Friday, July 12, 2024

Claims lower for Global Insurance


Unlike the business trend Global Insurance Company, one of the oldest private insurers since the free economy was endorsed, indicated in their annual report that the claims incurred in the previous fiscal year were lower than the preceding year.
The insurance firm registered a ten percent higher gross written premium.
The annual report of Global Insurance indicated that in the 2017/18 financial year the total claims incurred were 38.7 million birr, which is 23 percent lower than the preceding period.
Usually there has been an increase in claims every year so this is a different result than normal.
In the 2016/17 fiscal year the total claims incurred at Global Insurance was about 50.6 million birr, which is the highest ever in its financial performance over the past 20 years.
The report added that the percentage of the gross claims incurred to gross written premiums also decreased from 61 percent to 47 percent in 2017/18.
Tibebe Tesfaye, CEO of Global Insurance, told Capital that in the reported period the insurance firm has taken several strict measures to reduce the claims.
“We have been applied a leakage control package and committee formed for check and balance mechanisms in terms of the settlement of claims,” he said. “It has helped us to control the claims strictly,” he added.
In addition, the insurance firm was prudently engaged in the mitigation of risks on underwriting  selection, according to Tibebe.
Global, which formed in 1997, has sold 25,838 policies worth 88.3 million birr. Even though the stated amount is 26 percent lower than the target it went up  by ten percent from the preceding year.
As the usual trend observed in the sector vehicle insurance generated the most premiums, followed by fire  and marine, engineering and pecuniary classes of businesses respectively.
From the total claims paid in the year the motor sector stood at 27.2 million birr which is 79.4 percent of the total claims. The motor sector has continued leading claims in all insurance companies and continues to be a high risk for the sector. To tackle the challenges the insurers association has been undertaking a study to mitigate the challenge.
Despite challenging economic conditions in the past fiscal year because of the political condition, lack of adequate hard currency and low exports and imports, Global Insurance has registered significant growth compared with the 2016/17 financial year.
For instance, in the reported period the insurance company has achieved an underwriting surplus of 19.9 million birr, which was 12.7 million birr a year ago.
For the year the company has earned gross profits of 25.3 million birr before tax, while the net profit after tax stood at 19.5 million birr.
Compared with the preceding period the insurance firm has registered a gross profit of 29 percent and net profit of 15 percent.
Due to the paid up capital increase  the earnings per share for the 2017/18 fiscal year stood at 98 birr, which was 112 birr a year ago.
The assets of the company has also increased by 13.5 percent in the ended fiscal year to 303 million birr from 267 million birr a year ago.

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