Amana Insurance SC is set to launch soon, marking a historic milestone in Ethiopia’s financial sector as the country’s first insurance company operating entirely under Sharia principles. The company will adopt the Islamic insurance model known as “Takaful,” emphasizing interest-free financial services in line with Islamic law.
Currently in the final stages of staffing and office setup, Amana Insurance was established with strong backing from major Ethiopian interest-free banks including Hijra, Rammis, and Shebelle Banks, each holding a 5% share. Additional shareholders comprise individuals and members of the local business community. However, Zamzam Bank, another prominent interest-free bank, was unable to join the venture due to technical difficulties.
The company’s initial paid-up capital stands at 260.4 million birr, below the new National Bank of Ethiopia (NBE) minimum capital requirement of 400 million birr for insurance firms. Organizer Ahbabu Abdella explained that since the capital was raised prior to the new regulation, Amana Insurance has two to three years to meet the threshold, and plans are underway to raise additional funds through share sales.
Led by Zuheir Hassen, a Sudanese veteran of the insurance sector and former CEO of Sudan United Insurance, Amana Insurance comprises 83 shareholders. Initially named “Amana Takaful Insurance,” the name was changed to “Amana Insurance” following NBE guidance.
Highlighting the strategic approach, Ahbabu noted that rather than each interest-free bank establishing separate Takaful operations, cooperation to form a single, unified insurance company was more practical and effective to serve the sector’s needs.
The company expects to secure final regulatory approval within two months after submitting the remaining documentation, with operations planned to commence within four months following licensing.
Amana Insurance faces challenges mainly due to a shortage of skilled professionals experienced with financial institutions operating under Sharia law. Reliance on external experts revealed that many foreign models do not perfectly fit Ethiopia’s context, causing delays and repeated revisions with the National Bank.
Despite initial hurdles, the founders express optimism about the company’s market prospects. They believe that introducing fully interest-free insurance will attract new customers rather than cannibalize existing markets—mirroring the growth seen after the establishment of fully interest-free banks in Ethiopia.
Currently, Ethiopia’s banking sector includes 32 banks, four of which are fully interest-free, while the rest offer limited Islamic banking services. Amana Insurance aims to complement this expanding sector and add a significant new dimension to the Ethiopian insurance industry, further developing the nation’s growing interest-free financial market.
