Insights from over 45 innovators tackling climate, health, and economic vulnerabilities through inclusive insurance.

In 2022, Ethiopia suffered an estimated $250 million in losses due to climate-related disasters. More than 95% of those losses were uninsured. For families, this meant selling off assets or falling deeper into poverty. For small businesses, it meant shuttering after a single shock. And for the government, it meant diverting critical funds from development priorities to crisis response. Ethiopia’s situation reflects a global reality: the protection gap is widening, especially for the most vulnerable. Unfortunately, Ethiopia has one of the lowest penetration rates in sub-Saharan Africa in terms of microinsurance.  

To help close this gap, the UNDP Insurance Innovation Challenge Fund (IICF) was launched to identify and support bold, locally rooted insurance solutions. This year’s applicants brought together over 45 innovators working to build financial resilience in communities most exposed to climate shocks, health emergencies, and economic instability. What emerged was a wave of fresh thinking, solutions that go beyond agriculture and push the boundaries of what insurance can look like in low-income settings.

Historically, Ethiopia’s microinsurance market has focused almost exclusively on smallholder farmers. Drawing on international experience, the 2024 IICF looked beyond the farm, welcoming innovative and pragmatic solutions that tackled health, urban climate risks, and the vulnerabilities of small enterprises and informal workers. A strong digital shift was noticeable: nearly half of all applicants proposed mobile-first platforms, AI-driven underwriting, or blockchain-based claims systems, showing that Ethiopia’s growing mobile connectivity is unlocking new paths to inclusion.

To help promising ideas grow into viable models, IICF ran a hands-on hackathon with nine shortlisted private sector teams focusing on commercial solutions to insurance challenges. These startups received support for product refinement, user research, and understanding the real needs of their target beneficiaries. Throughout the process, one lesson came through clearly: effective insurance isn’t just about the product. It’s about listening. Teams were urged to spend more time with users than in offices, to simplify claims processes, and to build trust through designs that reflect the lived realities of people.

Spotlight: Three Transformative Models

Jamii.One 
A mobile platform digitizing community-based groups (e.g., Iddirs), enabling insurers to offer tailored microinsurance. Over 1 million group members are registered, and 170,000+ now access life insurance—many for the first time.

HuluCares 
Combining blockchain and telemedicine, HuluCares digitizes Iddir networks to offer flexible, affordable health insurance. Products like HuluTena and Huluiddir serve women, informal workers, and SMEs through mobile-based platforms.

Ledir by Equb 
A mobile-first insurance platform for cooperatives and informal savings groups. Ledir enables affordable group coverage (health, accident, funeral) with real-time claims tracking and seamless integration with mobile money.

Lessons for the Global South

Ethiopia’s experience offers three lessons:

Distribution Matters: Success lies in partnerships—with mobile networks, cooperatives, and MFIs—not just insurers. Private sector solutions can be a significant part of the future.  

Regulatory Innovation Is Key: New models like parametric insurance and Takaful need sandbox environments to scale. Innovative firms benefit from regulatory flexibility to test their products in real-world settings.  

Design with Gender in Mind: Only two out of 45+ solutions focused on maternal health—an urgent opportunity for impact. Women represent an important part of the customer pool and of the beneficiaries from insurance programs.  

What’s Next

UNDP is working closely with the three selected insurance innovators, offering tailored technical support to help them refine their products, improve data use, build strategic partnerships, and strengthen their business models and go-to-market strategies.

Looking ahead, UNDP and its partners are committed to scaling these efforts. This means advocating for more supportive policies, unlocking blended financing, and helping innovations move beyond the pilot phase. While the IICF’s $40,000 seed grants offer crucial early-stage backing, achieving national impact will require broader cross-sector collaboration.

Ultimately, the protection gap isn’t just about money—it’s about thoughtful design. Ethiopia’s insurance innovators are showing that inclusive insurance is not only achievable, but also already taking root. Their tech-driven, community-centered solutions are paving the way for a more resilient future. It is time to scale up this promising model.  

To learn more or partner with us, visit https://irff.undp.org/africa/ethiopia or contact us at et.irff.undp.org. Let’s ensure the uninsured—before the next crisis hits. 
 

*Blog by Redeit Girma Hailu, National Project Coordinator, Inclusive Economic Unit, UNDP-Ethiopia