Ethiopian Reinsurance S.C (Ethiopian Re) is the first reinsurance Company incorporated under the provisions of article 5(8) of the Insurance Business Proclamation No.746/2012. It commenced operation on 1st July 2016, transacting both life and non-life businesses. Ethiopian Re’s head office is located in Addis Ababa, Ethiopia. The Company has also a plan to open branches in other countries as and when necessary.
Relying on its relatively strong capital base, plus sound retrocession protection provided by world renowned reinsurance companies, Ethiopian Re provides a comprehensive range of inward reinsurance cover to domestic insurers, in addition to accepting international business on selective basis. In doing so the Company strives to mobilize financial resources which would then be invested to generate income not to mention the role it plays in reducing hard earned foreign currency outflow through cross border reinsurance transactions.
Moreover, as the first reinsurance Company in the country, Ethiopian Re endeavors to enhance underwriting capacity and solvency of direct insurers through providing technical support and cover against individual and accumulated catastrophic losses. It also strives to simplify treaty negotiations, settlement of claims and payment of ceded premiums in domestic currency within the shortest time.
Strong Domestic Backing
As per Directive of NBE No. SIB/44/2016, Ethiopian Re enjoys both treaty and policy compulsory cessions. Accordingly, any insurer in Ethiopia shall cede at least 25% of its treaty and 5% of each policy to Ethiopian Re. The Company has also a right of first refusal in all facultative placements.
Ethiopian Re would strive to secure business from domestic and international markets. In the short term however it primarily focuses on building strong market base in Ethiopia. Ethiopia will remain the major source of the Company’s business in the foreseeable future. However, the Company has a well thought plan to expand its reach to international markets with special focus on accepting business from African, Middle East and Asian markets on selective basis.
The legal minimum paid up capital to establish a reinsurance company in Ethiopia is Birr 500,000,000 (Birr Five Hundred Million) equivalent to USD$ 25 million. The subscribed capital of Ethiopian Re is Birr 1,000,000,000 (Birr One Billion) equivalent to USD50 million which by any standard is huge for a company just started operation.