Background

 
Despite steady growth in premium volumes, insurance remains one of the least developed segments of Ethiopia’s financial sector, with penetration at approximately 0.3% of GDP, well below the African average of 3.6% and the global average of 6.5%. UNDP, through its Insurance and Risk Finance Facility (IRFF) initiative, seeks to address these challenges by fostering sustainable, scalable, and commercially viable insurance solutions. Building on this, UNDP Ethiopia, in partnership with Microinsurance Master, has launched the 2026 Insurance Innovation Challenge Fund (IICF) to develop inclusive insurance solutions, expand market reach, and address protection gaps for underserved communities across five priority focus areas: micro, small, and medium enterprises (MSME), health, women, biodiversity, and life insurance. 

Objective of the IICF

The overall objective of the Insurance Innovation Challenge is to leverage insurance and risk financing to protect lives, livelihoods, and assets, contributing to economic growth and resilience in Ethiopia. More specifically, the Insurance Innovation Challenge aims to:
1.    Identify and support insurance solutions for underserved markets, with priority focus areas of MSME, Health, Women, Biodiversity, and Life Insurance.
2.    Promote innovative, inclusive insurance models that target underserved populations, leveraging technology, new distribution channels, and partnerships.
3.    Enable local insurers and private sector actors to develop and implement tailored products and services.
4.    Share insights and create guidance materials to support the replication of successful models in Ethiopia and beyond.

Who can participate

Eligible participants include the following institution types:
•    Regulated insurers and microinsurers: NBE-licensed insurance companies and microinsurance providers, including bancassurance agents and brokers, with existing or proposed inclusive insurance solutions requiring acceleration or market expansion.
•    Microfinance institutions and SACCOs: institutions with an established distribution footprint among low-income and rural populations, positioned to embed or distribute microinsurance products.
•    InsurTech, FinTech, AgriTech, and HealthTech ventures: technology-enabled startups developing digital distribution, underwriting, claims, or risk-assessment tools relevant to inclusive insurance. Applicants without an insurance license will provide evidence of access to a credible underwriter (insurer).
•    Social enterprises and community-based innovators: early-stage organizations and community-based innovators developing solutions that address insurance access barriers for underserved populations, including women-led and rural initiatives.
•    Independent innovation teams: individuals or teams with innovative concepts for inclusive insurance products, distribution models, customer engagement solutions, or enabling technology. Applicants without an insurance license will provide evidence of access to a credible underwriter (insurer).

Selection criteria 

•    Evidence of market research and customer understanding: the proposed solutions must be at least at tested-prototype stage, or already launched and ready to scale, and must represent a fresh idea addressing a real market problem.
•    Innovative approach to demonstrated market need across five priority focus areas: micro, small, and medium enterprises (MSME), health, women, biodiversity, and life insurance.
•    Feasibility within Ethiopia's market and regulatory context. 
•    Commercial and operational viability; scalability and sustainability beyond the initial support. 
•    Women-led teams and innovators based outside Addis Ababa are strongly encouraged to apply.

Shortlisted participants will be invited to attend the information sessions and webinars below as part of Hackathon preparation.

•    Information Sharing Session 1: Overview of the Innovation Challenge and guidance on the application to be held on Wednesday, 7 October 2026

•    Upfront Webinar 1: Introduction to the Inclusive Insurance Landscape and Regulatory Dynamics, to be held on Tuesday, 13 October 2026

•    Information Sharing Session 2: Product, Market and Regulatory Dynamics on Tuesday, 20 October 2026

•    Upfront Webinar 2: Preparing for Customer Research, to be held on Tuesday, 3 November 2026
 

Methodology of the IICF

Shortlisted Participants will enter a Hackathon-style accelerator, gaining Intensive training, mentorship, and an opportunity to win an award. Prior to the Hackathon, participants will attend a series of information sessions to build capacity to understand inclusive insurance in Ethiopia, the regulatory frameworks governing it, and how to engage customers through research and testing. The hackathon will then serve as a platform for crowdsourcing innovative ideas, both new and existing, from a diverse group of participants. The collaborative nature of a hackathon will enable participants to co-create solutions to specific challenges in Ethiopia’s insurance sector. The 2026 Insurance Innovation Challenge will be implemented using the timelines below.

Activity Period

Application period                                                                  2 – 16 September 2026
Virtual Information Sessions and Webinars                           7 October – 3 November 2026
Screening, shortlisting, and onboarding                               16 – 28 September 2026
5-day in-person Hackathon and Pitch Day                           23 – 27 November 2026
Post-Hackathon mentorship and monitoring of Winners    December 2026 – May 2027

Participants will have access to intensive accelerator training, one-on-one mentorship from industry experts, regulatory guidance from the National Bank of Ethiopia (NBE), and an award of USD 15,000 in flexible support for the first-place winning solutions, alongside post-hackathon support, to refine prototypes and prepare for regulatory sandbox entry and market launch.

Expected Outcomes 

1.    Pipeline of Innovative Solutions: A robust pipeline of insurance solutions that are scalable, sustainable, and designed to meet the unique needs of the Ethiopian market
2.    Capacity Building: Enhanced capacity of local insurance companies, intermediaries, and insur-techs to scale innovative products and services.
3.    Case Studies and Best Practices: Development of case studies and best practices that can be shared globally, encouraging replication and scaling of successful solutions.
4.    Partnership and collaboration platforms: Avenues for interaction, identification and creation of partnerships that can further enhance the insurance sector.                                                                                                                    

The Application Process

***The application period will run from 2 September 2026 until 16 September 2026. Late submissions received after the deadline will not be considered.