In a transformative announcement signaling a new era of ambition and financial strength, Hibret Insurance Company, one of the country’s most trusted insurance institutions, has revealed a dual strategy focused on aggressive capital expansion and operational enhancement, supported by record-breaking financial results for the fiscal year.
The company’s 31st general assembly, characterized by strong shareholder support and a forward-looking vision, served as the platform for this significant declaration, approving an unprecedented capital acceleration plan within the Ethiopian insurance industry.
The assembly’s resolutions reflect a strategic masterstroke aimed at elevating Hibret to the top tier of industry leaders. This will be achieved by substantially reinforcing its balance sheet through a significant capital infusion, establishing a solid foundation for future growth, market penetration, and competitive dominance.
The capital strategy comprises a bold, two-phase approach. First, the company will promptly finalize the collection of the outstanding 98 million birr from a previously authorized 500 million birr capital increase, with plans for complete subscription by the first week of January 2026.
According to Meseret Bezabih, the company’s long-serving and successful CEO, this initial step leads to the core of the announcement: an ambitious plan to expand the total paid-up capital by one-third. This substantial increase will be executed within a remarkable timeframe of less than ten months, with a target completion date of October 10, 2026.
This accelerated timeline is a strategic response to current economic realities, positioning the company to act swiftly and seize immediate opportunities.
Upon successful completion of this capital program, Hibret Insurance will boast a strengthened paid-up capital base of 2 billion birr, positioning it among the largest and most financially robust entities in the insurance sector. This will convey a powerful message of stability and ambition to the market, its clients, and competitors.
Board Chairperson Wondwossen Teshome clearly articulated the rationale behind this aggressive capital mobilization.
He framed the decision as a critical strategic move in a dynamic and sometimes volatile macroeconomic environment.
“The value of the birr is facing persistent erosion, while foreign exchange rates show concerning volatility. In such conditions, prudent and ambitious corporate stewardship cannot afford a passive approach,” he stated. “We have made a conscious decision to strengthen our capital foundation without delay, acting now with speed and determination.”
“This capital increase is essential, not only as protection against inflationary pressures but also as the vital fuel needed for significant expansion of Hibret’s operational footprint, enhancing our service capabilities, and securing the company’s long-term competitiveness and market leadership,” Wondwossen emphasized, highlighting the proactive nature of the strategy.
This ambitious growth blueprint is strongly supported and financially backed by Hibret Insurance’s exceptional performance in the 2024/25 financial year, during which the company set new profitability records.
The most notable achievement was the first-ever profit before tax exceeding one billion birr in the company’s history.
This profit before tax surged by an impressive 79 percent year-on-year, rising from 563 million birr in the previous period to an astonishing one billion birr.
This remarkable profitability was fueled by outstanding top-line results, with gross written premiums across life, non-life, and takaful businesses increasing by 40.3 percent to reach 2.7 billion birr. The traditional non-life segment remained the primary revenue driver, contributing a substantial 2.58 billion birr of the total.
Additionally, this profit surge was achieved alongside a strong focus on operational efficiency and cost management, significantly enhancing the quality of earnings.
In contrast to broader industry trends, Hibret strategically reduced its insurance service expenses, excluding reinsurance costs, by nearly 10 percent, bringing them down to 1.2 billion birr.
This deliberate cost optimization resulted in a remarkable 77.6 percent increase in the insurance service result, which jumped to 765 million birr from 431 million birr.
The company’s investment arm also performed exceptionally, with net investment income rising by 38 percent to 544 million birr.
The final outcome for shareholders was equally impressive, as after-tax profit mirrored the 79 percent growth, reaching 843 million birr. This significantly boosted earnings per share (EPS) by 68.5 percent, a substantial 43 percent increase from the previous year’s strong figure of about 48 percent.
Meseret linked this historic financial achievement to the newly announced capital ambitions, creating a compelling narrative of reinvestment and cyclical growth.
“This exceptional financial success provides an ideal platform and strong rationale for the upcoming capital increase. We are confident that our shareholders, having witnessed the company’s ability to generate outstanding returns, will support this capital initiative,” Meseret stated, framing the capital call as a natural and strategic next step in the company’s growth trajectory.
A detailed analysis of business segment performance reveals a narrative of strategic portfolio management. While the core non-life business continues to thrive, the life insurance segment has undergone a strategic recalibration.
Despite a 39 percent reduction in generated premiums to 142 million birr, primarily due to losing a major customer to competitors, the underlying health of the segment has improved significantly.
Revenue from the life business rose by an impressive 72 percent to nearly 216 million birr, and net investment income increased by close to 34 percent to 78 million birr, indicating a successful shift towards more profitable and sustainable policy structures.
At the same time, the company reported promising developments in its emerging Takaful (Sharia-compliant) insurance business, which caters to a growing niche of customers and represents a strategic initiative for market diversification and inclusive product offerings.
