UNIC sets to expand its capital to grip the insurance market

United Insurance Company (UNIC) approves to expand its capital by two folds from the current half a billion birr. In similar alignments, the insurer has also agreed to include new potential investors in getting the firm’s stake.
At the 28th general assembly and 13th extraordinary meeting held on November 10 at Sheraton Addis, the board of directors stated that capital increment was crucial for the company’s future growth and competitiveness.
The board stated that premium earnings of the company are registering growths which similarly expanded the reinsurance expense. The board underlined that if the capital of the company was to be proportionate with the premium it would consequently reduce the expenses that goes to reinsurances.
It was also highlighted that the company’s capital should be in consideration of the reduction of the birr value against major hard currencies.
“Capital increment is vital in constructing additional buildings on the plots of land that the company owns, and in possessing additional plots of land in the capital to undertake further investments in other sectors,” stated Tsigereda Tesfaye, Vice Chairperson of UNIC Board.
She stated that the upcoming stiff competition in connection with the opening up of the financial sector makes capital increment a necessity, “Strong capital positioning gives the company an advantageous edge in facing new incidents like mergers or being partnered with potential foreign players.”
As per the agreement, out of the additional one billion birr capital, 850 million birr will be bought by current shareholders and will be fully paid in three years time. The remainder however, will be sold to new potential shareholders and UNIC’s senior staffs.
Based on this, 64 staffs will acquire 50,000 birr worth of shares each which total 3.2 million birr.
New potential customers that are 23 in total are said to take the remaining amount at 30 percent premium.
Most of the selected potential shareholders are UNIC’s major customers.
The new share holders are expected to settle the total sum within a period of four years.
In the 2021/22 financial year, UNIC attained massive growth in its operation.
According to the annual reporter, the company was able to amass a gross written premium of 954 million birr which is an expansion of 30.4 percent when compared to the preceding year. From the stated amount, almost 861 million birr was secured from general insurance while life insurance’s contribution was 93 million birr.
Even though all classes of business recorded growth during the period, the aviation class of business increment was extraordinary registering growths of 908 percent.
According to the annual report, motor insurance continued to constitute the upper position with regards to premium portfolio with a share of 57 percent, with slight reductions when compared to 59 percent of shares in the financial year of June 2021.
In the past couple of years, the motor class of business share has declined which the insurer appreciated. “The decreasing trend in motor portfolio is encouraging and consistent with the company’s strategy of maintaining a healthy balance between the various classes of business considering their relevant contributions to the company’s underwriting result,” UNIC’s annual report read.
The life insurance business has also expanded by 30.5 percent with regards to premium earnings.
In the year, the company’s net income reached 427 million birr up from 352.5 million birr, from a year back.
The underwriting profit also increased by 17 percent to stand at 247.8 million birr from 212 million birr of the previous reporting year.
Similarly, the insurer’s profit before tax stood at 206.5 million birr with increments of 21.5 percent from the preceding year; while the profit after tax grew by about 25 percent to reach 181.5 million birr from 145 million birr.
According to the annual report, the earnings per share showed an increment of 17 percent.
The company assets now stand close to 2.2 billion birr which is a 19.2 percentage jump from the previous year while the liability for the reporting year was 1.2 billion birr which makes UNIC’s total equity stand at 924 million birr.

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