Ethiopia Re: The Mother of All

Welcome to the 89th edition of ፍራንክ Digest!

Your weekly brief on all things Finance and Investing. Quick, enjoyable reads for busy professionals in 5 minutes or less.

Here’s what’s coming your way:

• 🫶 The Insurance Support Group

• 🎊 2026: Finding Your Best Financial Self

• 🖼️ Big Picture

Thanks for reading!

The Comforting Sounds of Reinsurance

Insurance

If you’re finance nerds like us and chose to read recent reports regarding the insurance industry rather than yell “3…2…1 HAPPY NEW YEAR!!!” like it’s 1999 then you know what we’re talking about.

It came to our attention that not a lot of people know that insurance companies need to be insured as well, just like having a babysitter for your babysitter. That’s odd but true.

Needless to say, the company holding the financial pacifier has the word insurance in its name.

In most cases, it's ‘Reinsurance’. And guess what, Ethiopia has one of those babysitters and it’s called Ethiopia Reinsurance, quite the innovative name (Look 👀 it’s sarcasm👈)

The good folks at Ethiopia Re (That’s what its friends call it), recently gathered to discuss their accounting homework, shouting ‘assets are rising!’ , ‘premium pay outs are up!’, ‘policyholders’ , ‘profit before tax’, ‘dividends’...

If you didn't get the hint, it was an annual shareholders meeting. Fun, right?

Ethiopia Re’s customers are insurance companies and just like their policy holders, they pay a premium to Ethiopia Re and spread the risk even further. If that’s not enough, Ethiopia Re then goes and buys re-insurance from global reinsures. If you ask us, it’s quite the Russian nesting doll 🪆

Here are some numbers for you:

🥳 2016: Year of establishment

🏢 17: Number of insurance companies as shareholders

⚖️ 40: Percentage of ownership by the government (Mainly CBE and EIC - Ethiopian Insurance Corporation)

💸 2.2: ETB (Billions) paid out as claims

💰 2.96: ETB (Billions) revenue made in 2024/25

In a nutshell, what is this article about is ➡️ we all could use some help 🥲

Big Picture

Insurance is not the sexiest business but it’s an essential business. Humans are unpredictable so whenever they make a booboo, insurance is there. Mother nature can be naughty too, whenever she gets into a tantrum, insurance is there.

But the burden can be big so having friends that can help is essential. And their friends will chime in as well and that’s how the risk industry works. 

Ethiopia Re can be a very systematically important company for the economy so let’s be nice to it 👍

ፍራንክ Picks 

🚶🏽 Event: “Culture as Currency” Networking Forum [ Hyatt Regency - Jan 8 ]

🗞️ In the news: Safaricom just priced data like it’s imported cheese

♟️ Innovation: New Food & Essentials Delivery Platform 🚴🏾

New Year, New You: Watching Your Personal Finance in 2026

Personal Finance

As we’re just stepping into 2026, we’re all thinking what’s my New Year’s resolution going to be this time? Certain that the list will include some leftovers from previous years.

When it comes to matters of money the possibilities are endless. Not just earning it, but using it wisely 😉

The reality of rising prices, changing job markets and growing responsibilities means that wealth building requires intention, patience and practical choices every year.

The first priority is gaining control over day-to-day finances. Many people earn a decent income yet feel constantly short of cash because spending is not tracked.

In Ethiopia, where mobile payments and cash are often mixed, money seems to leak from our accounts and mobile wallets.

Simply recording expenses for a few months such as rent, transport, food and entertainment reveals habits that can be adjusted without sacrificing much. This clarity creates room for saving and planning. The first lesson is master your cash flow. Aim for this basic rule:

• 50-60% needs

• 20-30% savings/investing

• 10-20% growth & enjoyment

Closely tied to this is the importance of an emergency fund 🛟 

Life disruptions are common: a health issue, a delayed salary or unexpected family obligations. Having savings equal to 2 months or more of living expenses can prevent borrowing at high interest or rushing to sell assets at the wrong time. Many people successfully use a combination of bank savings or a trusted Equb. The key is accessibility and safety, not high returns.

Unlike formal financial products issued by banks, equbs are typically community-driven groups, often formed among neighbors, coworkers, business networks, friends, or family members. Each member contributes a fixed amount at regular intervals (weekly, bi-weekly, or monthly), and the total pool is distributed to one member in turn until everyone has received their share. Check out our take on Revolving Riches!

When it comes to investing in banks or MFIs, the preferred instrument is time deposits for set and forget. Time Deposits lock in funds for a specified term such as three, six months, one year, or more often with higher interest than regular savings accounts. ታዲያ ግን ትዕግስት ይጠይቃል…

If you’re feeling a little more conviction, investing equity in the same financial institutions (banks, MFIs or insurance) are hot right now due to their regulatory scrutiny and perceived safety. Buying equity in any other business venture may also be recommended, but requires that YOU do a proper due diligence and understand the business. 

The newly launched Ethiopian Securities Exchange (ESX) will soon list equity shares of public companies, allowing investors to buy ownership stakes and potentially earn dividends and capital gains as the market grows. The secondary market permits trading after initial issuance through licensed brokers making your equity in companies more liquid.

Inflation remains one of the biggest challenges for savers in Ethiopia. Money left idle for too long loses value, which is why saving alone is not enough. You should think about protecting your purchasing power over time.

Work On Yourself

One of the most effective ways is investing in skills that can increase your personal income.

If you add to your digital skills, accounting, technical certifications or management capability you’re most likely to see your income grow or increase your value in the job market.

The advantage far exceeds the damage inflation does to you over the long term. 

If you have sufficient savings or an income trajectory that can support owning real assets such housing, you should go for it! But you can even think of beginner stage assets offering services to your neighborhood like a photocopy machine, washing machine or ride hailing cars.

Traditional assets continue to play an important role as protection against inflation.

Pooling resources for a shared ownership or mortgage payments can make assets like housing and cars more accessible.

Now, The Cautionary Tale Is In Order

Opportunities promising fast and guaranteed returns have become more visible in recent years, especially through social media. Whether related to informal trading schemes, unregulated investment platforms or speculative activities, these often lead to losses rather than growth. Sustainable wealth rarely comes quickly, and discipline consistently outperforms shortcuts.

The Ethiopian Capital Market Authority (ECMA) has now mandated that all share companies undergo a prospectus review process ensuring companies meet disclosure and governance standards before raising capital from the public. Hopefully, that means less of those Purpose Black real estate fiasco types.

Avoid or Be Extremely Cautious With:

• Get-rich-quick schemes

• Unregulated forex or crypto promises

• Informal lending without contracts

• Over-borrowing for lifestyle upgrades

Debt Deserves Careful Consideration

Borrowing can be helpful when it supports income growth, such as education or a business with proven demand.

However, loans taken on non-essential consumption often create long-term stress. Before borrowing, it is important to ensure that repayment will come from a reliable income, not future hopes.

Big Picture

Wealth building is best viewed as a gradual process.

Early years are about stability and growth. Building skills, increasing income, and avoiding harmful financial habits. Ownership of businesses, property or other productive assets comes later, followed by protection through diversification and planning. Trying to rush this process often leads to setbacks.

Mindset Shifts for 2026

• Income matters more than savings early on. Build your skill.

• Consistency beats brilliance

• Due diligence and contracts protect wealth

Thanks for sticking with us, ፍራንክ family! Keep those wallets smart and your inbox open - we’ll be sliding in next week!