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Insurance
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Legal framework

Since 2004 with Law No. 71/AN/04/5ème, the insurance sector in Djibouti has been upgraded to other insurance markets in the world both the organization and functioning at the regulatory level.

There is a control state with the power to investigate the broadest powers to verify compliance of the accounts of insurance companies and assess their creditworthiness. The Regulations provide at least 50% of capital for domestic investors prohibits the relocation of risks and introduces the domiciliation of insurance on imports.

A prospect of increasing integration has allowed the Republic of Djibouti implementation in 2003 of the regime of COMESA yellow card. The Yellow Card is a regional map of automobile liability insurance that provides all the guarantees required by the regulations in force in the host country to resolve the problem of compensating victims of road accidents caused by vehicles in transit.

Market potential

The insurance industry is an essential component of the economic system to which it contributes on many levels such as securing persons and their properties as well as the financing of the economy.
In emerging economies, economic development generally comes with an increase of coverage demand or warranties related to non-life insurance operations (damage of properties and civil responsibility), but in developed countries, such demand is related to personal insurance (retirement, health, provident scheme).

In Djibouti, compulsory car insurance holds a dominating position on the market, while life insurance remains marginal and is limited to loan insurance that banks require before granting credits. The insurance market is operated by two insurance companies, namely AMERGA and GXA.

This market should more and more develop the personal insurance such as life insurance or health insurance that would overcome the insufficiencies of public provision and produce a long-term savings, which can help finance of economic development.
On the macroeconomic level, insurance companies, institutional investors, will contribute more to the financing of socio-economic development through investments of their important technical provisions.

Djibouti Market insurance system works without intermediaries. This has the advantage of avoiding the costs of acquisition and the problems related to the relationship between insurer and intermediary including the management of premiums and the liability to the insured. Management costs are therefore reduced to operating costs, acquisition costs are slight.