Nib Insurance, an 18-year-old firm, registered a remarkable leap in profit growth last fiscal year, netting 145.2 million Br, a 38.8pc increase from the previous year.

The massive expansion in profit pushed Nib's earnings per share (EPS), net profit divided by the total outstanding shares, to grow by eight percent to 177 Br.

It is an impressive performance, according to Abdulmenan Mohammed, a financial statement analyst, who adds that the management should be applauded for such an achievement in a time of economic slowdown and tough competition.

Abera Shire, the firm's board chairperson, also says that Nib's performance was remarkable considering the outbreak of Novel Coronavirus (COVID-19) and its impact on the economy and the insurance industry.

Almost half of the last fiscal year was overshadowed by COVID-19 and the pandemic clearly demonstrated the vulnerability of the globally interconnected economies. The containment and isolation measures taken by governments have painful consequences for the economy and for everyday life, according to Abera.

"Keeping this in mind, the company's results are remarkable,’’ said Abera. "This implies that Nib can register a better-than-ever performance again if there is a better playing field in the industry in the future.’’

A prudent policy underwriting style, which targets businesses with less risk; efficient claims management, including opening an office that handles claims and investing in areas with good returns, helped Nib to perform well, according to Zufan Abebe, CEO of Nib.

The main driver for such an impressive profit performance is a significant reduction in claims, reduced commissions payments and improved investment activities.

Claims paid and provided for went down by 19.3pc to 203.4 million Br.

"This is a huge reduction," said Abdulmenan. "The management must have maintained a strong risk-management mechanism."

Though the rate has shrunk, Nib settled major claims, according to Zufan.

Last fiscal year, Nib settled nine million Birr in life and personal claims to the families of four passengers who passed away along with 145 other passengers from 35 countries when a 737 MAX Boeing aircraft operated by Ethiopian Airlines crashed while flying to Nairobi, Kenya.

Gross written premium at Nib has increased marginally to 468.1 million Br, a 3.3pc growth from the previous year. The firm ceded 90.4 million Br of the total premium, leading the retention rate to decline by 2.2 percentage points to 80.7pc.

Despite the reduction, the retention rate was still higher than the industry average, according to the expert.

Commissions from reinsurers increased by 20pc to 38.9 million Br, while the commissions it paid declined by 12pc, reaching 28.5 million Br. Nib's investments in time deposits, savings and government bonds grew by 36.5pc to 119.2 million Br.

Nib did very well in investment activities, which significantly contributed to the improved profit level, according to Abdulmenan.