Executives of United Insurance have rewarded shareholders with generous results from last year’s operation, making them bag 15pc more earnings per share (EPS) than the previous year. EPS surged by 55 Br for a share to 370 Br after the company netted a 181 million Br profit, showing an increase of 25pc.

In the words of Mulualem Berhane, board chairman, this was recorded against the backdrop of “a country grappling with continued political and economic vulnerabilities.” He praised the outcome as “commendable.”

Abdulmenan Mohammed, a finance expert based in London, attributed the increase in EPS to the “modest growth in paid-up capital.”

Executives of United Insurance believe that the minimum paid-up capital requirement is on the low side, considering the continuous depreciation of the Birr against a basket of major currencies.

Shareholders who met at the Sheraton Addis last month agreed. They have resolved to increase the firm’s capital to 1.5 billion Br by the end of 2024.

United Insurance’s paid-up capital grew to 499 million Br, one million Birr short of the threshold capital authorities of the National Bank of Ethiopia (NBE) raised for general and long-term insurance businesses. Motor insurance, categorised under the general insurance business, takes the lion’s share of the industry’s premium portfolio, accounting for close to 55pc.

Agnes Boney is in charge of the firm’s Beklo Bet Branch. She observed that more policyholders appear to be covered under motor insurance than marine and fire insurance.

United Insurance is a pioneer in the private insurance industry, incorporated in 1994 with an eight million Birr paid-up equity raised from 84 shareholders. The insurance firm has 517 shareholders following its merger with Lion Insurance two decades ago; the only such consolidation occurred in the financial sector.

United Insurance wrote a gross premium of 953.9 million Br, registering a 30pc increase, retaining 70.5pc. However, this translated to a 2.5pc retention rate. Commissions earned from reinsurers went up by 38.5pc to 74.5 million Br in the reported year. Despite the reduction in retention rate, the rise in gross written premium was eroded by claims reaching 349.1 million Br, a 21pc increase.

Abdulmenan urged the management under Meseret Bezabeh to review the firm’s risk management practice.