Berhan Insurance, one of the latest entrants in the insurance industry, registered remarkable growth over the past fiscal year. Its net profit reached 33.7 million Br, marking a 27.6pc rise from the previous year.

The profit expansion drove the earnings per share (EPS) to grow by five percentage points to 29pc. Berhan’s EPS posted growth while many financial institutions reported a decline in share returns over the reporting period.

The profit and EPS performance of Berhan is impressive, according to Abdulmenan Mohammed, accounts manager at the London-based Portobello Group and a financial statement analyst with close to two decades of experience.

"Achieving growth in a year when many financial institutions had volatile performances is remarkable,” said Abdulmenan.

The positive performance was achieved despite the challenges the firm encountered in the past fiscal year, according to Tewodros Meheret, board chairperson of Berhan.

“It was the most challenging operational year due to the global COVID-19 outbreak, political instabilities and economic slumps,” remarked Tewodros. “Our company has been operating in this milieu, facing all the hurdles in addition to the peculiar predicaments of the sector.”

Growth in gross premium and underwriting surplus, an income spike from investment activities, and controlled claims growth have helped Berhan achieve its commendable performance.

During the reporting period, Berhan’s underwriting surplus expanded by 37pc to 61.4 million Br. The gross premium also went up by 15pc to 139.8 million Br. Out of the gross premium, 23pc was ceded to reinsurers, leading the retention rate to drop slightly from last year’s rate of 77.7pc.

The rate is still the same as the industry average, remarked the expert.

Alemayehu Tefera, CEO of Berhan, explained that retention limits for different insurance products are situational. One year, the firm can have insurance policies that fall under its capacity, while it might have insurance policies with higher risk and need coverage from reinsurers at other times.

"But we still operate in line with the National Bank of Ethiopia's requirements," Alemayehu said.

A directive from the central bank requires insurance companies to have a gross risk retention rate greater than five percent but less than 10pc of their paid-up capital.

Berhan earned 7.1 million Br in commissions from reinsurers, an increase of 19.5pc. The commissions that the company paid to agents also went up by 9.3pc to 4.7 million Br.

Berhan's claims paid and provided for climbed marginally by 2.5pc to 45.7 million Br.

“This shows that claims were well controlled,” said Abdulmenan. “The management should carry on this practice.”

Interest earned on savings increased by 18.7pc to 21.6 million Br, and dividends obtained from investments increased by 70.7pc to 4.1 million Br.