National Insurance Company of Ethiopia (NICE) S.C., increased its earnings per share (EPS) to 547 Br in the 2014/15 fiscal year up from 439 Br the previous year; the year has saw its profits soaring by 76.3pc to 28.03 million Br.
This is the first reporting year under the new CEO Tesfaye Debella, successor to Habtemariam Shumgizaw, who had been the boss for 20 years, until October 2014.
NICE, which engages in general insurance only, also reported increasing its paid-up capital to 54.9 million Br, up by 21.3pc from the previous year. The company has since then further increased it further paid-up capital to 60 million Br, the minimum required by the National Bank of Ethiopia for general insurance, said Tewodros Bogale, deputy CEO.
Gross written premiums increased by 7.1pc to 161.7 million Br, but the company has paid less money to re-insurers, down from 28.3 million Br the previous year to 23.3 million Br. Claims and policyholders’ benefits have increased by 11.6pc to 72.9 million Br, the report indicated.
Income from investment activities has increased by 21.8pc to 14.7 million Br. The company has invested in different banks such as Nib International Bank S.C., Bank of Abyssinia S.C. and Zemen Bank S.C. Nevertheless, income from commissions earned has declined by 13.5pc to 6.5 million Br while other income has dropped by 75pc from 1.1 million Br to 283,395 Br. NICE has incurred operating and other expenses of 34.1 million Br, up by 21.6pc. Its commission expenses have remained the same at 10.5 million Br. Total assets of NICE have increased by 10.3pc to 280.7 million Br. From this, 135.1 million Br has been invested in interest earning time deposits, and 27.1 million Br in shares.
Currently, the capital and reserve of the company represents 32.2pc of its total assets. This indicates that NICE is well-capitalized insurance company.
The company’s liquidity level is higher than most insurance companies, said Abdulmena Mohammed, a financial analyst working as an account manager for Portobello Group Ltd, based in London, suggesting the need to invest some of its liquid resources so it can bring more income. Cash and bank balances represents 18.6pc of total assets and 27.4pc of total liabilities of NICE.
As of this year, the company has planned to increase its paid up capital to 100 million Br, which will cause a decrease in EPS. It will avail 28 million Br worth of shares for an existing 35 shareholders, to be distributed according to the number of shares they have, while shares to the value of 20 million Br will be available to new shareholders.
Construction of NICE’s headquarters building could begin this year on the 1,825sqm plot of land around Tewodros II, the Deputy CEO, Tewodros, said. Architectural design is already complete, with structural design still in process.
NICE has 22 branches, with eight more to be opened this year.