Despite losing the most-profitable position to its nearest competitor Nyala, Awash Insurance continues to lead the industry as the most capitalised firm.

In the last fiscal year, the company had a remarkable increase in profit, netting 147.6 million Br. Its nearest competitor Nyala Insurance netted 69.5 million Br in profit, giving it the leading position in the industry.

Despite the increase in profit, Awash's earnings per share (EPS) slipped by 17pc. The EPS fell by 40 Br to 190 Br, owing to a massive injection of fresh capital. Despite the reduction, the EPS of the firm remained strong.

Last year, the firm boosted its paid-up capital by 53pc to 425.2 million Br. Awash's paid-up capital is the highest in the industry followed by Nyala Insurance, which registered 416.5 million Br capital in the last fiscal year.

The management should have a capitalisation policy that maximises the returns of the shareholders, said Abdulmenan Mohammed, a financial analyst with close to two decades of experience.

An increase in gross written premium, a stable level of premium ceded, and an increase in investment income helped the company to sustain profit growth.

During the reporting period, Awash did well in the general insurance business and with its investment activities. Its underwriting surplus increased by 22pc to 271.1 million Br. The increase in underwriting surplus is due to a reasonable increase in gross written premium and a modest increase in claims paid and provided for.

Gudissa Legesse, the new CEO of the company, explained that the profitability of an insurance company can be measured in terms of expense and income control.

"Considering this, we did good in terms of underwriting activities and equity investment activities," he said.

Hambissa Wakwaya, the board chairperson of the company, remarked that the underwriting of the company grew despite the challenges in the economy.

"Underwriting surplus grew significantly against the backdrop of many challenges in the industry and the broader economy," he wrote in his message to shareholders.

Awash’s gross premium increased by 18pc to 797.1 million Br. Out of this, 23pc has been ceded to reinsurers. The 78pc retention rate slightly rose from last year’s rate of 76pc and remains in line with the private insurer average.

It earned 53.7 million Br in commissions from reinsurers, an increase of 14pc. It paid 38.9 million Br in commissions to agents, an increase of 29pc. The commissions paid represents 4.9pc of gross written premium, which is slightly higher than the preceding year’s 4.5pc.

The company efficiently handled fees for agents and brokers, according to the CEO.

"We cross-check and balance when agents bring us business," he said.

The surge in gross written premium was accompanied by increases in claims paid and other provisions. Net claims paid and provided for went up by 13pc to 322.5 million Br.