The Effect of COVID -19 on Insurance Industry in Ethiopia

Abstract

This study explored the performance of Ethiopian insurance industry prior to the pandemic,
current measures taken for adverse effect of COVID-19 by insurance industry, its probable
future effect and the way forward. Data were gathered from professionals via telephone
interviews, websites, published articles, reports, and press conference release. The study result
showed that, before the pandemic the country’s insurance industry is one of the segments that
have been broadly safe, sound, well capitalized and profitable. But, due to rise in the number of
cases, the usual business of insurances in Ethiopia is decreasing. Potential customers are not
willing to be covered for third and damage insurance due to restriction imposed on their usual
activities. Furthermore, if the pandemic remains for additional months, it will have adverse
probable effects on general, life and health insurances. To reduce these adverse effects, the
researchers suggest that, it is better for the industry to work hard and collaborate in this difficult
time with the government in fighting COVID-19. The insurance companies should be attentive,
flexible enough to accommodate emerging scenario and communicative to their core
stakeholders.