Global Insurance has demonstrated commendable growth, attributed to a strategic shift towards underserved markets in the financial year 2023/24. The company’s venture into Takaful offerings — an insurance system compliant with Sharia law — positioned it as a pioneer in the interest-free sector. Though it still shares a small part of the overall market, Global Insurance's Takaful business has captured the largest market share in this niche area.

The Takaful business, which allows members to pool funds to cover each other's losses, reported a modest share of 127 million Br, representing 0.5pc of the total gross written premiums of the industry, which neared 23 billion Br last year. Less than half of the 18 insurance companies in the market have Sharia-compliant departments actively providing Takaful insurance services. Global Insurance’s “Ahli Takaful” leads this sector with a 45pc market share, followed by Awash Insurance’s “Salaam Takaful” at 31pc, Oromia Insurance’s “Halal Takaful” at 16pc, and Nile Insurance’s “Aman Takaful” at eight percent.

While Global Insurance's profitability lags behind established peers in the industry, its modest increase in earnings per share (EPS) and growth in gross written premiums (GWP) proved the firm on a positive course. Noteworthy growth in gross written premium and commission income are credited as the main drivers of the improved performance.

Board Chairperson Yahya Abdosh informed shareholders during a recent general assembly that Global Insurance has generated the highest gross written premium in the industry, attributed mainly to the Takaful business it has engaged in for the past two years. Although three-fold lower than the private insurance industry average of 903.2 million Br, Global’s GWP increased by 67.1pc to 290.4 million Br, with Takaful contributing about 20pc of the share.

“This is an impressive increase,” said Abdulmenan Mohammed (PhD), a financial statement analyst based in London.

Of this, 19.7pc was ceded to reinsurers, which has slightly increased. Global’s earnings per share have shown a modest increase of five Birr to 150 Br. The 30pc EPS growth is below the industry average by four percentage points, trailing behind United Insurance’s 47.9pc and Nile Insurance’s 39.6pc.

According to Abdulmenan, the modest increase must have been due to the injection of substantial fresh capital. Global boosted its paid-up capital by 18.6pc to 242.16 million Br.

Incorporated in 1997 with an initial capital of 3.75 million Br raised from 23 founding shareholders, Global Insurance now boasts 196 shareholders. One of them, Salahadin Mohammed, who bought shares worth 150,000 Br 10 years ago, wants to see the firm's executives focus on digitisation to enhance service delivery and customer satisfaction, alongside a continued emphasis on interest-free insurance products to expand its revenue base.

The company netted 67.1 million Br from conventional and Takaful businesses, showing 38pc and 34pc growth from the previous year, respectively. These performances are markedly lower than those of its generational peers, such as United Insurance’s 327.02 million Br and Nile Insurance’s 298 million Br. However, Tibebe Tesfaye, chief executive officer (CEO), contended that the shift towards serving the underserved community with Takaful products should not be compared directly with conventional insurance models.

The CEO has misgivings about his firm's comparisons with conventional insurers, calling them "misleading" due to distinct operational models and market focuses.

“It’s tricky,” Tibebe told Fortune.

Running Global Insurance for the past six years, Tibebe began as an underwriter at United Insurance before moving to Teshay and Lion insurance firms up to deputy CEO of operations and claim manager, respectively.