Ethiopian Reinsurance (Ethio Re), the only indemnity organization in the insurance sector, reported a 29% increase in reinsurance income for the financial year.
Established by a combination of public and private enterprises, as well as individual stakeholders in the industry, Ethio Re is the only local provider of additional coverage in the country. In the 2023/24 fiscal year, the company generated 2.2 billion birr in income from both domestic and foreign clients.
Founded in 2016, Ethio Re’s annual report indicates that its income for the reporting period rose by 502 million birr, representing a 29% increase compared to the previous fiscal year.
Additionally, the company’s earnings from investments and other sources during the reviewed period amounted to 317.7 million birr, an increase of 18% over the same period last year.
According to the annual report presented to shareholders a few weeks ago, the company’s reinsurance service expenditures reached 2 billion birr. This amount reflects a rise of 34.5 million birr, or 2%, compared to the same period last year.
Ethio Re’s reinsurance service results for the reporting period showed a profit of 154.2 million birr, which is 174 million birr higher than the performance during the same period the previous year.
The company reported an after-tax profit of 391 million birr for the reviewed period, marking a 60% increase, or 146 million birr, over the previous year. The performance report indicated that the earnings per share (EPS) for the year reached 21.7%, the second-highest level since the company’s inception, with a par value of each share set at 10,000 birr.
This year, Ethio Re generated a profit before taxes of 424.4 million birr, an increase of 195 million birr from the 2022/23 fiscal year.
In August 2024, AM Best assigned Ethio Re a stable outlook, along with a Financial Strength Rating of B (Fair) and a Long-Term Issuer Credit Rating of “bb” (Fair).
Furthermore, Ethio Re reported that, in line with its strategic goals, it has reaffirmed its credit rating from Global Credit Rating (GCR) for the third consecutive year, receiving a National Scale (ET) AA (Double A) rating with a Stable Outlook.
As the only reinsurance company in the country, Ethio Re has a paid-up capital of 1.96 billion birr and subscribed capital of 2.5 billion birr.
The company has secured 1,585 square meters of land from the Addis Ababa Land Bureau for the construction of its headquarters for office and investment purposes. It is currently in the final stages of purchasing a building.
The government holds a 40% stake in Ethio Re through state-owned financial institutions, including the Commercial Bank of Ethiopia (CBE) and the Ethiopian Insurance Corporation (EIC), while the remaining shares are held by a mix of private financial institutions and individual investors.
As of June 30, 2024, the company has 127 shareholders, comprising seven banks, 17 insurance firms, 102 individual owners, and a labor union.
