study to join the Takaful service.
Belay said that there is also interest to open a full-fledged Takaful insurance.
“An organizer of a full-fledge Takaful insurance company has approached NBE and we have consulted them, but they did not formally file for the undertaking of the formation of the company,” he reveled.
He said that sector capacity in the country and expertise including NBE is very limited that first requires growth. Such kind of forums and trainings is required to be facilitated to expand the service in the country and included those who are excluded because of their religion. “The takaful business will be instrumental since the conventional insurance still remains dormant in the country and will enhance significant contribution for the economy on the higher level,” the Insurance Supervision head underlined.
The Global Takaful Forum that also observed the re-takaful business was followed by experience sharing and trainings for two more days and was organized by Alhuda CIBE, a prominent consultant on the industry, Ethiopian Reinsurance and NBE.
Asseged Gebremedhin, Deputy CEO of Global Insurance Company, said that the global forum is crucial on sharing knowledge and experience from those who have huge global experience on takaful service.
He said that several experts from abroad have attended the forum that shall help uplift the Ethiopian takaful business. Asseged said that about 20 papers have been presented on the forum.