Promoting Inclusive Insurance in Ethiopia

Program Development Objective (PDO)

The objectives of this technical assistance program are (a) to support the National Bank of Ethiopia in promoting access to insurance services of quality, value, and safety for low-income groups in Ethiopia and (b) to contribute to broader financial inclusion in the country. 


Traditional insurance services in Ethiopia are underdeveloped, with less than 1 percent of the population covered. For the more than 90 percent of the population—including workers, farmers, low-income entrepreneurs, and their families—that is not covered by social protection or mainstream insurance, microinsurance is the only option. A number of microfinance institutions and insurance providers in Ethiopia offer a variety of microinsurance products, including but not limited to credit life insurance, and the total estimated number of insured people is 1.9 million. Although this number is a success, it nonetheless falls short of fulfilling the insurance needs of Ethiopia’s 95 million people. 


The program team aims to help Ethiopia develop an inclusive insurance sector, specifically by addressing challenges through the following four components:

1.  Strengthening regulatory and supervisory frameworks for microinsurance to support the supply

2.  Supporting development of new microinsurance products 

3.  Developing regulatory and supervisory frameworks for index-based insurance

4.  Developing an adequate framework for market conduct and consumer protection; designing
     financial literacy programs

Expected Outcomes

The main expected outcomes of this project are as follows: 

1.  Strengthening regulation and supervision of Ethiopia’s insurance and microfinance sectors 

2.  Improving access to and use of quality insurance products

3.  Increasing the capacity of the National Bank of Ethiopia to regulate and supervise microinsurance
     and index-based insurance 

4.  Increasing (a) knowledge in the insurance and microfinance sectors of microinsurance products
     and pricing and (b) compliance with licensing and reporting requirements 

5.  Introducing an adequate framework for market conduct and consumer protection; designing
     financial literacy programs

6.  Increasing the number of microinsurance and index-based insurance providers, intermediaries,
     products, and clients 

7.  Increasing compliance by providers and intermediaries