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Africa Insurance Company registered impressive achievements during the 2017/18 fiscal year, despite economic challenges in the insurance sector.
African Insurance is one of the oldest private insurance companies and one of the three most profitable. They amassed 585 million birr from life and general insurance premiums.
Africa was formed 24 years ago. It has been able to collect over half a billion birr in premiums. During the 2016/17 fiscal year they earned 553 million birr from general and non-life insurance premiums. A year ago that figure was 494 million birr. “The growth of general insurance for the year stood at 12 percent,” Kiros Jiranie, President of Africa Insurance, said.
The company collected 32 million birr from life insurance, an increase from 27 million during the 2016/17 fiscal year.
In the reported year the company settled 391 million birr in claims, which is a 16 percent increase. A year ago Africa Insurance settled 314 million birr claims for general insurance.
From the underwriting result the company generated 70 million birr with 41 percent increase while the investment income has also grown. The investment income mainly incorporated via interest and other investments contributed 28 million birr and 46 million birr respectively.
Before tax and after expenses the insurance firm earned 51 million birr which is an increase from 37 million birr in 2016/17 fiscal year.
The company’s net profit after tax will be 44 million birr which is a high amount of growth when compared with 35 million birr a year ago.
The earnings per share have reached at 25 percent with 19 percent growth, according to the President of Africa Insurance.
The insurance sector has been dominated by the central market that the Addis Ababa premium collection is taken 70 percent of the sector and the balance is goes to regions.
The class of business that dominate the sector is motor, which is at some point enforced by the government in related with third party and also the accidents alerts the society to be insured.
Due to reduction of construction in the year the engineering class of business and pecuniary has reduced, while it has showed some growth. In related with the hard currency shortage the marine insurance business has declined at the stated period. The situation has forced the sector more stiff and competing between the insurers on price.
Kiros, who is the former head of the Association of Ethiopian Insurers, says that lack of awareness in the society means that the county has not been able to collect the required premiums proportional to the population and the economy. He thinks insurance companies need to become more creative in developing products and raising awareness. He also wants the government to help promote and undertake studies via actuaries to expand the life insurance business, which is common in other parts of the world. “Insurance companies may focus on the short term target to make a profit but the government can look at the big picture,” he added.
The premiums collected by insurers is considered one of the major sources for investments, however it is limited when it comes to Ethiopia because the sector has not been growing. Kiros says that his company is one of the top three private insurers excluding the state giant Ethiopian Insurance Corporation which dominated the sector at 35 percent in terms of premium market share.
Kiros claimed that his company’s assets have grown to over one billion birr. For the current year the company will move its headquarters a building which has 12 stories and thee additional basements for parking which was constructed at a cost of 160 million birr in the Japan area at African Avenue (Bole Road). The company also has a building at Bisrate Gabriel which cost 200 million birr.