Ethiopian Reinsurance suffers 60m birr loss

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In its first year of operation Ethiopian Reinsurance (Ethiopian Re) lost 60.9 million birr.
The company, which began operating a year and half ago, held its second general assembly at Hilton. During the meeting with shareholders the company leaders declared their losses.
They said that the reinsurance firm has been engaged in establishing and hiring professionals. Even though it lost money they registered 519.8 million birr in gross premiums.
The report stated that from the total premiums, 194 million birr or 37 percent was generated from compulsory treaty cession. The major premium earning or 62 percent came from compulsory policy cession. The premium registered from compulsory policy cession was 322 million birr, while about 4 million birr worth of premiums were written under facultative voluntary cession from local markets, according to the report.
The annual report stated that the general insurance sector made up over 96 percent of their business, while the three percent of premiums were secured from life business.
The motor sector has taken the lion’s share from the total premiums at 228 million birr, followed by fire and marine policies at 67 and 61 million birr respectively.
For the year the company has paid 82 million birr for claims, 122 million birr in ceding commission and 45 million birr in profit commission.
The company also stated that it wants to be rated by international rating firms to be competitive on the international market and to write foreign business, which is considered a means of hard currency earnings for the company.
The company officials stated that until last October it was engaged in organizing offices and assigning staff.
The board of directors and head of the company has explained about the performance of the company for the stated year.
Shareholders that are mainly financial firms claimed that a lot of idle funds were not included as a most profitable time deposit. The report stated that 263 million birr was put as cash and the 238 million birr is owned by the Commercial Bank of Ethiopia (CBE), which is one of the two major shareholders at the Ethiopian Re. Shareholders said that that the company will engage in other investments during the year.
Yewondwossen Etefa, CEO of Ethiopian Re, said that the report reviewed the performance of the fiscal year that ended on June 30, 2017. “Currently the time despots have substantially changed because collections are now growing,” he added. He said that time deposit is considered as investment.
From the total written premiums, insurance companies have allocated 30 percent for the purchase of reinsurance. The National Bank of Ethiopia directive made insurance companies pay five percent of every premium for the Ethiopian Re.
Ethiopian Reinsurance SC was established with a paid up capital of 500 million birr and one billion birr subscribed capital.