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The general assembly of Nyala Insurance SC (NISCO) announced plans to more than double their paid up capital from the current 125 million birr.
This past year has been good for one of the strongest insurance companies in Ethiopia as their growth remained strong.
At the general assembly, held on Tuesday November 18, at the Sheraton Addis, NISCO’s shareholders agreed to expand the company’s paid up capital to 300 million birr, which will make it one of the leading insurers in terms of capital strength.
A year ago the company decided to expand its capital to 125 million birr, from 35 million birr the preceding year. This decision came about as a result of actions the company took to increase the firm’s capability to bring in more money.
NISCO has significantly increased its market share to 6.2 percent in the past fiscal year. The company earned 77.8 million birr in pre-tax profits during the 2013/14 fiscal year. Their net profits (after tax) stood at 66.1 million birr for the past fiscal year and the earning per share stood at 1,396 birr.
Last fiscal year, the insurance firm provided 98.5 billion birr worth of life and general insurance. This means that their coverage for these two types of insurance grew by four billion birr or four percent when compared with 2012/13.
The total amount of money NISCO earned from premiums was 307.3 million birr, which is a growth of 14 percent compared with the preceding year.
The gross written premiums in the general insurance sector stood at 266.3 million birr, which registered a growth of nine percent compared with the previous year.
Auto insurance took the majority of that with a 42 percent share of the market. This was followed by engineering, marine and fire insurance at 13, 12 and 11 percent respectively.
Meanwhile, incurred claim increased by 31.5 percent from 69.5 million birr to 91.4 million birr in the 2013/14 fiscal year.
The company’s life insurance grew by 53 percent which is significant because that type of insurance has not been performing well recently, say pundits.
“Based on our strategic plan for the current fiscal year life insurance is expected to grow significantly,” Yared Mola, CEO of NISCO, said at press conference held after the general assembly.
From the total 181 million birr in expenses, 62 percent of that went to pay claims. Car accidents and the price of spare parts have been on the upswing and that has affected insurance. Still for NISCO their loss ration for auto insurance did not exceed 54 percent.
The industry average loss ratio for auto insurance is 65 percent.
Currently the insurance firm is offering micro insurance coverage for farmers in Oromia, Amhara, Tigray and SNNP regions.
“During the current fiscal year we have a plan to expand micro insurance in one another region and expand the coverage into livestock,” Yared added.
The total assets of the company reached 618 million birr which is a growth of 142 million birr or 30 percent.
NISCO is adding and renovating service centers (branches). It has 16 in Addis and 9 in other regions. There are plans to open 15 new service centers based on its strategic plan that will end within 5 years.