Nile Insurance's financial year concluded on a high note, posting an impressive performance, with premium collections exceeding industry averages and delivering substantial returns to its shareholders.

The firm posted a 51pc surge in net profit, reaching 298.3 million Br, positioning itself firmly between its peers: United and Nyala insurance companies. Under the managment of Nigus Anteneh, its chief executive officer (CEO), the firm attributed its success to soaring premium revenues, headed claim expenses, and robust investment income. Despite facing inflation-driven claim costs and fierce market competition, Nile Insurance saw a 30.1pc increase in gross written premiums and a 52.2pc rise in investment income.

Mehari Alemayehu, the board chairperson, was upbeat about the company's performance while addressing an annual general assembly held at the firm's semi-finished headquarters in the financial district, on Ras Abebe Aregay Rd.

Nile Insurance's net profit reached 298.3 million Br, placing it 30 million Br short of the profit United Insurance posted for the operational year 2022/23. Its earnings per share (EPS) stood at 39.6pc, surpassing the private insurers' average five percentage points and Nyala Insurance's 35.4pc, though trailing behind United Insurance's 47.9pc, the highest in the industry.

Such profit growth after tax was mainly driven by a substantial increase in gross written premium, fees, commission income, and a surge in investment income. Gross written premium, including Takaful, was 55 million Br shy of a one billion Birr mark. The firm’s “Aman Takaful” business, which allows members to pool funds to cover each other's losses, claimed eight percent shares in the niche market, trailing behind Global Insurance’s 45pc, Awash Insurance’s 31pc, and Oromia Insurance’s 16pc.

Despite ceding 23pc of these to reinsurers, a slight increase from last year's 24.3pc, Nile Insurance maintained a commendable premium retention level, according to Abdulmenan Mohammed (PhD), a financial analyst based in London. He praised the performance, attributing the success to effective management.

The growth in premiums and retention came alongside increased claims, with net benefits and claims rising by 35.5pc to 443.37 million Br. It exceeded last year's industry average of 341.1 million Br and surpassed Nyala's 370.81 million Br, although it was below United Insurance's 463.54 million Br. The CEO attributed the rise in claims to the escalating costs of spare parts due to the inflation rate but sounded confident that the company has stringent measures to prevent claims leakage.

"We maintained the ratio below the regulator's minimum requirement," he told Fortune.

Despite facing price-based and what its executives grumbled was "unethical practices", Nile Insuarcne's investment activities thrived. Rent, dividends, and interest incomes soared by 52.2pc to 222.62 million Br. The firm earned 74.44 million Br in fees and commissions, a 32.6pc increase from the previous year. However, underwriting expenses also rose by 51.5pc to 64.39 million Br, with operating costs climbing. Wages and benefits soared by 29pc to 139.46 million Br, and other operating expenses reached 67.79 million Br, exhibiting an increase of 27.5pc.

Experts recommend better management of claims and growing expenses.