How the safest countries have the largest insurance industry, the Irony in Ethiopia

Equb and Idir functioning as traditional social safeguards, Ethiopia didn’t have its modern insurance industry until 1905. A partnership between the British-owned Bank of Egypt and Menelik II birthed the Bank of Abyssinia, which started providing marine and fire insurance. After multiple foreign insurers joined the market, the first Ethiopian insurance company, Imperial Insurance Company, was established in 1951. Now, we have 18 companies in operation. 1   

Even after being in the market for over half a century, the insurance penetration in Ethiopia is less than 1%. 70% of which is motor insurance, leaving the sector strained by the rising inflation and stringent competition. As of 2025, fewer than 400,000 people in Ethiopia hold life insurance.  Most of these were compelled by the nature of their employment. For a country listed as one of the ten least stable countries in Africa, its people don’t seem to plan to do anything much more than contribute to their Idirs, with a pay of up to 5000 birr. 2 It’s ironic that the safest countries have the biggest insurance industries while those who actually need it don’t.