Trade Competition among Insurers in Ethiopia: A Critical Analysis

Abstract

This study sought to underscore problems surrounding trade competition scenario among insurers in Ethiopia. The insurance sector has its own distinct features that make it unique from other businesses due to its contribution to the development of the country’s economy as it provides sense of security; a means of sharing risk; a tool to manage risks efficiently; facilitating trade and investment. Due to this distinctiveness, it is a risky business whose failure may result in systematic risk and failure of the whole economy and hence strict regulation of the sector becomes inevitable. It is necessary to build competent domestic insurers to cope up with the trade competition challenges of huge foreign insurers during Ethiopia’s accession to the World Trade Organization (WTO). The paper addresses whether there is meaningful trade competition and the need for investigating and taking measures against anti-competitive trade practices to shape trade competition in the insurance market of the country. It is still tried to investigate the coordination between the National Bank of Ethiopia (NBE) and the Trade Competition and Consumer Protection Authority with regard to regulating trade competition in the insurance sector. It has been concluded that, currently, there is no meaningful trade competition among insurers in Ethiopia and there is need for investigating and taking measures by competent organs in order to promote and regulate trade competition in the insurance market. Moreover, this paper suggests that there must be meaningful trade competition and there is a need to take measures against anti-competitive trade practices after due investigation to promote trade competition in the insurance sector of the country.