Association of Ethiopian Insurers (AEI) said that the absence of insurance development policy, which should have to be prepared by the government, poses a challenge to the growth of the industry.
Yared Molla, President of AEI said during the fifth edition of East Africa Finance Summit on Wednesday that an absence of such a policy has retarded the growth of the sector.
The Summit is in progress today at the United Nations Economic Commission for Africa (UNECA).
“The economic reform in Ethiopia did not incorporate a policy tool to measure the growth of insurance industry,” Yared said in his opening remarks at the Summit.
He added: “There’s a tendency of seeing banking and insurance industries through a single lens, which prompted implementation of laws and directives in both sectors at the same time”.
“Such execution of laws and directives has slashed the growth of insurances,” he opines.
He also explained that the insurance companies are in favor of financial liberalization measures to be taken by the government.
Meanwhile, Ahmed Shide, Minister of Finance, who was a guest of honor at the Summit, explained that the government is under preparatory stage to liberalize the financial sector. He also told local banks to be ready for global competition.
“The government needs not only robust banks but also competitive insurance companies,” Ahmed said, adding, “We are ready to give attention to innovative ideas to make the insurance industry stronger”.