Bunna Insurance S.C. has reported that its profit rate has declined for the first time in seven years. The insurance company reported making a profit of 20.05 million ETB falling short of its 29.62 million ETB goal and the 27.92 million ETB it made in profits last year; 32 and 28.2 percent less respectively.
One of the main factors listed for the fall in profit rate is the high interest amount that the company paid on its loan for the construction and acquisition of its own headquarters.
Officials also reported lower underwriting (remuneration for willingness to pay a potential risk) than expected. While the company expected to make an underwriting surplus of 41.83 million ETB, it only made 27.85 million ETB; only 66 percent of the goal.
However, increases in both the company’s paid-up capital and total assets show favorable cash inflow trends. Paid-up capital increased from 112.61 million ETB to 145.14 million ETB. Considering these increases and the costs that the company incurred this year with the financing for its headquarters and the opening of three new branches, company officials are optimistic that the rate of profit that decreased this year is temporary.