By our staff reporter
During the last fiscal year, Lion Insurance Company made the decision to increase its capital to 1.2 billion birr due to its impressive growth in premium income. The company experienced a significant boost in revenue, with a 78 percent increase in the general insurance sector, reaching 823 million birr, and a total of 827.4 million birr from the life insurance sector in just four months.
In terms of total premium income, the company reported 363.4 million birr for the fiscal year, which is a remarkable 78.3 percent increase compared to the previous year’s 464 million birr. This growth rate surpasses the industry average of 37.5 percent, as per the company’s data.
According to reports, Lion Insurance Company retained 628.6 million birr from the total general insurance gross written premium income (GWPI) of 823 million birr, while ceding the remaining 194.4 million birr to reinsurers through various reinsurance arrangements. For the life insurance business, 969 thousand birr was ceded to reinsurers out of the 4.4 million birr GWPI, with the rest being retained.
Abrham Gebreamlak, the chairperson of the Board of Directors, revealed that the company paid a total of 292.8 million birr in compensation during the fiscal year. Additionally, they achieved 153 million birr from underwriting results and recorded a profit of 75.6 million birr before tax, marking an 18.3 percent increase compared to the previous year.
The company’s total assets have now reached 2 billion birr, leading to the decision to increase capital to 1.2 billion birr during the 7th emergency general meeting held on December 30, 2023. The net profit after tax for the company reached 70.6 million birr, as stated in the report.
Lion Insurance Company faced several challenges during the year, including an increase in bond compensation requests, a rise in vehicle accidents, foreign currency shortages, inflation impacting the cost of spare parts and maintenance, and the resultant impact on cash flow.
The chairman noted that the insurance sector has experienced a shortage of skilled manpower due to the need for expansion and the pressure to provide better benefits and wages, leading to a demand for a stable workforce.
The company’s total debt for the last financial year, including insurance contract debt, accounts payable, profit tax debt, and future deferred profit tax debt, amounted to 1.6 billion birr, indicating a 68.5 percent increase compared to the previous year.
