The recently formed Ethiopian Reinsurance SC, the first reinsurance company in the country, has officially begun operating. The company made the announcement Tuesday August 23 at the Hilton Hotel.
The latest directive issued by the National Bank of Ethiopia mandated that all local insurance companies in the country have to allocate 25 percent of their reinsurance payment.
Previously insurance firms bought the reinsurance products from foreign based reinsurance companies with hard currency.
From the total written premium insurance companies have allocated 30 percent for the purchase of reinsurance.
The directive also made insurance companies pay five percent of every premium for the new company. The insurance firms have to settle their payments every three months.
Yewondwossen Etefa, former CEO of the state owned Ethiopian Insurance Company, is the first CEO of Ethiopian Reinsurance SC which was established with a paid up capital of 500 billion birr and one billion birr subscribed capital.