Nyala Insurance reported the highest profit in the industry for two successive years, registering 141.3 million Br in net profit, a 22pc increase from last year.

Nyala topped its closest competitor, Awash Insurance Company, which reported 128.7 million Br in profits last fiscal year.

However, the firm's earnings per share fell by 17 Br to 496 Br. Shareholder return, however, remains the highest in the private insurance industry.

A surge in gross written premiums, commission income, earnings from investment activities are the main causes for improvements that contributed to a rise profits. Also, controls on claims made a positive contribution to the firm's performance.

Last year, Nyala underwrote a gross premium of 769.3 million Br, which soared by 76.5pc.

“We have ventured toward high-risk engineering insurance services,” says Yared Mola, CEO of Nyala. “This has helped push up our gross premiums.”

Income generated from providing insurance coverage for mega projects has boosted the firm’s net result, according to Kemal Mohamed, chairperson of Nyala.

One of the mega projects covered by the insurer is for contractors all-risk and third-party-liability insurance provided for the Koysha Hydroelectric Dam that is under construction by Salini Impergilo s.p.a since 2016. Nyala covered 72 billion Br in insurance risk for the project, which is estimated to cost 2.5 billion euros.

In the reporting period, the firm’s premium portfolio shows that engineering insurance, safeguard to the risks faced by the ongoing construction projects, accounts for more than one-third of the total production followed by motor and fire

Nyala ceded 69pc of its gross written premiums to international reinsurers that include Munich-Re, Swiss-Re and Africa-Re.

The retained value of the firm stood lower than many of the insurance companies, according to Abdulmenan Mohammed, a financial expert with over 15 years of experience.

“With the change in product portfolio, our retention declined,” Yared told Fortune. “As the engineering insurance is a high-risk product, we have transferred it to our reinsurers.”

The other area where the insurance firm performed well is controlling the claim growth rate. Nyala's claims in general and life insurance have only increased by 1.7pc to 163.5 million Br. The net claims incurred with non-life insurance amounted to 139.5 million Br, a 2.4pc decrease from the preceding reporting year.

Nyala’s income from interest earned on savings and other securities reached 65.2 million Br, whereas income from rentals decreased by 7.5pc to 9.6 million Br. Nyala boosted its income from commission by 61pc to 61 million Br.