The net profit of Nile Insurance, a 25-year-old firm, marginally increased by one percent to 112.1 million Br in the last fiscal year. The profit rise of Nile is lower compared to the preceding year’s significant growth of 74pc.

During the reporting period, Nile sustained the growth it achieved two years ago after springing back from a slow performance where the profit and earnings per share (EPS) had plunged by more than half due to massive expense claims.

Computed by dividing the net profit by the number of shares owned by the firm's 149 shareholders, the EPS of Nile fell by 58 Br to 269 Br. The massive injection of capital over the past couple of years resulted in the reduction in EPS.

This must have sent disappointing news to shareholders, according to Abdulmenan Mohammed, a financial statement analyst with two decades of experience.

Even though EPS sunk and profit growth slowed, the financial performance of the firm is still good, according to Ephrem Ketema, a shareholder for the past decade. Ephrem says that the firm has good management and a board who can take the credit for the good performance.

Ephrem, who also works as a sales agent for the company, originally bought 385 shares a decade ago after his friend, who also delegated him as a representative, wanted to sell his shares. Since then Ephrem boosted the number of his shares but refrained from disclosing the amount.

"The insurance business is compounded by uncertainty," said Ephrem. "An insurance firm performs well when situations go well too."

Despite a harsh business environment last year, Nile has achieved decent financial performance, according to Mekdes Aklilu, a chairperson of the board directors of Nile, which was established in 1995 with 12.5 million Br in capital.

"The year was a notable one," Mekdes said, "marked by several challenges, including the worldwide outbreak of COVID-19, that threatened the survival of mankind and the continued political violence and instability that repeatedly interrupted economic activities across the country."

Nigus Anteneh, CEO of Nile, says that performance in the core business area was excellent, mentioning Nile's ranking as the fourth and sixth insurance firm in the industry in terms of life and non-life insurance business lines, respectively.

The increase in gross written premium and reasonable retention rate accompanied by a small increase in claims helped Nile to achieve positive performance and maintain profit level.

Gross written premium increased by 13pc to 494.6 million Br. Out of this, 80pc was retained, which is two percent lower than the preceding year’s rate, which is still higher than the industry average of 77pc recorded two years ago. Claims paid and provided for increased by five percent to 212.8 million Br.

"We were selective in choosing a class of business," said Nigus.

Increased growth in written premium, modest growth of claims and a significant increase in commission income resulted in underwriting surplus of 172.7 million Br, an increase of 13pc. The firm received a commission of 35.1 million Br, an increase of 27pc.