Nile Insurance, one of the long established insurers since the sector opened for private operators, has registered massive success in the past financial year with profits bulging by 43 percent.
In the 2021/22 financial year that closed June 30, the company registered a positive performance in all aspects primarily on investment income while expenses like paid claims continued on a regular rise.
The general insurance premiums in the reporting period also expanded by 33 percent reaching 715 million birr up from 539 million birr in the preceding year.
Gross claims paid in account of the general insurance increased by 23 percent from 215.6 million birr of June 2021 to 265.7 million birr in the past financial year.
For the fiscal year under review, after reinsurance recoveries, the net claims paid amount stood at 244.5 million birr.
Claims incurred in the year have jumped by 46 percent from 199 million birr in the 2020/21 financial year to 291 million birr in 2021/22.
According to the annual report the loss ratio under general insurance for the period under review was 58.3 percent from almost 52 percent in the preceding year.

“The rise in spare parts costs of some new brand vehicles, repeated theft cases of vehicles, high frequency of claims for heavy trucks together with the significant rise in cabin change costs and others contributed for the rise in claims,” the report explained.
In the year, the underwriting surplus increased by 15 percent compared with the previous year and stood at 222.6 million birr.
In the long term aka life insurance business, the gross written premium rose by 15 percent towering at almost 67 million birr. The amount in the sub insurance business for the year was noted to be one of the biggest in the sector.
The company investment income grew by 59.2 percent to reach 146.3 million birr from 92 million birr a year earlier.
“Dividend obtained from the Bank of Abyssinia and Etho Re substantially rose by 132 percent from 30 million birr in 2020/21 to 69.3 million birr to the reported year,” the annual report explained how the investment income expanded dramatically.
In the reporting year, Nile amassed 227 million birr in profit before tax which is an increment of 43 percent compared with the performance a year ago. In the 2020/21 financial year, the company profit before tax was 158 million birr.
In similar trend, the profit after tax reached 197.5 million birr from 134.2 million birr of a year ago.
For the year, the earnings per share (EPS) increased by 22 percent and stood at 33.9 percent for par value of 1,000 birr which makes it one of the biggest in the sector.
The total asset of the company has increased by 30 percent to sit at 2.6 billion birr, while it’s paid up capital has increased by 29 percent capping at 646.4 million birr from 500 million birr a year ago.

Wegagen Bank’s provision expense has shown sharp reduction in the past financial year.
The year that ended on June 30, has seen the financial powerhouse netting in four folds in profits which catalyzed its recovery from previous year’s poor performances.
From the 2021/22 financial year report that the bank unleashed a few weeks ago, the bank finances highlighted that its deposit mobilization elevated by 2.4 billion birr to sit at 33.9 billion birr which is an eight percent increase compared to the preceding year.
As usual, the savings deposit took the lion’s share of the mobilization with 61 percent, followed by demand deposit which constituted 28 percent, while the deposit account stood at about 2.3 million with an unusual drop of 2.6 percent from the year prior.
“The decrease is attributable to the regulatory body’s directive of clearing customer’s account information and merging different accounts of the same person under one customers ID number,” the annual report explains.
Regarding the interest free banking segment, the bank’s outstanding mobilization stood at 1.6 billion birr with five percent increment while the sector financing leveled at 339 million birr.
The outstanding loans and advances rose by 2.9 billion birr or 11 percent in a single year to stand at 30.3 billion birr.
The investment in Treasury bills and other securities of the bank reached 4.3 billion birr at the end of the reporting period making the total loans and advances of Treasury bill and debt financing to stand at 34.5 billion birr as of June 30.
In the year under review, the bank’s asset increased by 9 percent to reach 43.1 billion birr while the paid up capital bulged to 3.4 billion birr.
In this period, Wegagen amassed 5.1 billion birr of which interest income from loans and advances contributed to 73 percent for the inflow.

A rare occurrence for the sector saw Wegagen’s expense for the year remarkably shrink compared to the 2020/21 financial year. The annual report indicated that the total expense had dropped by over six percent or 300 million birr from 4.8 billion birr a year ago to 4.5 billion birr.
“The decrease is primarily due to a huge reduction in provision expense following improved loan collection,” the annual report justified and added the cost management practice that the bank undertook contributed for the result. For the year, provision expense plummeted by 101 percent, while expense on interest took 40 percent of the total expense. The amortization intangible assets and staff salary and benefit increased by 23, 24 and 7 percentages respectively.
In the reporting period the bank was in a good position to mitigate challenges that it faced a year ago, leading to profit attainment. As a result the profit before tax for the financial firm rose to 572 million birr which is an almost three times increase from 193 million birr a year ago.
“Despite a myriad of challenges occurring during the reporting period and a year before, the bank recovered and rebounded on its growth trajectory,” the report read.
The profit after tax stood at 551.4 million birr that increased by 435 percent in contrast to 127 million birr from the previous year.
Similarly, for the year in review, the earnings per share inclined by four folds reaching 16.6 percent.