Records 558% increase
Oromia Insurance Company (OIC), one of the country’s youngest private insurance firms, registered 239% higher gross profit in the past fiscal year.
The company that was established about four years ago has earned 28.1 million birr profit before tax in the 2012/13 fiscal year.
OIC’s report presented to the general assembly held yesterday indicated that the insurance firm has earned 20.2 million birr net profit after tax and legal reserve, which is a record increase of about 558%.
During the year, the company’s gross written premium grew from 156.5 million birr in the 2011/12 fiscal year to 193.4 million birr in the 2012/13 fiscal year.
The net earning premium grew to 142.4 million birr in the reporting year from 102.5 million birr during the previous year.
According to the OIC report, net incurred claims rose by 23% to 91.7 million birr from 74.6 million birr in the previous year.
From the gross claims incurred, the motor class of business accounted for about 88% in the past fiscal year compared to the 93% of the preceding year, while motor made up 89% of the net claims incurred in the reporting period as compared to 93% in the previous year. OIC’s report indicated that the company’s total incurred claims as of June 30, 2013 stood at 107.7 million birr which grew by about 36% as compared to 2011/12.
With a growth of 97%, the underwriting result for the year ending 30 June 2013 was a total surplus of 32 million birr.
According to Oromia Insurance’s report, the company attained almost all plans set out at the beginning of the year (2012/13), except premium production target which exhibited a 10% shortfall, excelling in some performance indicators like decline in claims ratio, controlled costs and attainment of record high profitability, by far higher than the plan and of course than the previous year.
Oromia started micro-insurance activities in December 2009 with the objective of delivering micro-insurance products primarily to farmers’ cooperatives who are mostly OIC’s shareholders with over 1.3 million individual farmers.
OIC has been selected as a research partner by different institutions that drive the ideas of micro-insurance forward. As of June 30 2013 the total number of OIC shareholders was 565 and the authorized and subscribed capital of the company was 200 million birr and 85.3 million birr respectively.
According to the insurance firm’s statement, the paid up capital of OIC has grown to 42 million birr as of the end of the past fiscal year, while the total assets of the company has reached 262.2 million birr with a growth of close to 41% from 185.7 million birr in the preceding year. OIC’s market share has remained the same as last year with 4.3%. The company has 24 branches and three contact offices, and out of the total number of the branch offices 15 are in Addis Ababa