In a year marked by remarkable growth, Nyala Insurance surged ahead, buoyed by impressive gains in investment income and life insurance. While navigating fierce industry competition and regulatory constraints, the firm defied conservative critiques, with its executives steering Nyala to a rise in gross written premiums. This was despite economic headwinds evident as its liquidity soared and paid-up capital climbed, positioning Nyala as a formidable contender against competitors like United and Nile insurance firms.

Yet, the sharp rise in claims paid, driven by soaring costs, proved relentless in the insurance industry.

However, the company netted 273.31 million Br in profit, a 23.9pc growth from the previous year. This positioned it among competitors such as Nile Insurance's 298.3 million Br, and Global Insurance's 67.1 million Br, though United Insurance outpaced it at 327.02 million Br.

Incorporated in 1995 with a seven million Birr paid-up capital, Nyala Insurance has expanded its six founding shareholders' base to 66 as of last year. During the general assembly meeting in December at the Sheraton Addis Hotel, these shareholders celebrated a 5.67pc surge in Earnings Per Share (EPS), translating to 35.4pc, nearly three percentage points higher than the industry average for private insurers.

Board Chairwoman Sara Surur (MD) attributed the company's continued success to the "effective implementation" of a strategic plan.

Nyala’s profit growth stemmed from substantial increases in investment income and the life insurance business, with gross written premiums rising 46.3pc to approximately 1.33 billion Br. The figure is noteworthy compared to the industry average of 903.2 million Br, excluding Zemen Insurance. It also represented five times Global Insurance's 290 million Br, nearly 400 million Br higher than Nile Insurance's 938.1 million Br, and 198 million Br short of United Insurance's 1.51 billion Br.

London-based financial analyst Abdulmenan Mohammed (PhD) noted that shareholders have much to celebrate in a highly competitive industry, describing Nyala's success as "instrumental in the growth" seen in motor, fire, bond, and other insurance categories.

“The gross written premium is quite impressive,” he told Fortune.

However, Abdulmenan observed a conservative tendency in Nyala's retention of gross written premiums, with significant ceding to reinsurers. Nyala's ceding rate was 44.6pc this year, slightly higher than the 42.7pc of the previous year. According to the financial analyst, Nyala's executives must combine increased retention rates and sound risk management policies to address the overall risk.

“Observation of several years indicates that,” said Abdulmenan.

Nyala’s CEO, Yared Molla, who has run the firm for the past 11 years, contested this observation, arguing that the type of policies underwritten determines retention rates and are compliant with the National Bank of Ethiopia's (NBE) regulations.

“There is no cookbook formula for this,” Yared told Fortune.

He argued that if the restriction on the amount that insurance companies can invest in other assets were removed, Nyala and other insurers could have earned more income. Nyala's investment income grew by 27.6pc to 261.1 million Br, while total operating and financing expenses increased by 21.8pc to 270.82 million Br.

Despite the growth in gross written premiums, Abdulmenan pointed out that a lower retention rate, substantial claims paid, and provisions set aside undermined Nyala's underwriting surplus, which fell by 6.5pc to 310.82 million Br. Commission earnings rose by 22.5pc to 113.14 million Br, and the company also paid more in commissions, with an increase of 56.4pc to 44.67 million Br.