Insurance penetration in Somalia is improving day by day. This has been as a result of the following main reasons;
- Many Organizations buying insurance services from local Insurance Companies (we have 5 Insurance Companies)
- The increase in the number of local Insurance companies.
- Improvement of security In Mogadishu and entire Somalia.
Baraka Insurance which has been in existence since the year 2018 is now shaking the industry by providing unique, value added and cheaper insurance products that are customized to meet the needs of society at large.
Baraka insurance offers a variety of insurance services in line with Islamic insurance principles including health insurance, travel insurance, property insurance, motor Insurance, goods in transit, life insurance, marine insurance among many.
One Of Baraka Insurance Clients (Ali Abdi Director of Eagle Group Company) when asked about Group medical Insurance Cover that they have with Baraka He said;
“I am very happy to have our Staff insured because the insurance company takes care of all their Medical needs including maternity, inpatient, outpatient, optical, dental and even funeral expenses. It is the first time we signing up for this service but so far we are so grateful we made this decision,”
People loose their lifetime savings, investments and even property worth billions through the risks that can be covered by insurance companies and owners get compensated.
Sadam Mohamed the Operations Manager of Baraka Insurance said.
The main challenges we face in the insurance industry in Somalia are:-
- Lack of Knowledge and information about insurance in Somalia. It has taken some time to persuade people to take up insurance even at an affordable price though few take, but now things are changing slowly that we are working with the Government, Non- Governmental Organizations (NGOs), private sector, people from the diaspora, Small businesses and individuals both in formal and informal Sectors to increase the take up of Insurance,
- Also lack of reinsurance/retakaful companies in Somalia which insurance companies seek overseas reinsurance companies like Kenya Re, Qatar Re, Swiss Re, Malaysian Re and Munich Re. that do not accept some of the risks in Somalia.
“On February 2020 , Somalia Minister of finance Abdirahman Beileh Signed Multilateral Investment Guarantee agency (MIGA) with World Bank which Provides Political risk Insurance and Credit enhancement for private sector investors and lenders. Somalia Once again is a member of MIGA which Provides Great opportunities for Entrepreneurs, investors and growth of Insurance industry In Somalia “Said Sadam Mohamed.
Sadam also Said : Somalia is Headed in the right direction In terms of insurance he mentioned the insurance Bill (SOMALIA INSURANCE BILL, 2020) that THE FEDERAL GOVERNMENT OF SOMALIA through THE MINISTRY OF FINANCE AND CENTRAL BANK are now drafting first time Since 30 years after collapse of central Government this will help in Regulation And Supervision Of Conventional Insurance And Takaful Business In Somalia).
The object and purpose of this Law is to—
- Establish a framework for the regulation and supervision of the insurance and Takaful market in Somalia;
- Promote the development of the insurance and Takaful market in Somalia;
- Promote the maintenance of a safe, sound, efficient, fair and stable insurance and Takaful market in Somalia;
- Promote public confidence in the insurance and Takaful market in Somalia; and
- Protect the interests of the persons who are, or who may become, policyholders of licensed insurers/takaful operators and insurance/Takaful beneficiaries or customers of other licensees under this Law.
People looking at piles of cloths remaining after a fire broke overnight in Mogadishu’s biggest market, the Bakara Market, on January 11, 2019. (Photo by Mohamed ABDIWAHAB / AFP) (Photo credit should read MOHAMED ABDIWAHAB/AFP via Getty Images)
Somalia businesses lose up to $ 100 million a year due to fire outbreaks. The Bakaara Market (Suuqa Bakaaraha) is a good example this open market in Mogadishu, Somalia being the largest in the nation it experiences fires at least twice each year. On the night of 10 April [2004], a serious fire in the main Bakaara market in Mogadishu resulted in losses amounting to millions and millions. Since then Bakaara Market experiences a fire Twice or thrice each year.