Despite Ethiopia’s increasing exposure to seismic activity, the country’s insurance sector remains dangerously underdeveloped in covering earthquake-related risks. With tremors occurring more frequently and infrastructure already showing signs of vulnerability, experts warn that failing to act could leave businesses and homeowners facing devastating financial losses.

Speaking to DW, Dr. Isaias Gebreyohannes, a civil and environmental engineering expert at Addis Ababa University, pointed out a major flaw in Ethiopia’s approach to earthquake preparedness. While building codes exist to mitigate seismic risks, gaps in compliance, poor design, and substandard construction practices have made many structures susceptible to damage. He warned that while recent earthquakes have been of low magnitude, their frequency is increasing, and the lack of insurance coverage is a serious concern.

Insurance industry leaders echo this warning. Habtamu Debela, Director of the Ethiopian Office of the African Reinsurance Corporation, also told DW that Ethiopia’s insurance market has lagged behind in offering earthquake coverage. Unlike other countries where governments have mandated such policies, Ethiopia lacks the necessary regulatory framework to drive insurance adoption. As a result, businesses, homeowners, and even public institutions remain financially exposed.

For a country that seeks to position itself as a regional economic hub, this is a glaring vulnerability. Infrastructure investments, real estate development, and business continuity all depend on risk mitigation measures, and insurance is a critical pillar. Without it, the financial burden of a major earthquake would fall entirely on property owners and the government, straining public resources and slowing economic recovery.