The National Bank of Ethiopia (NBE) has raised the minimum capital for insurance companies by 567%. This new requirement came into effect on 15 September 2022. This change is the first of its kind since 2013.
Local insurers are now required to have the following minimum capital:
- 400 million ETB (7.5 million USD) instead of 60 million ETB (1.1 million USD) for non-life companies
- 100 million ETB (1.9 million USD) instead of 15 million ETB (283 450 USD) for life companies
Only 7 out of the 18 insurance companies operating in Ethiopia have a paid-up capital of more than 500 million ETB (9.4 million USD) each.
Insurers whose paid-up capital is below the new threshold have until 30 June 2027 to comply with the new guidelines. However, these companies are required to submit a capital increase plan to the NBE by 16 October 2022.
The previous minimum capital requirements remain applicable, until 15 September 2023, to new insurance companies that are in the process of underwriting shares.
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