Lion Insurance registered a substantial growth in profit in the last fiscal year, netting 42.9 million Br, a 44pc growth from the preceding year.

The firm's earnings per share has reached almost 10 Br, up from 9.44 Br. At the same time, Lion’s paid-up capital has risen by 27pc to 118.14 million Br.

Despite the challenging and competitive insurance environment, Lion's performance is commendable compared to its planned targets as well as its performance the preceding year, according to Gebru Meshesha, board chairperson of Lion.

"It was the most challenging year ... from the evident slowdown of the economic activity mainly due to the recurrence of instability in some parts of the country," he remarked in his message to the shareholders.

An increased retention rate and massive growth in investment income were the main factors for the growth in profits after tax.

Negassi Yoseph (PhD), CEO of Lion Insurance, also attributes the increase of underwriting results and investment income to the growth in profit that was registered last year.

During the reporting period, the company’s gross written premium has shown an increase of seven percent to 376.8 million Br. Out of the total gross written premium, Lion ceded 20pc to reinsurers. The retention rate at Lion increased by six percentage points to 80pc.

Lion’s income from investment activities increased considerably in the reported year. Interest income went up by 84pc to 25.2 million Br and dividend income grew by 72pc to 7.5 million Br. It also earned a commission of 21.1 million Br from reinsurers, five percent higher than the proceeding year.

Despite the increase in gross written premium and retention rate, the claims of Lion went up by a modest figure of eight percent to 181.6 million Br.

"This indicates that claims were well controlled," said Abdulmenan Mohammed, a financial analyst with close to two decades of experience. "Lion should maintain this practice."

Negassi says that the company used a different mechanism to save costs in relation to leakages by reaching accident sites quickly.

The management closely followed up on claims to control leakage by keeping a close eye on garage activities, survey activities, spare parts utilisation, staff integrity and taking timely measures when it was necessary, according to the CEO.