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The United Insurance Company SC (UNIC), one of the oldest insurers since the free economy was endorsed in Ethiopia, recorded an increase in its profits last fiscal year.
The general assembly has also elected two new board members replacing those rejected by the National Bank of Ethiopia (NBE).
The insurance firm, which was established about 20 years ago has earned 77.6 million birr in gross profits this past fiscal year. That figure was 74.8 million birr in the 2012/13 fiscal year.
The annual report of UNIC indicated that the company registered 62.6 million birr net profits after tax; the preceding year, it was 59.8 million birr.
According to the report, in the past fiscal year that ended on 30 June 2014, the company’s non-Life premiums reached 274.3 million birr, recording a respectable increase of 10.2 percent over the previous year. The national growth rate for the sector is only 4.2 percent.
The engineering department of the company achieved the highest growth, nearly 63.4 percent (from 22.6 million to 37 million birr) for the year followed by the “group of small premium” classes with a growth rate of 49.7 percent (from 22.6 million to 33.8 million birr).
The strong rate of growth of 34.1 percent achieved by the marine and inland transit class of business during the year under report (from 8.7 to 12) was an encouraging development when compared to the negative growth of 32.6 percent it recorded the year before.
The report indicated that fire and accident insurance recorded what may be considered a relatively robust growth rate of 23.5 percent (from 10.8 million to 11.7 million birr) compared to a similar rate of 5.9 percent the previous year.
The company’s motor business recorded a repeat performance increase of 11.5 percent (from 144 million to 160.5 million) during the year under report. Continuing the fast slide of 44.5 percent it recorded the previous year, the pecuniary class fell by yet another 55.5 percent (from 40 million to 17.8 million).
Motor/Auto shares were 58.50 percent of the company’s total gross premiums written as at 30 June 2014 made it the predominant business of the company.
In the year under report, the company’s over all claims dropped from 54.5 percent as of 30 June 2013 to 52.3 percent in the past fiscal year, while the market average is 65 percent.
On the life business the company’s written premiums reached 22.8 million birr. The company’s Long Term Insurance premium income grew by a robust 40 percent to reach 22.8 million compared to 16.3 million birr as of 30 June 2013. The consolidated premium income (life and non life) for the year under report, therefore, stood at 297 million birr.
The 80.8 million birr underwriting surplus produced by the company’s non-life business was only 0.9 percent more than that of the previous year. “While this was augmented substantially by incomes from both interest and dividends, the most significant relative contribution came from rent income (5,408,212 birr in 2013/14 against 491,067 birr in 2012/13) from the new landed property near Bole Medhanialem acquired last year via auction from United Bank,” the report mentioned. According to the report, the total income of 110.3 million birr as of 30 June 2014 was 7.1% higher and compared with that of 103 million birr as at 30 June 2013.
For the year the earning per share has stood at 547.66 birr.
The general assembly of UNIC, one of strongest private insurance firms, has also been discussing about expanding the company’s paid up capital to 175 million birr from the current 125 million birr.
By the end of June 2014 the company had nearly a 6% share of the national insurance market. This was welcome news after four straight years of decline (from 6.9% in 2010 to 5.5% in 2013). Its actual premium growth was not in line with the rest of the industry in that, except during the financial year that just ended in June 2014, when it registered a growth rate of 10.2%, against the industry’s 4.2%, UNIC had generally been growing much more slowly than the rest of the industry.
Following the latest directive of NBE that forced insurance firms to exclude their employees from the board of directors, the general assembly of UNIC has replaced Meseret Bezabih, CEO of UNIC, and Assefash Abate, member of the management.
The Directive Number SIB/37/2014 titled “Limits on Board Remuneration and Number of Employees who sit on the Board of an Insurer Directive No. SIB/37/2014”, has also limited the board members remuneration to 50,000 birr and the transport allowance to 2,000 birr. A similar directive has been applicable in the banking sector since January 2011.