Abay Insurance Company, one of the mid age insurer, surpasses projected profit targets for the 2021/22 financial year.
In its annual report, the insurer highlighted it attracted massive success in its operation despite slight reduction in the life business sector, which more often than not is performed poorly in the sector.
In the financial year, the firm’s total premium production expanded to 424 million birr drawing increments of 17 percent in comparison to 362 million birr of the preceding year.
From the total gross written premium, 11.3 million birr was secured from long term insurance business, while the rest went to general insurance class of business; and of that, the motor class took the largest chunk as is the norm in the sector.
Regarding claims, during the 2021/22 financial year, the total net claim incurred of general insurance was 134.3 million birr which increased by almost 19 percent in contrast to the year prior.
Similarly, the net claim paid in the year has increased by 12.5 percent to reach 102.4 million birr from 91 million birr a year ago.
In the year, the overall claim ration dropped by 3.6 percent to stand at 53.7 percent. The report stated that in the reporting period the net earned premium with respect to non-life insurance business for the year 2021/22 was over 250 million birr.
Similarly, the underwriting surplus attained almost 149.5 million birr, which in retrospect of the year prior is an expansion of almost a third.
“This achievement is due to the implementation of prudent underwriting practice and utmost professionalism,” the report of Abay Insurance cited acknowledging the success.
For the year, the company also grasped massive success in connection with investments aligned with different involvements including interests secured from time deposit. The insurer’s investment return was 70 million birr which is a 50 percent growth from last financial year’s performance.
The non-life insurance business continues to thrive as almost 114 million birr in gross profit was recorded, which is a 50 percent increase from 75.5 million birr in the 2020/2021 financial year. The gross profit has also surpassed by 15.4 percent in comparison to the targets set by the insurer.
The company projected to secure almost 99 million birr in gross profit for the year from the specific business wing, which is the most profitable sector in the industry in Ethiopia.
In general for the year, the company has secured 105 million birr profit after tax which is a 54.4 percent boost in contrast to 68 million birr in profits of June 30, 2021.
The profit increment has allowed the insurance company to secured 24 percent higher earnings per share (EPS) growth for the year under review. According to the annual report, the year’s EPS stood at 31 percent from 25 percent a year ago.
The growth in asset has also been the other success that the company secured for the year. In the year ended last June, the company’s asset expanded by almost 41 percent to cap at 1.5 trillion birr with the general insurance assets constituting 64 percent, followed by fixed asset and share investment.
At the end of the reporting period, the company’s paid up capital reached 361.2 million birr with 29 percent increment. However, the total shareholders’ funds at the period have surpassed half a billion birr to stand at 505 million birr.