Government, international players drive Djibouti’s insurance market
The Djibouti insurance sector is expected to grow at a considerable pace in coming years owing to the improving socio-economic growth of the country, increasing penetration of international insurance companies, the launch of governmental insurance policies, and the bolstering port activities in the region according to a report by Research and Markets.
The Djibouti insurance market grew at a CAGR of around 7 per cent during 2014-2019. Insurance stands for a contractual arrangement offered by a firm providing a guarantee of reimbursement for any specified loss or damage.
It provides financial protection and hedges the risks of any uncertain incidents. The Djibouti insurance market includes both life and non-life insurance (automobile, marine, liability, others) policies.
The insurance sector in the country is regulated by the insurance directorate at the Ministry of Economy and Finance.
The Port of Djibouti is strategically located at the crossroads of one of the busiest shipping routes in the world, linking Europe, the Far East, the Horn of Africa, and the Persian Gulf, thereby propelling the trade activities.
In Djibouti, the motor and cargo insurance has been made compulsory by the authorities; for instance, the COMESA Yellow Card Scheme is integrated with the regional network of automobile insurance companies, thereby bolstering the demand for non-life insurance policies.
Additionally, the increasing disposable income levels, supported by several government insurance policies, are expected to propel the development of the personal insurance sector that will contribute to the overall insurance market in the region.