Ethiopia's insurance industry faces growing pressure from digital newcomers as traditional insurers struggle with digitalisation, outdated processes and weak customer experience, according to a new study.
Dr Yared Mola, CEO of Nyala Insurance (NISCO), President of the Association of Ethiopian Insurers (AEI) and President of the African Insurance Organisation (AIO), presented the findings of his doctoral thesis, “Digitalisation and Customer Loyalty in the Ethiopian Insurance Industry”, to insurance CEOs, executives, industry veterans, brokers, agents and other professionals at a consultative forum organised by the Association of Ethiopian Insurers on 23 April 2026.
Unless Ethiopian insurers move quickly to modernise their systems, they risk losing customers and market relevance to InsurTech firms and other non-traditional entrants that are better equipped to deliver mobile-based services, faster claims handling and more convenient policy management, reported Capital Ethiopia, citing the thesis.
Dr Yared said the domestic market remains dependent on manual, fragmented and paper-based procedures. He warned, “Due to the local insurance sector’s slow pace of change, it faces a high risk of losing customers, losing market relevance, and failing to ensure long-term sustainability.”
The report identifies leadership hesitation as one of the biggest obstacles to reform. Many insurers, it says, still lack a clear digital strategy, while some executives continue to view technology spending as a cost rather than a long-term investment. The study also says regulation has not kept pace with the market, leaving insurers with weak pressure to embed digital transformation into core business plans.
That delay is creating space for InsurTech firms to move in, the study says. The findings also suggest that customer expectations are changing faster than the industry. Consumers who have already adapted to mobile banking now expect similar convenience from insurance companies, including mobile apps, online payments and instant SMS updates. The study warns that failure to meet these expectations could accelerate customer loss.
To read the Capital Ethiopia article, please click on this link.