The Association of Ethiopian Insurers has asked the National Bank of Ethiopia (NBE), for permission to stop supervising the insurance industry and that a new body be formed to follow up with the insurance sector, according to sources.
The issue was also raised during the second East African Financial Summit held at ECA a week ago. During that discussion insurance experts claimed the sector was not being given adequate attention because NBE, which regulates the financial industry, focuses on banks.
An expert, who once led a private insurance company, told Capital that the central bank does not fully understand the insurance industry. “This has affected the growth of the insurance sector, which contributes an insignificant percentage to Ethiopia’s GDP,” he said.
“Regulating the insurance industry without the central bank is required for insurance businesses to grow,” an expert explained.
Experts said that during the Imperial Era insurance was regulated by the Ministry of Trade.
The proposed regulatory body would be a commission or other supervisory entity that can more fully understand and respond to the demand of the insurance industry.
According to experts, in other parts of the world the insurance industry is not regulated by central banks, instead separate entities are responsible for managing the sector.
The insurance penetration in Ethiopia is very small and its share of the GDP is about 0.5 percent. Meseret Bezabih, CEO of United Insurance Company and President of the Insurers Association, told Capital that the association submitted its proposal to the central bank about a month ago to discuss the fate of the insurance industry.
“We just put the agenda up for discussion and we are now waiting for a meeting,” she added.
Since the market reopened after the downfall of the Derg regime the private insurance sector has been regulated under proclamation 86/1994 and NBE is responsible for overseeing it.
Currently there are one state owned and 16 private insurance companies in the country. They have 492 branches and 53.5 percent are located in the capital.
The total capital of the 17 insurance companies is over 3.6 billion birr, private insurance companies have 76 percent of this amount. In the 2016/17 financial year the insurance industry’s written premiums stood at 7.4 billion birr and general insurance grabbed almost 95 percent of that total.
NBE is responsible for supervising the financial sector as a whole including insurance, banks and micro finances. “If the new proposal is accepted it would be overlooked by a separate body responsible to the Ministry of Finance and Economic Cooperation,” an expert said.

President and CEO of CFA Institute, Paul Smith, visited Addis Ababa and met with potential and former students during an orientation session held at the Intercontinental Hotel. CFA currently provides courses on investment management.

Hotel De Leopol, which was under renovation for the last six months, may be taken over by an international brand. They are adding more rooms, a swimming pool and a meeting hall that accommodates up to 1,000 people.
It was opened ten years ago with 54 rooms and lies on 7,000sqm. Soon it will have another building which is eight stories high and have 68 more rooms.
When the hotel renovation is completed it will create jobs for 300 people. It will have three bars, two restaurants and a pastry shop.
Presidential suite rooms, an underground health center and new services are part of the renovation.
All rooms have suite bathrooms, mini-bar fridges, satellite TV, work stations and tea/coffee making facilities.
The hotel located on Jomo Kenyatta Road commonly known as Bambis Supermarket is currently negotiating with European brand hotels to manage the hotel.
“The hotel is not only closed for renovation but also to come up with new energy that fits the international standard and gives more satisfaction to our customers,’’ a source said.
“The new property will become one of the upscale international brands to operate in the capital. This gives us a tremendous opportunity to give good service in Ethiopia. Addis Ababa by itself is a key commercial and tourism hub for the country, with a real and growing requirement for upscale hotels,” the source added.
Hotel De Leopol was founded by Damenaw Siman and his family a decade ago who are also planning to invest in manufacturing and agriculture.
The hotel’s goal is to reach at least a four star level.
Currently there are 140 star rated hotels in Addis Ababa including Sheraton, Hilton, Golden Tulip, Radisson Blu, and Marriot Executive Apartment.

Ethiopia said it would not negotiate about the Grand Ethiopian Renaissance Dam (GERD) unless Sudan is included, as Egypt came up with a new proposal.
The Egyptian diplomatic chief met with his Ethiopian counterpart early this week to talk about economic cooperation and related agendas according to statements from officials of the two countries. In his address Sameh Shoukry, Minister of the Foreign Affairs of Egypt, said that he presented a proposal to facilitate negotiations on the GERD. “I have presented for my brother a different very simplified proposal,” he added.
“Egypt has recognized the importance of economic development to Ethiopia, but science should be the determining factor on how we manage this important issue,” Shoukry said.
An early November meeting of water ministers from Egypt, Ethiopia and Sudan in Cairo ended, without reaching an agreement on the “inception report” put forth by the international consultant, BRL hired by the three countries to study the impact of the dam.
Ethiopia stated that GERD would not have a significant impact on the downstream countries. Workneh Gebeyehu (PhD), Ministry of Foreign Affairs, said that Ethiopia will never negotiate concerning the project unless Sudan is included. “This is an issue between three countries,” Workneh said.
During the latest meeting of the tripartite national technical committee, among the three countries, no agreement was reached concerning the initial study of international consultants.
The biggest ever hydro power project on the continent will generate 6,000MW.
Prime Minister Hailemariam Desalegn is expected to visit Egypt in the coming months. The discussion between the two foreign ministers mainly focused on economic activity of Egyptian investors in Ethiopia.