This paper attempted to analyze efficiency and productivity growth ofrnEthiopian insurance industry in the period 1996-2005. Towards this aim,rna three-stage analysis is carried out. Firstly, a Data Envelopment Analysisrn(DE A) approach is used to estimate technical efficiency scores. Secondly,rnDEA-based Malmquist indices are calculated to analyze productivity of thernindustry. Thirdly, a Tobit regression analysis is carried out to identify thernreasons for the differences existing among the insurers in terms ofrntechnical efficiency. The inputs used are labor, business service andrnmaterial, dept capital and financial capital. The outputs used are earnedrnpremium and investment income. The results indicate that the overallrntechnical efficiency of the general insurance market was found on averagern80.50 and 93.20 percent under assumption of constant return to scalernand variable return to scale. The average scale efficiency for the sample •rnperiod was 85.50 percent. The result of Malmquist productivity analysisrnrevealed that the industry analysis showed that the industry the industryrnexperienced productivity deterioration over the sample period, with anrnaverage decline of about 5 percent. The productivity decreased due torntechnological regress. Finally, a second-stage analysis highlights thatrntechnical efficiency appeared to be closely related to the company size,rnloss ratio and solvency ratio, partly explain inter-company differences inrnefficiency. To improve efficiency and productivity of the industry humanrnresource development, revising minimum capital requirement andrnprudential regulation of supervisory authority could be important.