Lion Insurance Company paid up capital climbed by a quarter in the ended financial year, while the profit has increased by over 8 percent. The insurance company has enabled to write a total premium of 386 million birr with the growth of 2.4 percent compared with the preceding year which is 3.7 percent share of the industry.
According to the annual report of Lion Insurance, in related to the growth in premium the net earned premium has increased by 16.7 million birr or 5.7 percent from 293-million-birr of 2018/19 financial year to 310 million birr. The company loss ration for the year has reduced compared with the 2018/19 period and stood at 59.5 percent from 62 percent.
During the reported year the amount of gross claims paid was 186 million birr, while net claims incurred was 184.5 million birr claims. The company technical provision stood at 431.2 million birr with a growth of 9.1 percent from 395.3 million birr of the preceding year. According to the annual report, the underwriting surplus for the year has been expanded by 12 percent and stood at 124 million birr. Form its investment in different companies, interest income and rental income Lion has secured 51 million birr in the year.
For the year, the company net income has been 175 million birr that was 148.5 million birr a year ago, while for the year the total expense has increased by 22 percent and reached at 121 million birr. Its profit before tax has climbed by over 8 percent and reached to 53.3 million birr. A year ago, the profit before tax was over 49 million birr. For the year its profit after tax stood close to 52 million birr that was 43 million birr. For the year, the earnings per share has show slight reduction due to capital expansion and stood at 9.6 percent that was almost 10 percent a year earlier.
Lion’s asset on the reported year that ended on June 30, 2020 has registered an increment of 16.5 percent from 842 million birr from 723 million birr. As of June 30, the company paid up capital has increased to 148.5 million birr with an increment of 26 percent compared with prior year’s performance, while the subscribed capital has reached at 300 million birr.
The total equity of Lion has expanded to 243 million birr from 193 million birr a year ago. As of June 30, 2020, Lion has 36 branches and seven contact offices throughout the company.
On behalf of the board of Directors and myself, I am honored and humbled to welcome you all to this year’s Annual General Meetings. I really feel privileged to present the annual performance report and the audited financial statements of Lion Insurance Company S.C. (LIC) for the fiscal year ended June 30,2020. Despite the various challenges we faced, I am delighted to point out that the fiscal year under review marks commendable achievements in bath financial and non-financial perspectives.
Despite the fierce price-based competition within the industry, erratic social unrest in the country, the unforeseen outbreak of COVID-19 pandemic and the subsequent market challenges that the insurance industry faced during the year under review, LIC managed to accomplish remarkable achievements in various strategic activities that are believed to lay a firm foundation to sustain the versatility of our Company. The value of the total assets has grown to ETB 842 million, exceeding last year by 16.5%. total liabilities, on the other hand, rose to ETB 599 million, exceeding that of last year by 13.1%.
The paid-up capital base of the company has risen to ETB 148.5 million, showing 25.7% increment, over last year’s records while the total equity and reserves stood at Birr 243.1 million.
Gross Written Premium (GWP) of ETB 386 million was registered which showed an increase by Birr 9.2 million or 2.4 % than that of last fiscal year-while the net claims incurred (NCI) was ETB 14.5 million showing an increase by ETB 2.9 million or 1.6% as compared to last same fiscal year. Favorably, the underwriting result showed a corporate surplus of ETB 123.7 million whereas the profit before tax netted ETB 53.3 million which was aver by ETB 4.0 million or 8.1 % as compared to that of the preceding year. In the face of such evident odds and challenges, this is a commendable result for our company. Needless to say, this performance could be taken as leverage to shareholders’ long term capital value.
I would like to reiterate that the performance results witnessed are the reflections of the dedicated engagement of the Board of Directors, the management and the entire staff towards realizing the aspired vision, mission and goals set by the Company. Thus, I would also like to congratulate you, over respected shareholders for year contribution in registering the stated accomplishments.
Dear shareholders, the board has been committing itself to strengthen the institutional base of the company to stretch out for sustainable growth among which our business relation with Lion International Bank (S.C), deployment of capable management team, increasing the paid-up capital of the company enable to maximize its retention capacity are worth to mention.
Furthermore, the Board proposed ETB 20 million of the Company’s paid-up capital to be allocated for the commencement of Life Insurance business, as it is a milestone for the company to launch the product at this stage. Theis crucial move will enable the company march forward by exploiting the full potential of the market which could help the company to a better position in the industry.
Realizing that effective risk management protects and benefits all stakeholders, the board has made several significant changes to this area so that risks are properly identified, evaluated and measured to ensure the ongoing compliance with regulatory requirements and internal policies and procedures.
In line with our commitment to adhere to the compliance requirements of the country’s regulatory framework and corporate governance practices, the incumbent board of directors has conducted successive regular and ad-hoc meetings with a strong conviction to reinforce its oversight role, thereby setting strategic directions and conducting periodic performance review of the company, and follow up the timely implementation of resolutions.
Finally, I would like to convey my sincere gratitude to our honored customers for choosing to transact business with us; shareholders, board of directors, management, the entire staff and intermediaries for the dedication exhibited towards elevating our company to the position it achieved, the National Bank of Ethiopia and the Documents authentication and registration agency for the usual guidance and support, particularly for their devotion to attend the proceedings of our meetings and expediting the approval/registration process of the resulting minutes. I would also like to take this opportunity to urge our esteemed shareholders to reinvest the dividends declared to scale up the paid-up of the company.
Thank you all,
Chairperson, Board of Directors