2016 Annual Report

THE UNITED INSURANCE COMPANY SC
Annual
Report
2015/16
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BOARD OF DIRECTORS
Ato Girma Wake

Chairman
Ato Yemane Bisrat Ato Taye Dibekulu

Vice Chairman
Ato Abera Tasew
Wo Akiko Seyoum Ato Mulualem Birhane
Eng. Samrawit Getamessay Ato Getachew Ashine

EXECUTIVE MANAGEMENT
Wo Meseret Bezabih
General Manager/CEO
Ato Tesfaye Desta Wo Azalech Yirgu Ato Dawit G/Ammanuel

DGM Operations-Non-Life DGM Life & Medexin DGM Finance & Admin.
Wt Bethelihem Mekbib Ato Girum Fekade Wo Assefash Abate Ato Engida Kassaye
Director, U/W & Tech. Serv. Director, Claims and Eng. Director, HR & Admin. Director, Fin. & Investment
Ato Aliye Mohammed Ato Mesfin Eyasu

Manager, IT Manager, Marketing
MISSION STATEMENT
VISION
< UNIC-ETHIOPIA > aims to be the best insurance company in the country:
most professional, most commercial and most responsible.
MISSION
To provide complete insurance covers at economic rates, honest, prompt,

and courteous claims services, to fully satisfy all its constituencies:
Customers, Shareholders, Employees, Society and the Environment.
Striving for Excellence

Table of contents
Report of the Board of Directors

3-17
Independent Auditors Report to the
shareholders of The United Insurance Company SC 18
Statement of Financial Position as at 30 June 2016 19
Statement of Comprehensive Income 20

for the Year Ended 30 June 2016
General Insurance Business 21

Revenue Account
Long Term Insurance Business 22

Revenue Account
Statement of Cash Flow for the Year Ended 30 June 2016 23
Statements of changes in Shareholders Equity 24
Notes Forming Part of the Financial Statements 25-36

for the Year Ended 30 June 2016
NOTICE OF THE TWENTY SECOND ANNUAL GENERAL MEETING OF SHAREHOLDERS
IN ACCORDANCE WITH THE PROVISIONS OF ARTICLES 418 & 419 OF THE COMMERCIAL CODE OF ETHIOPIA
1960 AND ARTICLE 3(4) OF THE COMPANY'S ARTICLES OF ASSOCIATION, NOTICE IS HEREBY GIVEN TO ALL
SHAREHOLDERS THAT THE TWENTY SECOND ANNUAL GENERAL MEETING OF
THE UNITED INSURANCE COMPANY SC <UNIC-ETHIOPIA> WILL BE HELD AT THE SHERATON ADDIS ON
1ST NOVEMBER 2016 FROM 9:00 AM TO TRANSACT THE FOLLOWING BUSINESS:
1. To Consider and approve the Agenda items of the meeting;
2. To consider and approve the Report of the Board of Directors;
3. To consider and approve the Accounts for the year ended 30 June 2016 and receive the
Auditors' Report thereon;
4. To decide on the appropriation of net results of the Company's operations;
5. To decide and approve Board remuneration;
6. To consider and approve Procedure for Nomination and Election of Board of Directors;
7. To elect and/or re-elect the Board Nomination Committee members and fix their
remuneration; and
8. To approve sale and/or transfer of the Companys shares up to and including

30 June 2016.
BY ORDER OF THE BOARD
Dated at Addis Ababa this 10thday of October 2016.
NOTE:A Shareholder entitled to attend and vote at the General Meeting may appoint a PROXY in his/her stead.
A PROXY need not be a shareholder of the Company. To be valid, the enclosed PROXY FORM must be
completed and presented to the Secretary of the Board at or before the General Meeting.
Annual Report 2015/16 1

CHAIRMAN'S LETTER TO SHAREHOLDERS
It is my pleasure to welcome you all, on behalf of the Board of Directors and on my own behalf, to the TWENTY
SECOND ANNUAL GENERAL MEETING of Shareholders of The United Insurance Company S.C.
In accordance with the Companys past practice, the Board of Directors had decided to have the Annual Report
printed and presented to the Annual General Meeting on the strict understanding that it will not be distributed to third
parties until after its approval by the Annual General Meeting of Shareholders.
I would like this grand gathering to note that our Company, once again, has successfully concluded its 22nd year of
business. While the full details are contained in the body of this report, I wish you to know at the outset that the
combined net results (Net Profit Before Tax) of the Companys Life and Non-Life operations summed up to
Br72,345,866 for 2015/16. The result from Non-life operations in the preceding year was Br72,611,669 as no profit
was transferred from Life Business which would be accrued every two years on the basis of actuarial valuation.
In preparing the accounts, the Company had taken into account all existing relevant laws and international accounting
standards as are applicable to the Company's business. In accordance with Article 3(4) of the Company's Articles of
Association as amended by the First Annual General Meeting of Shareholders which held on 12 October 1995, as
well as in compliance with Directives issued by the Supervisory Authority, the National Bank of Ethiopia, this Report
of the Directors and Accounts covers the financial year ended 30 June 2016.
In accordance with Articles 418 and 419 of the Commercial Code of Ethiopia 1960 and Article 3(4) of the Company's
Articles of Association, I present, for your consideration and approval, as appropriate, the Report of the Directors, the
Audited Financial Statements together with the Report of the External Auditors for the Financial Year ended 30 June
2016.
I take this opportunity to express my appreciation and gratefulness to fellow Directors, the Management and the
whole staff of <UNIC-ETHIOPIA> who made this success to unfold and elevated our Company to its present height.
GIRMA WAKE
Chairman, Board of Directors &

of the Annual General Meeting
2 Annual Report 2015/16

REPORT OF THE BOARD OF DIRECTORS

In line with the Companys long established tradition, the Twenty Second Annual Report of Directors reviews the trading
landscape with specific mention of the main events and elements with significant effects on the performance of the
industry, the Company's operations and results for the period under report as well as the prospects for the immediate
future.
TRADING ENVIRONMENT
It is normal practice for business to benchmark their performance against those in the same industry and gauge their
standing vis-a-vis other industry players (the competition) in the same market place. Our Directors have included this
important comparison in their reports of the last two Annual General Meetings of Shareholders (AGM) which drew many
positive comments and appreciation from our shareholders as well as from those who do research work in the area.
We, therefore, decided to continue with the same tradition in this 22nd AGM to help you see the standing of
<UNIC-ETHIOPIA> in the insurance market in the country.
The Management collected industry data for this financial year 2015/16 from the National Bank of Ethiopia (NBE). From
the outset, please allow me to express our thanks and appreciation to the National Bank of Ethiopia for collecting and
availing this important industry data for our use.
STATUS OF ETHIOPIAN INSURANCE INDUSTRY 2012-2016
Currency 000 Birr
DESCRIPTION 2012 2013 2014 2015 2016
Number of Companies 15 17 17 17 17
Total number of Outlets 243 273 332 377 426
<UNIC-ETHIOPIA> 24 25 29 29 30
Market Gross Premiums (Non-Life) 3,724,760 4,497,666 4,687,657 5,242,085 6,093,677
<UNIC-ETHIOPIA> 239,014 248,938 274,311 296,465 314,828
Market share - % 6.4 5.5 5.9 5.7 5.2
Market Growth - % 53.8 20.8 4.2 11.2 16.2
<UNIC-ETHIOPIA> - % 6.7 4.2 10.2 8.1 6.2
Market Retention Ratio - % 73 69 73 77 76
<UNIC-ETHIOPIA> - % 80 80 81 81 89
Market Loss Ratio - % 67 65 65 63 69
<UNIC-ETHIOPIA> - % 64 55 52 53 66
Market Profit Before Tax 529,471 786,527 975,730 1,051,674 1,007,245
<UNIC-ETHIOPIA> Profit Before Tax 43,689 74,858 77,601 72,612 72,346
Market Profit Before Tax 14 17 21 20 17
(Profit/Premium) - %
<UNIC-ETHIOPIA> - % 18 30 28 24 23
Industry data shows that our Company recorded a small deterioration (8.8%) in its market share which dropped from
5.7% the previous year to 5.2% in the year under report.
Among others, the reasons for slight decline in the market share was attributable to the Company's lower premium
growth of 6.2% against a market average of 16.2% and its choice not to expand as much as the industry did by opening
new outlets during the reporting year. While the market as a whole added 49 new branches, our Company opened only
one new branch in 2015/16. The Company's strategic choice to go more for the bottom-line than the market share by
focusing on business quality rather than the quantity (prudence in the right sense of the term) believed to have
contributed to this development.

With regard to Non-life operation, the industry as a whole, our Company included, registered a noticeable worsening
claims situations in the year under report where claims ratio rose from 63% in the preceding year to 69% in 2015/16 for
the industry and from 53% to 66% for our Company. The deterioration in the claims ratio was the single most 'culprit'
that caused the underwriting result to drop from Br92,115,626 in the previous year to Br70,832,073 in 2015/16.
The foregoing minor setbacks notwithstanding, <UNIC-ETHIOPIA> continued to perform better than the industry by
maintaining higher Retention and lower Loss ratios. For the year under report, our Company recorded a Retention ratio
of 89% against the markets 76% and a Loss ratio of 66% against 69% for the industry.
In terms of profitability, our Companys gross profit excelled that of the market by 20% to 76% over the last five years in
general and by 35% for the reporting year in particular.
Status Report on Miscellaneous Matters Raised in Previous Reports
Every year, our Company's Annual Report of Directors attempts to indicate issues considered relevant to the industry
along with proposals of measures that may need to be taken. Such issues are kept alive by repeating our comments
until appropriate actions are taken by any of the appropriate parties: the Supervisory Authority, the insurance
companies or Government or all three as the case may be.
Directives No.: SRB/1/2014 - Reinsurance Company Establishment
With regard to this vital Directive, our Company repeatedly expressed its clear position in welcoming the issuance of
this directives on the one hand and doing all it can for the establishment of robust domestic reinsurer that would have
all it takes to meet the expectations of all its stakeholders on the other. It really gives us a sense of pride for us all in the
industry to see our dream come true for the fact that the long-overdue Ethiopian Reinsurance Company SC has come
into operation starting the end of this reporting year. While taking this opportunity to congratulate and thank all who
made it happen, our Company would like to affirm its commitment, as in the past, to give all necessary support for the
success of Ethiopia Re and at the same time, encourages the reinsurer to put the necessary organizational setup and
systems in place to help tap available opportunities so as to drive the company on the right track for sustainable growth.
Directives No.: SIB/44/2016 Manner and Criteria of Transacting Reinsurance by Insurers
This is the Directives intended to create a business exchange scheme that would facilitate placement of risks for
reinsurance covers between and among all domestic insurers where either the treaty capacity of a given insurer is fully
exhausted or risks proposed for acceptance fall outside the scope of the insurer's treaty.
The scheme was put in place with the prime purpose to fully utilize existing national risk retention capacity before
resorting to concede overseas placement of such risks in facultative arrangement with an ultimate objective to contain
foreign exchange that otherwise would have flown out of the country in the form of premium cession. This is generally
a welcome development.
Arguably, the Directives parts which imposes compulsory cession of 5% on each insurance policy to be ceded to
domestic reinsurers on the one hand and the requisite for acceptance of risks through facultative exchange of
businesses only up to insurer's retention limits on the other are thought to be contestable.

The stated compulsory policy cession would not only be administratively cumbersome and expensive for insurers, it
would also take away small businesses with relatively better results from the insurers unnecessarily . The restriction of
accepting risks offered through facultative exchange of business to the limits of one's retention capacity would render
the exchange scheme meaningless when viewed in terms of business gains. The gains (small premiums to be earned)
do not worth the effort of the exchange if acceptance is limited to retention levels as mentioned above.
Instead of imposing Compulsory Policy cession and limit the inward risk acceptance at gross retention level, there could
be and there are in fact better alternative options that would greatly help enhance the national capacity and save foreign
exchange outflow, the alternatives which were recommended but have not got positive gesture from the NBE.
It is our Company's strong position that local insurers must be allowed to accept risks through business exchange
scheme to the extent of their respective treaty capacity as opposed to the provision of the Directives that limits such
acceptance to Company's retention. We would like to note that implementation of this Directive has a negative impact
for all industry players including us.
Directives No.: SIB/41/2016 Monitoring the Nationality of Shareholders in an

Insurer/Reinsurer
It is known that the Directive requires the Board of Directors to put in place and notify the National Bank a mechanism
to ensure that all shareholders of the insurer/reinsurer at all times are Ethiopian Nationals and monitor its
implementation quite strictly.
The implementation of this Directives has a practical challenges being faced such as holding of shares in respect of
shareholders whose nationality has changed non-Ethiopian at later stages, transfer of shares through inheritance from
Ethiopian nationals to non-Ethiopian legal heirs, Ethiopian Companies with Non-Ethiopian shareholders and the like. All
these creating legal and administrative problems in the implementation of the Directives were also brought to the
attention of the regulatory body, but no solution was given to date.
However, Directors seized various opportunities to invite the Supervisory Authority to revisit the matter in light of
Ethiopias often expressed and officially announced plans to join such international institutions as COMESA, FTA and
WTO, both of which anticipate reciprocal opening up of economies of Member countries.
As the result of the Directives, the Board is ought to ensure at all times that only shareholders who meet the
requirements of the Directives are legally entitled to receive declared dividends or effect transfers of shares or the
combination of these.
Directive No.: SIB/43/2016 Limits on Board Remunerations
Coming into force on June 1, 2016, this Directive was issued to amend the Board's annual 'compensation' cap by
raising it from Br50,000 to Br100,000 per annum and monthly transport allowance from Br2,000 to Br4,000. The
Directives makes it a requirement for the AGM to pass decision for the changes to take effect and hence, the matter
constitutes one of the agenda items of our today's meeting.

The Dangers of Uneconomic Premiums
As our Company repetitively reported over the last couple of decades, the industry players continued to bend upon
price-driven competition strategy the result of which began to resemble acceptance of risks for very tiny premiums, or
closer to none at times. Our Company is being coerced to follow suit although it insistently followed relatively more
stringent underwriting measures in certain classes of businesses while pursuing relaxed approaches in some selected
classes to strike a fair balance in its portfolio.
The lasting solution for this problem-child of the industry can only be obtained from collective effort to be made and
measures to be taken by major stakeholders for the common good. It is really heartening to know that the Association
of Ethiopian Insures (AEI), having got green light and encouragement from the regulatory body (NBE), has embarked
on the project to undertake actuarial study that would help set market-supported minimum tariff for some class of
businesses. Priority is said to have been given to those classes of insurance the claim experiences of which are going
from worse to worst like motor business.
While earnestly calling upon concerned stakeholders to sincerely support the project to rescue the industry and
complete it within shortest time possible, our Company would like to affirm its commitment to do everything within its
means to bring this project to fruition. <UNIC-ETHIOPIA> takes this moment to extend its heartfelt appreciation to the
NBE for the unreserved support including close follow up on the developments of the project and big 'Thank You!' goes
to the AEI for shouldering the responsibility to get the job done as owner of the project.
Lack of Level Playing Field and Its Harmful Effects on the Industry
Hitherto, the Directors repeatedly pointed out the uneven nature of the industry's playing field and its role in
perpetuating the industrys market distortion. They have openly expressed their views and continued to do so that
entities receiving treatment well fitting to the term 'favouritism' continue to get short-term gains at the expense of others
and be deprived of the single most important benefit of a market-oriented economic regime in the long-run: that of fair
competition.
GENERAL
It is to be recalled that, at the recommendation of the Board of Directors, the Annual General Meetings of Shareholder
held on 22nd October 2015 passed a decision, once again, to increase the Company's paid up capital by Br75,000,000
from Br175,000,000 to Br250,000,000. The decision so taken was based on the realistic justifications offered by the
Directors which was primarily linked to, besides creation of increased underwriting capacity, the Companys
engagement in relatively large investment projects (the construction of two new buildings) on the one hand and its
acquisition of equity shares in the newly established domestic reinsurance company (Ethiopian Re) on the other.
It is necessary to note here that the Kality Special Department Stores and Recreation Centre Project has been almost
fully finished, pending completion of small remnant works. Starting end of July 2016, the facility was made ready for
renting and the Company has taken steps in putting advertisements in newspapers to attract potential tenants even
though that effort did not succeed till now. The Board and Management are seriously considering and evaluating various
options to put this vital resource to use for intended purpose. The additional income from this edifice would also be
another source that will augment the Companys revenues starting 2016/17 Budget Year. The construction of the
Company's Head Office which is expected to be completed latest by August 2017 will also contribute to the Company's
income in significant terms starting 2017/18 financial year, by way of cutting rent expenses the Company is currently
paying in respect of its current Head Quarters on the one hand and by earning rent income from letting extra spaces to
renters on the other.

The Directors would like to let you know at this juncture that the Company paid 50% (Br12.5 million) of equity shares it
has subscribed for (Br25 million) from the newly established national reinsurer, Ethiopian Reinsurance Share Company
or Ethiopian Re for short.
It should be noted that the transfer of surplus from Life Business is made every two years based on actuarial valuation.
There was not such transfer in the preceding year as reported while transfer of surplus in the amount of Br16,844,000
was effected in the year under report following actuarial valuation undertaken and authorization given thereon, the
highest surplus since the Company started Life Insurance Business.
The Board of Directors held 11 regular and 3 Extra-Ordinary/Urgent meetings between 01 July 2015 to 30 June 2016.
As in the past, matters requiring special attention were referred to the Board Committees. In line with the Directives on
Insurance Governance, the Board of Directors is now organized into four committees, three of which were created as
per the requirement of the Directives and the other one as the matter of need to cover major tasks related to Board's
duties. These are Audit Committee, Compliance and Risk Management Committee, HR & Administration Committee
and Business Development Committee.
The Company opened one new branch during the year under report. As one of its strategies to grow its premium
income, however, the Company has continued to design innovative insurance products not only to provide reliable
services but also to make its product offerings more complete and suitable for wider selection by the customers. Special
partnership agreement with Ethiopian Airlines by which Sheba Mile customers would be granted such miles when they
buy insurance from <UNIC-ETHIOPIA>, the recently developed online sales of selected products using internet
technology and emergency medical insurance are just few of the developments in this regard.
As in the past, <UNIC-ETHIOPIA> has continued to maintain its exemplary image as a fair and equal opportunity
employer. On 30 June 2016, the Company had a total staff complement of 289 employees (154 or 53% were female
and 135 or 47% were male) as compared to 275 the previous year. Of the total staff strength, 279 or nearly 96.5% were
regular and the rest were casual. Of the regular staff, 149 or nearly 53.4% were female and 130 or 46.6% were male
while casual workers comprised 5 women and men each. Out of the total 289 staff members, 166 of them were degree
holders (10 MAs and 156 BAs), 70 had Diplomas while 53 held Certificates and other pre-College papers.
In its endeavour to have skilled manpower, the Company has continued to give particular attention to its human
resource development by committing adequate resources for the purpose and expended Br1,073,584 for staff training
during the reporting year. Accordingly, 157 of the Companys staff have received training on various technical and
managerial courses during the year ended 30 June 2016. Of the total, 28 staff received in-house training, 120 trained
at local institutions while 9 others followed courses offered by overseas entities.
It should be noted that staff training is given top priority by the regulatory body as well. The National Bank of Ethiopia
has made it a requirement for financial institutions to allocate 2% of their respective annual recurrent budget for staff
training purposes, the utilization of which is continually monitored by the NBE. Any unutilized portion of the training
budget will be transferred to a common pool of fund established by the bank and be put to common use by the
institutions as per NBE's guideline.
As stated earlier, it is really satisfying for the Board of Directors to report the completion of the Companys construction
project at Akaki-Kality which is now made ready for occupancy. Effort is well underway to let it out to potential tenants
and the property is expected to generate rent income very soon.

Current Status
Last Year

The construction of Company's Head Office at Tewodros Square is also progressing well although an 'acceptable' delay
by some six months has occurred. The project is now planned to be completed by August next year. The bidding process
for the finishing work was finalized and the work has already been awarded to the winner. The task is currently in good
progress.
Current Status
Last Year

As reported in the preceding year, in light of the considerable financing needs of the two construction projects,
Management and the Board had already taken decision and secured loan in the amount of Br140 millon, repayable over
10 years, at 11% interest rate from United Bank SC to particularly finance the Head Office Building project.
It is known that the Company, besides short-term investments in bank fixed time deposits, has continually made
investments in equity shares of several business entities. Owing to relatively huge capital expenditure required for the
construction of the two new buildings, the Company was forced almost to give up short-term investment, that could
have enhanced immediate bottom-line, in favour of creation of long-range shareholders' value by shifting investments
to long-lasting ventures like the construction projects under implementation at present. The Company have not reaped
return on investment (dividend) from almost all equity shares except from the United Bank SC. At the end of the period
under report, the Company's equity investment reached Br96,811,829 by growing from Br74,462,698 by about 30.0%.
Yet, many of the investments are highly expected to start to generate dividend income for the Company from the end of
2016/17 Budget Year onwards.
In order to comply with NBE Directives No.: SIB/42/2015 on Corporate Governance which came into force on 1st
October 2015, starting last year, the Company was forced to drop the staggering system of election of the Board of
Directors it adopted since the 5th Extra-Ordinary Meeting of Shareholders. Hence, there would be no election or
re-election or replacement of directors at today's meeting. The directors elected or re-elected last year are supposed to
serve one full term of office or three years unless unforeseen circumstance may happen.
It is to be recalled that, in line with the requirements of the same Directives, the 21st Annual General Meeting of
Shareholders held on 22nd October 2015 established Board Nomination Committee that would facilitate the election of
the next Board of Directors. However, that decision of the AGM could not get the go-ahead from the regulatory body
due to procedural issue. According to the procedures, election of the Nomination Committee requires prior approval of
the Procedure for Nomination & Election of Board of Directors by the General Meeting of
Shareholders. Today's meeting is thus tasked with the consideration and approval of the draft Procedures for Election
of Nomination Committee laid before it.
FINANCIAL PERFORMANCE AND RESULTS - NON LIFE
Gross Premiums Written
As at 30 June 2016, the Company had written a Non-Life premium of EBr314,828,292, recording an increase of 6.2%
over that of the previous year. On the other hand, compared to the Nations Non-Life premium growth of 16.2%, our
Company could not be said to have met its expectations in that respect.
Much of the modest growth recorded was the result of significant growth registered in respect of three major classes
of businesses, namely, Fire and General Accident grew by 32%; the combined premiums of what our Company calls
as the "group of small-premiums classes (Accident & Health/Personal Accident/Workmens Compensation and
General Liability) by 27% and motor by 11%. While engineering class of business (remaining as it was at positive
0.2%) neither shown growth nor decline, two class of businesses, namely, Pecuniary and Marine & Inland Transit
recorded negative growth of 23% and 3%, respectively.

Retention and Reinsurance
As stated earlier, Non-life Gross Written Premium stood at Br314,828,292 as at June 30, 2016. The Company's
Retained total premium grew to Br280,483,217as at 30 June 2016 as compared to Br240,707,364 the previous year.
Accordingly, the ratio of Total Retained to Total Written premiums recorded about 10% increase in the year under
report: 89.1% compared to 81.2% for the previous year.
Unlike the previous year where reductions in the retention rate were recorded in most class of businesses, a close
look at the Companys 2015/16 retention performance exhibited increasing results for all classes of business across
the board. Relative retentions recorded highest increase in the Pecuniary class, growing from 52.6% the previous
year to 66.8% as at June 30, 2016. As compared to the preceding year, retentions for Marine grew from 81.4% to
87.0%; Fire & General Accident from 59.8% to 62.4%;Engineering from 51.1% to 54.2%. The Motor class of business
recorded a relatively significant increase from 91.5% in 2014/15 to 98.7% in 2015/16 while the retention for "group of
small premiums" class of business grew to 95.6% in the reporting year against 91.1% in the past two consecutive
years.
As retentions are linked to capital of the Company, the growth registered in all classes of business are considered
healthy for the fact that they just grew almost in tandem with increase in the Company's paid-up capital and reserves
which went up to Br280,208,965 as at June 30, 2016 from Br208,341,162 last year same period. The Company's
reinsurance arrangement for 2015/16 was fine-tuned taking this development into account which resulted in
improved retention ratio even though that may not have been the only reason.
Portfolio Mix
With a written premium of Br192,982,826, Motor/Auto insurance continued to account for the largest premium volume
in the Company's total premium portfolio as at 30 June 2016. At nearly 61%, it was even marginally higher than its
share in the previous year, which was 59%.
PREMIUM STRUCTURE AS AT 30.06.16
Group of "Small
Premiums"*
Engineering
Group of "Small Engineering 13% Fire & GA
9%
Premiums"* 10% Fire & GA 6% Marine-
12% 5% Marine- Pecuniary Cargo/Transit
Pecuniary Cargo/Transit 8% 3%
11% 3%
11%
Motor Motor
Motor
59% 61%
61%
FINANCIAL YEAR ENDED 30.06.15 FINANCIAL YEAR ENDED 30.06.16


Unlike the preceding years, what the Company had classified as a "group of small premiums" classes turned out to
be a very far second with a share of 12% while the Engineering class of business followed by having a share of 9%
in the portfolio. While Pecuniary and Fire & General Accident contributed 8% and 6%, respectively, to total premium,
Marine Cargo and Inland Transit accounted for only 4%.
It has to be noted that Managements projections of the Companys portfolio mix of the premiums achieved as it
followed the ranking initially estimated and adopted in the Company's Business Plan.
Claims and Profitability Loss Ratio and Underwriting Surplus/(Deficit)
Though still better than the market loss ratio of 69%, the Companys over all claims experience in the year under
report recorded a remarkable deterioration. Compared to a loss ratio of 53% for the previous year, financial year
2015/16 experienced a loss ratio of about 66%.
The escalating claims ratio of the Company was a combined result of unfavourable factors that were faced in the
reporting year. The ever-declining premium rates owing to what can be seen as closer to throat-cut competition bent
up on price reduction coupled with unethical practices; the growing trends in cost of doing business in the country in
general and the escalating cost of labour and spare parts in motor claims in particular; the rise in the frequency of
accidents and severity of resultant losses particularly in the motor class of business; and the requirement enforced
by NBE's Directives No. SIB/38/2014 for the provision of 100% reserve in respect of claims under litigation or dispute
commencing July 1, 2015 against 15% in the preceding years were the underlying reasons for deterioration in claims
ratio. Due to the effect of change in provision for claims under litigation alone, the Company's incurred claims has
shown fairly high increase.
With the exception of drop in loss ratios under the Pecuniary class of business (from 3.5% the previous year to
negative 2.8% in 2015/16) and what the Company terms as the class of "group of small premiums" (from 53.4% to
50.9%), loss ratios for the rest classes of business rose by significant proportion for the reporting period. The highest
increase in the loss ratio was witnessed under the Engineering class of business. The two classes of businesses that
registered negative loss ratios in the preceding year happened to end up not only with positive but also recorded
increased loss ratios. These were Marine and Inland Transit whose loss ratio grew to 12.8% in 2015/16 from negative
8.0% the previous year and Fire and General Accident to 9.6% from negative 5.4%.
Motor class of business registered a lion's share from the total incurred claims or 85.8% (Br138,371,013 for motor
against Br161,186,490 total incurred claims) for the year 2015/16. The loss ratio of Motor class of business for the
year 2015/16 was75.8% as compared to 61.0% in 2014/15.
Needless to say, Motor accounting for almost 61% of the total premium portfolio of the Company, the nearly 24.3%
increase recorded in the loss ratio of that class for the reporting year was nevertheless significant.

UNDERWRITING SURPLUS AS AT 30.06.16
Engineering Fire & GA

4% 9%
Marine-
Cargo/Transit
Group of "Small 7%
Premiums"*
21%
Pecuniary
20%
Motor
Motor 39%
51%
FINANCIAL YEAR ENDED 30.06.15 FINANCIAL YEAR ENDED 30.06.16

During the year under report, the Companys proven quality of prudent underwriting was also borne out, once again, by
the fact that every class of business it underwrote produced positive technical results or underwriting surplus. On 30
June 2016, the Company had achieved an Underwriting Surplus of Br70,832,073 compared to a similar result of
Br92,115,626 for the previous year (2014/15), an unpleasant decrease by some 23% especially when its total written
premiums grew modestly by only 6.2%.
The underwriting surplus for Motor class of business decreased from 51.35% in the previous year to 38% in the year
2015/16. However, the Motor class of business again accounted for the lions share (38%) of the Companys total
Underwriting Surplus for the year ended 30 June 2016. The "group of small-premium classes (Accident &
Health/Personal Accident/Workmens Compensation and General Liability) was a very far second by contributing 21%
towards the total underwriting surplus followed by pecuniary which constituted 20% of the Surplus. The Fire and
General Accident, Marine and Inland Transit and Engineering class of businesses accounted for 9%, 7% and 4%, of the
Underwriting Surplus, respectively.

NON-LIFE BUSINESS
350,000,000
300,000,000
250,000,000
200,000,000
150,000,000
100,000,000
50,000,000
0
Gross Written Premium Retained Premium (Birr) Underwriting Surplus/

(Birr) Decit (Birr)
LIFE & MEDEXIN - Premium Growth & Overall Performance
During the reporting period, the Company wrote a gross written premium of Br27,045,735, which grew by about 6.3%
as compared to last year. The business is anticipated to grow in the future as well.
The contribution of life insurance business to the overall performance of the Company has started to take momentum
for the fact that, as stated earlier, a transfer of surplus in the tune of Br16.844 million was made possible on the basis
of actuarial valuation undertaken for the year 2015/16. It should be noted here that actuarial valuation of the Life
Business is carried out every two years and there was no such valuation last year.
The result of the said valuation showed that the Life Fund grew significantly, by about 32%, from Br73,154,103 the
previous year to Br96,522,594 as at 30 June 2016. Likewise, Actuarial Liabilities increased to Br54,413,124 in the
reporting year against Br43,093,559 the previous year. It was the Actuarial Surplus that has shown impressive growth
over the last two years which rose by about 132% from Br18,182,888 as at June 30, 2014 to Br42,109,469 as at closing
date of 2015/16 Budget Year.

LIFE & MEDEXIN BUSINESS
100,000,000
90,000,000
80,000,000
70,000,000 Gross Written Premium
(Birr)
60,000,000
50,000,000 Actuarial Surplus (Birr)
40,000,000
30,000,000 Actuarial Liability (Birr)
20,000,000
10,000,000 Life Fund (Birr)
0
Obviously, the considerable increases registered in all the three indicators substantiate the fact that the Company's Life
Business was making more and more improvement and growth over time, though gradual as expected, which ultimately
revealed the commendable underwriting quality and prudent management of the Departments portfolio.
Performance Development - Consolidated
As explained earlier, the Gross Written Premiums of our Companys Non-Life and Life Business had increased almost
by the same growth rate, 6.2% and 6.3% respectively, the major lines of businesses produced a combined premium of
Br341,874,027 for the year under report. The comparative figure for the previous year was Br321,904,307.
While the Total Income achieved as at June 30, 2016 was 13.7% less than the comparative figure for 2014/15, Total
Expenses for the reporting period (Br51,203,607) had remained almost the same as in the previous year
(Br51,016,673).The latter can be taken as indicative of the success the Company has registered in cost control during
the reporting period.
However, closer scrutiny of the expense figures revealed that the major contributor for the expenses to be contained
within check during the reporting was linked to one single expense item captioned as "Provision for Doubtful Debts
which dropped to negative Br1,890,591as at June 30, 2016 from Br4,135,810 the previous year. On the other hand,
while Employees' Salaries and Benefits grew by about 27.8% from Br13,578,255 in 2014/15 to Br17,350,166 as at June
30, 2016, General and Administrative Expenses by some 10% from Br22,528,703 to Br24,780,658, Depreciation and
Amortization by 5.5% from Br9,673,379 to Br10,206,007, a significant drop by 58.55% was seen in the small amount of
Financial Expenses (Br492,587 in 2015/16 Vs Br842,669 a year before). The growing trends in the expenses reflected
in part the continuing general increase in the cost of doing business in the country.

Net Profit before Tax for the reporting year remained almost the same as in the previous year: Br72,345,866 as at 30
June 2016 against Br72,611,669 a year before. Unlike the preceding year, there was a transfer of surplus amounting to
Br16,844,000 from the Life business in the reporting year which was the highest transfer ever so far. It should be noted
that such transfer takes place every two years based on actuarial valuation of the Life Insurance Fund conducted by
licensed professional actuaries placed overseas. After providing Br11,534,073 for Profit Tax, there remained a balance
of Br60,811,793 as Net Profit after Tax for the reporting period. The corresponding balance the previous year was
Br60,293,591.
Despite slight growth in the Net Profit After Tax, Earning Per Share slashed to Br312.63 for the reporting period as
compared to Br384.84 in the preceding year mainly because the Company's Paid-Up Capital grew from Br175,000,000
the previous year to Br234,133,287 as at June 30, 2016, engagement of investments with long-time return (construction
of two buildings with own fund and equity investments with long time return) and increase in claim cost.
Consolidated Development Indicators
350, 000,000
300, 000,000
250,000,000
200,000,000
150,000,000
100,000,000
50,000,000
Prot Before Tax (Birr) Paid Up Capital (Birr) Shareholders' Fund

(Birr)

Shareholders will recall that following their decision at the 9th Extra-Ordinary General Meeting to increase Company's paid
up capital, such capital stood at Br234,133,287 (Br219,133,287 for Non-Life and Br15,000,000 for Life) as at 30 June 2016.
Always keenly aware that volatility in the performance and/or results of insurance companies would remain an inherent
character, your Directors continue to be encouraged by the performance of our Company as reflected by the foregoing
indicators. They remain consistent in their conviction that the commercial and professional quality of an insurance company
may be best judged mainly by, (among others), the final results produced. And by such measures, our Company has, during
the year under report, produced a commendable performance against multiple of challenges faced during the period under
report.
FUTURE PROSPECTS
Whether we like it or not we are in the era of globalization as the rest of the world. In order to emerge as a strong nation,
Ethiopia is also working to pave the ways for membership in regional and global organizations, such as COMESA, FTA,
World Trade Organization (WTO) and the like.
All things remaining the same, as in the last fifteen years, the country's government is determined to take the growth
trajectory forward which is clearly demonstrated in the Second Growth and Transformation Plan (GTP-II). This endeavour is
believed to drive the economy towards the envisaged growth and gradual transformation. It is noticeable that, save the
recent perhaps temporary setbacks, investment has continued to grow and expand, manufacturing being given central role
to play like the establishment of Industrial Zones, expansion of infrastructure like Railways - completed and under
construction. All these developments in the external environments makes the future - both immediate and long-range - quite
promising.
In light of the foregoing, <UNIC-ETHIOPIA> has set a plan to grow by more than industry average to regain its market share
and maintain sustainable growth. This strategic move from bottom line to expansion and growth is considered to elevate the
Company to a-billion-Birr turnover in the few years to come but as anyone may expect, this shift will certainly bring about
compromise in the bottom-line or profitability.
In the current year alone, the Company has planned to open not less than ten outlets, branches or contact offices in Addis
Ababa and in upcountry, in order to expand its market horizon and attain the intended sustainable growth. The Company is
in a good position to tap every venue of opportunities that would open up in the coming periods.
Against all odds, the Company has continued its strive to meet and exceed the needs and expectations of customers. Provid-
ing services that the customers need most, and not what the Company wants to sell, and innovativeness has remained to be
the driving force in this regard. Emergency medical insurance which provides covers for cost of hospitalization in
case insured persons encounter sudden and unexpected life threatening health problems necessitating evacuation to help
the person get access to and treatment at well-equipped health facilities, locally or abroad, was developed in the reporting
year and received green light from the regulatory body pending only some operational arrangements.
In order to reach our customers from anywhere and everywhere, an online sales project, to sell some insurance
products by using internet technology has been finalized and implementation is to start soon, latest before the end of the
second quarter of 2016/17 budget year.
The new and special partnership project for Ethiopian Airlines Sheba Miles customers (whereby such customers would be
awarded Sheba Miles when they buy insurance from <UNIC-ETHIOPIA>), though not expected, started to show encourag-
ing gradual growth in generating premium during the just concluded financial year.
These innovative products, with proper marketing strategy put in place, would certainly pay off overtime in the coming years.
The added advantages of such endeavours could also be seen in terms of competitive edge the Company would gain in due
course of time.
The Company's Head Office Project which is under final stage of construction will be completed early next year (August
2017) and all necessary follow up will be made to get it finished within stated timeline. Company-owned extra space
(1,000m2 in size) behind the acquired building at Bole Medhanealem is planned to house parking lot to be constructed in a
couple of years to come as well. In order to fulfil and comply with the original plan and design permit by the municipality, we
are also looking into the cost-benefit of adding three more layers (floors) to the existing one-storey building at Bahir Dar.
The Company can now boast of the blend of staff it has and will continue to maintain it on the one hand and attract and retain
qualified personnel on the other hand. It will also be a matter of priority, which is given attention by the NBE, to embark inten-
sively and extensively on the development and training of existing staff and new recruits alike.
As stated earlier, the two building projects will also be given due attention as part of long-term strategic move of the
Company.
The sustained growth can only be made possible if customers get proper attention and be provided with the service they
deserve and expect to their best satisfaction. Continuous service improvement will remain to be the key that opens the door
of persistent success for the Company and hence, utmost thought will be given to it.
In general terms, our Company is positioned to meet the expectations of its stakeholders, particularly the ambitions of its
Shareholders, by exploiting opportunities, fending off threats and capitalizing on internal capabilities and working on its
weaknesses.
VOTE OF THANKS
The Board of Directors, Management and Staff of <UNIC-ETHIOPIA> wish to express their deep gratitude to all the
wonderful Customers of the Company for their continued support and patronage.
Our shareholders also deserve special recognition for their investment, persistent backing in general and for vesting
confidence in their own Company by placing all their risks with <UNIC-ETHIOPIA> and we loudly offer big thank you to
all.
We also want to express our indebtedness to the National Bank of Ethiopia and thus would like to appreciate and offer
sincere thanks to the Bank for its continued persistent support and unreserved cooperation.
The Board and Management also wish to record their appreciation for the association the Company enjoys with its reinsurers
and the mutually advantageous business relations it has developed with both domestic and international brokers. The
Company's sales agents merit to receive our warmest admiration and boundless thank you for their immense contribution
towards the Company's sustained growth.
A special thank you is due to all its field officers (frontline staff in general and the branch managers in particular) who have
played and continue to play a pivotal role in the Company's growth. They help it identify the needs of the insuring public on
the one hand and they serve as its ambassadors on the other hand.
Last but not least, both on behalf of the Board and in my own name, I wish to confirm once again that the Company's
Management and Staff demonstrated their commitment to the Companys continued strive for EXCELLENCE: in their
professionalism, commercialism and strong team spirit without which the commendable results achieved would have not
been possible.
__________________________ __________________
Girma Wake Meseret Bezabih
Chairman, Board of Directors & General Manager/CEO
of the Annual General Meeting

Independent Auditors Report
Kokeb & Melkamu Audit Partnership.
Chartered Certified Accountants (UK)
INDEPENDENT AUDITORS REPORT TO THE SHAREHOLDERS

OF THE UNITED INSURANCE COMPANY SC
We have audited the accompanying financial statements of The United Insurance Company SC
<UNIC- ETHIOPIA>, which comprise the Statement of Financial Position as at 30 June 2016, the Statement of
Compressive Income , Revenue Accounts, the Statement of Cash Flows and the Statement of Changes in Equity for
the year then ended, and a summary of significant accounting policies and other explanatory notes, set out on pages
19 to 36 which have been prepared under the historical cost convention and the accounting policies on page 26 to 27.
Respective responsibilities of Management and Auditors
The Management of <UNIC- ETHIOPIA> is responsible for the preparation of the financial statements. It is our
responsibility to form an independent opinion, based on our audit, on those statements and to report our opinion to you.
Basis of opinion
We conducted our audit in accordance with generally accepted auditing standards. An audit includes examination, on a
test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an
assessment of the significant estimates and judgments made by the management in preparation of the financial
statements, and of whether the accounting policies are appropriate to the Company's circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered
necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are
free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion, we also
evaluated the overall adequacy of the presentation of information in the financial statements.
Opinion
In our opinion, the financial statements give a true and fair view of the state of the Companys affairs as at 30 June 2016
and of its results and cash flows for the year then ended in accordance with the accounting policies adopted by the
Company.
We have no comment to make on the report of your Board of Directors so far as it relates to the financial statements and
pursuant to Article 375(2) of the Commercial Code of Ethiopia, and recommend approval of the financial statements.

Audited Financial Report

STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
Currency: Birr
Long term
Notes General Insurance Insurance Total 30.06.15
ASSETS
CURRENT ASSETS
Cash and Cash items
Cash on hand 11,337,705 3,523 11,341,228 3,837,841
Cash at bank saving 411,033 357,317 768,350 1,471,307
Cash at Bank current acount 9,497,383 3,726,971 13,224,354 11,224,613
21,246,121 4,087,811 25,333,932 16,533,761
Debtors
Trade Debtors 1(i),2 21,232,730 - 21,232,730 26,343,244
Provision for doubtful 1(i),2 20,585,237 - 20,585,237 22,475,828
Due from reinsurer 41,990 41,990 -
Sundry 1(i),2 7,795,405 19,367 7,814,772 8,595,791
8,442,898 61,357 8,504,255 12,463,207
Accrued interest recevable 1(i),2 5,904,876 1,496,243 7,401,119 5,732,374
Prepayments 1(i),2 21,772,879 - 21,772,879 23,203,157
Statutory Deposit 9 32,865,542 2,250,000 35,115,542 26,250,000
Short term investment time deposit 201,872,289 60,824,237 262,696,526 217,814,098
Current account with life operation 3,740 (3,740) - -
TOTAL CURRENT ASSETS 292,108,345 68,715,908 360,824,253 301,996,597
Long term investment
Equity/shares 1(i),7 71,172,118 25,639,711 96,811,829 74,462,698
Investment property/Real Estate 10 82,629,075 17,916,667 100,545,742 106,531,793
153,801,193 43,556,378 197,357,571 180,994,491
FIXED ASSETS
Lease hold land 8 5,420,958 - 5,420,958 5,420,958
Accumulated Amortization 8 (1,338,476) - (1,338,476) (1,145,340)
Building 1(e),11 201,048,635 - 201,048,635 143,432,701
Accumulated depreciation 1(e),11 (1,002,253) - (1,002,253) (872,922)
Motor vehicles 1(e),11 25,921,996 967,628 26,889,624 25,246,577
Accumulated depreciation 1(e),11 (14,155,854) (571,288) (14,727,142) (14,130,755)
Furniture and fixtures 1(e),11 4,276,101 114,016 4,390,117 3,331,767
Office Equipment 1(e),11 4,467,008 39,646 4,506,654 4,367,065
Computer hardware 1(e),11 4,372,993 106,735 4,479,728 3,756,092
Software 1(e),11 7,257,975 - 7,257,975 7,117,836
Accumulated depreciation 1(e),11 (5,546,262) - (5,546,262) (4,995,155)
222,654,414 490,388 223,144,802 164,692,535
TOTAL ASSETS 668,563,952 112,762,674 781,326,626 647,683,623

Chairman, Board of Directors General Manager/CEO


STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
General Long term

Notes Insurance Insurance Total Currency: Birr
30.06.15
LIABILITY
CURRENT LIABILITY
Non- Techenical
Payables/creditors 5 35,857,720 912,679 36,770,399 30,436,798
Due to reinsurers 6 35,370,122 156,212 35,526,334 39,832,482
Profit tax payable 4 5,688,562 2,457,353 8,145,915 9,335,573
Dividend payable 5 7,831,003 - 7,831,003 4,251,945
Accrued liablity 5 233,209 68,376 301,585 913,166
84,980,616 3,594,620 88,575,236 84,769,964
Technical provision
Outstanding claims 1( c),3 116,784,919 404,937 117,189,856 87,467,795
Unearned premium (UPP) 1(b) 130,322,300 130,322,300 112,580,390
Other technical provision- Premium 1(d) 4,600,716 4,600,716 7,474,020
Incurred but not reported (IBNR) 24,093,314 - 24,093,314 20,830,615
275,801,249 404,937 276,206,186 228,352,820
Total current Liability 360,781,865 3,999,557 364,781,422 313,122,784
Long term liability
Land lease payable 12 1,897,902 - 1,897,902 2,220,667
Total Liability 362,679,767 3,999,557 366,679,324 315,343,451
CAPITAL AND RESERVE
Paid-up Capital 13 219,133,287 15,000,000 234,133,287 175,000,000
Share premium 6,834,737 - 6,834,737 181,400
Life fund 1(g),19 79,673,476 79,673,476 73,187,309
Profitability bonus for life policy holders 34,247 34,247 90,120
Legal reserve 14 37,835,402 1,405,539 39,240,941 33,159,762
Profit & loss account 42,080,759 12,649,855 54,730,614 50,721,581
305,884,185 108,763,117 414,647,302 332,340,172
Total Liability, Provision and Capital 668,563,952 112,762,674 781,326,626 647,683,623

Chairman, Board of Directors General Manager/CEO


STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
Currency: Birr
Notes 30.06.15
INCOME
Underwriting surplus 1(a) 70,832,073 92,115,626
INCOME FROM INVESTMENT
Interest income 1(j),20 17,539,161 15,053,700
Dividend income 1(j),20 9,435,800 9,301,336
Rent income 20 7,906,976 6,999,115
TOTAL INVESTMENT INCOME 34,881,937 31,354,151
Other non-investment income 321,733 158,565
Gain on sale of fixed assets 21 669,730 -
Total income 106,705,473 123,628,342
EXPENSES
Employees' salaries & benefits 16 17,350,166 13,578,255
Directors' fixed emoluments 17 187,600 182,883
Depreciation & amortization 10,206,007 9,673,379
Office Rent 10,796,684 8,568,990
Ordinary general meeting expenses 212,312 1,682,812
Provision for doubtful debts (1,890,591) 4,135,810
Audit fee 77,180 74,974
Financial expenses 492,587 842,669
General & administrative expenses 18 13,771,662 12,276,901
Total expenses 51,203,607 51,016,673
NET PROFIT BEFORE TAX 55,501,866 72,611,669
Add: Profit from life insurance 16,844,000 0
Provision for profit tax (11,534,073) (12,318,078)
Net profit after tax 60,811,793 60,293,591
Legal reserve (6,081,179) (6,029,359)
Prior year adjustment - (3,542,651)
NET PROFIT AFTER LEGAL RESERVES 54,730,614 50,721,581
Earnings per share 23 312.63 384.84


GENERAL INSURANCE BUSINESS
REVENUE ACCOUNT
Notes Currency: Birr

30.06.15
Gross written premiums 314,828,292 296,465,285
Less: Premium ceded (56,146,773) 78,656,366
Net written premium 258,681,519 217,808,919
Less: Change in unearned premium (17,741,910) 9,502,770
Net earned premium 240,939,609 208,306,149
Add: Commission from Re-insurers 21,801,698 22,898,445
262,741,307 231,204,594
Less:
Net claims incurred 159,433,089 110,949,802
Commissions 17,642,742 13,196,391
(Decrease)/Increase in technical provisions 15 (2,873,304) 967,707
Other technical expenses 17,706,707 13,975,068
191,909,234 139,088,968
Underwriting surplus transferred to
profit & loss account 1(a) 70,832,073 92,115,626


LONG TERM INSURANCE BUSINESS
REVENUE ACCOUNT
Currency: Birr
Notes 30.06.15
INCOME
Life assurance fund at 30 June 2015 73,187,309 55,870,924
Outstanding claims at 30 June 2015 40,000 46,059
Net premium income 17,224,814 13,996,778
Commissions income 3,538,197 4,819,442
93,990,320 74,733,203
LESS:
Life assurance fund at 30 June 2016 79,673,476 73,187,309
Outstanding claims at 30 June 2016 404,937 40,000
Net claims incurred 1,441,492 3,817,204
Commission expense 1,110,441 1,024,081
Policy holders' dividend 5,117 -
Other outgo - 335
82,635,463 78,068,929
Gross operating Income 11,354,857 (3,335,726)
Other income
Interest and others 9,595,908 7,459,367
20,950,765 4,123,641
EXPENSES
Employees' salaries and benefits 16 1,220,874 1,210,722
Directors' fixed emoluments 17 32,400 28,925
Depreciation and amortization 1,125,712 1,154,305
Office rent 257,190 159,463
Ordinary general meeting expense 156,040 244,026
Audit fee 13,620 13,231
Actuaries' fee 126,500 0
Financial expenses 77,715 95,311
General and administrative expenses 18 1,096,714 1,217,658
4,106,765 4,123,641
Profit appropriated 16,844,000 -

STATEMENT OF CASH FLOWS
Currency: Birr
CASH FLOWS FROM OPERATING ACTIVITIES 30.06.15
Net profit before taxation 72,345,866 72,611,669
Prior year adjustment - (3,936,279)
Dividend income (12,500,000) (12,323,420)
Interest income (22,270,957) (8,358,370)
Rent income (9,676,771) (18,131,728)
Interest expense - 347,730
Gain on disposal of fixed asset (669,730) -
Depreciation 5,586,540 5,521,122
Amortization 5,892,336 5,316,186
38,707,284 41,046,910
CHANGE IN WORKING CAPITAL ACTIVITIES
Decrease in debtors 5,431,220 18,172,641
Increase/(Decrease) in amount due to re-insurers
(4,306,148) 10,650,072
(Increase)/Decrease in due from reinsurers (41,991) (162,960)
Increase in outstanding claims and IBNR 32,984,760 (7,460,307)
(Decrease) Increase in unearned premium 17,741,910 9,502,770
(Decrease) Increase in other technical provision 3,556,990 18,272,935
Increase in other creditors ,accruals and provisions 5,130,428 4,857,712
60,497,169 53,832,863
CASH GENERATED FROM OPERATION
Interest paid - (1,842,060)
Profit tax paid and withholding deducted
(12,723,731) (15,024,699)
(12,723,731) (16,866,759)
Net cash inflow from operating activities 86,480,722 78,013,014
INVESTING ACTIVITIES
Investment in equity (22,168,458) (2,096,500)
Purchase/construction of fixed assets (64,242,003) (90,270,800)
Purchase/additions of investment property - (240,138)
Proceeds/adjustment from the sale of fixed assets 983,249
-
Loan to/collection from Life policy holders (180,673)
(244,857)
Lease settlement (322,765) (195,117)
Increase in statutory deposit (8,865,542) (5,125,000)
Investment income received 43,370,575 43,022,827
Net cash used in investing activities (51,425,617) (55,149,585)
FINANCING ACTIVITIES -
Dividend paid (2,221,549) (1,489,808)
Directors' remuneration (1,613,873) (5,638,181)
Premium refund/received-net 6,834,737 173,500
Loan settled/obtained net - (21,305,871)
Additional cash received for shares issued 15,628,179 -
Net cash outflows from financing activities 18,627,494 (28,260,360)
Increase/(Decrease) in cash and bank balances 53,682,599 (5,396,931)

Cash and bank balances at the beginning of the year 234,347,859 239,744,790
Cash and bank balances at the end of the year 288,030,458 234,347,859


STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Currency: Birr
Paid up Share Legal Retained

Capital premium Reserve Earnings
Balance as as 1 July 2014 125,000,000 7,900 27,524,031 56,390,308
Prior year adjustment (393,628) (3,542,651)
Premium refund - - -
Amount reinvested from profit 49,466,463 - - (49,466,463)
Proceeds from sales of shares 533,537 173,500 - -
Dividend and remuneration paid - - - (6,923,845)
Net profit for the year - - - 60,293,591
Transfer to legal reserve - - 6,029,359 (6,029,359)
50,000,000 173,500 5,635,731 (5,668,727)
Balance as at 30 June 2015 175,000,000 181,400 33,159,762 50,721,581
Changes for 2015/2016

Premium availed for distribution (181,400) 181,400
Amount reinvested from profit 43,541,834 - (43,541,834)
Proceeds from sales of shares 15,591,453 6,834,737
Dividend and remuneration paid - - (7,361,147)
Net profit for the year - - - 60,811,793
Transfer to legal reserve - - 6,081,179 (6,081,179)
59,133,287 6,834,737 6,081,179 4,009,033
Balance as at 30 June 2016 234,133,287 6,834,737 39,240,941 54,730,614

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES
The Company had adopted the following major accounting policies for its financial statements, which are prepared
under the historical cost convention and are consistently applied in preparing the present accounts. As the Company
commenced to transact life assurance business since 1st September 1997, separate accounts are also prepared for
this line of business.
(a) Revenue Account
The revenue account surplus is net of reinsurance, provision for unearned premiums, claim paid, outstanding claims
and other technical provisions [see (b), (c) and (d) below.]
(b) Unearned Premiums
The provision for unearned premiums represents premiums relating to periods beyond the balance sheet date, and is
calculated on a time basis using the 24th method of the gross premium of all annual policies, short term policies and long
term policies on the prorate premium, with regard to cession our reinsurance treaty does not provide such kind of
special agreement and hence we have applied same method used above in line with Directive No. SIB/38/2014 issued
by the National Bank of Ethiopia.
(c) Outstanding Claims
This represents provision for the cost of incidents notified on or before the balance sheet date, estimated on the basis
of currently available information as well as provisions for claims incurred but not reported (IBNR) up to the balance
sheet date. IBNR is applied only to non-life insurance. Differences arising from subsequent settlements of outstanding
claims and any recoveries made from previous payments are shown in the revenue accounts of the period in which the
settlements and recoveries are made except recoveries from bonds. This class of account also includes provisions held
for 100% of claims under litigation or in dispute.
(d) Other Technical Provisions
These are amounts provided to help meet the costs of any future loss accumulations arising from specified natural and
man-made perils, and are determined by cumulating to the balance sheet date the excess of income over outgo in
respect of those perils.
(e) Fixed Assets
Fixed assets are stated at cost less accumulated depreciation. Depreciation is computed as per the Income Tax Procla-
mation No. 286/2002, which requires application of straight-line method for buildings & constructions on cost and
pooling system for the others. Accordingly, the depreciation rates per annum are as follows:
(i) Computers 25% pooling
(ii) All other business assets 20% pooling
(iii) Buildings and Constructions 5% straight line method


(f) Life Fund
The actuarial valuation of the Life Insurance Fund is required to be undertaken annually during the first five years after
commencement of such business and at least once every two years thereafter. Until this is done, the profit or loss on
this business for a given financial year is transferred to the Life Insurance Fund. Transfers of any profits from the Life
Insurance Fund to Profit and Loss Account are made on the recommendation of the actuaries following actuarial
valuation.
(g) Land Leasehold
The Company amortizes the cost of land lease over the lease period.
(h) Investments
The Companys investments are stated at cost of acquisition.
(i) Provision for doubtful debts
In compliance with the Insurance Business Proclamation 746/2012, the Company ceased to give insurance on credit
basis, except for governmental organizations, since August 22, 2012. Per the directive of the National Bank of Ethiopia,
100% provision is maintained for trade receivables not collected until December 31, 2014.
(j) Investment income
Investment income is stated net of relevant taxes. Interest income is recognized in the period in which it is earned.
Dividend is recognized in the period in which it is received.
2. DEBTORS, DEPOSITS AND PREPAYMENTS
GENERAL LONG TERM

INSURANCE INSURANCE TOTAL 30.06.15
Trade Debtors 20,770,172 - 20,770,172 23,284,832
Less: Provision 20,585,237 - 20,585,237 22,475,828
184,935 184,935 809,004
Coinsureres 462,558 462,558 3,058,412
Staff Debtors 101,485 - 101,485 58,258
Deposit and Prepayment 21,772,879 - 21,772,879 23,203,157
Accrued Interest & rent rec. 5,904,876 1,496,243 7,401,119 5,732,374
Sundry Debtors 7,693,920 19,367 7,713,287 8,537,533
36,120,653 1,515,610 37,636,263 41,398,738


2.1. Deposits and prepayments which represent advances made to M/S Tracon Trading PLC for the supply of
aluminum in connection with Akaki Kality construction project, M/S National Mining Corporation PLC for supply
of Marble for Akaki Kality construction project,M/S Woder building contractor for construction of finishing work
execution, phase two and site work execution for Akaki Kality construction project, M/S Sintec Ethiopia PLC for
2.1 the supply and installation of one elevator for Akaki Kality construction project and prepaid office rents and
prepaid deposits are as follows respectively.
GENERAL LONG TERM
Tracon Trading PLC 10,427,340 - 10,427,340 7,448,100
National Mining Corp. PLC 2,971,867 - 2,971,867 2,783,252
Woder building Contractor 2,443,939 - 2,443,939 -
Sintec Ethiopia PLC 1,066,186 - 1,066,186 1,066,186
Zamera Construction PLC - - - 10,559,671
Prepaid office rent & advance payment 4,379,915 - 4,379,915 862,316
Prepaid Deposits 483,632 - 483,632 483,632
21,772,879 - 21,772,879 23,203,157
2.2. Sundry debtors balance comprises Br4, 979,598 recoverable from a contractor in connection with advance and
performance guarantees issued to a third party following defaults,Br694,257 prepaid profit tax our policyholders
withheld from premiums they paid to the Company for the period 01 July 2008 to 30 June 2009 and the recovery
of this was not materialized to date from ERCA and Br305,233 tax paid to ERCA for a vehicle entertained under
total loss for company own use, however, ERCA could not finalize the customs process to date.
3. OUTSTANDING CLAIMS
GENERAL LONG TERM
Life Group Term - 404,937 404,937 40,000
Accidents 138,300 - 138,300 12,544
Aircraft 79,984 79,984 183,236
Burglary and house breaking 15,000 15,000 15,000
Engineering 3,688,898 - 3,688,898 2,724,884
Employer's Liability 1,544,290 - 1,544,290 726,575
Fire 372,842 - 372,842 80,034
Goods intransit 76,748 76,748 284,626
Liability 3,081,100 - 3,081,100 1,883,948
Marine 607,465 - 607,465 1,351,027
Medical expense 220,442 220,442 114,111
Motor own Damage 85,320,184 - 85,320,184 58,485,821
Motor Liability 17,049,364 17,049,364 16,845,376
Pecuniary 4,590,302 - 4,590,302 4,720,613
116,784,919 404,937 117,189,856 87,467,795
Out of the total outstanding claims of Br116, 784,919 for general insurance, Br 5,064,933 relates to provisions for
claims under litigation or dispute.


4. PROFIT TAX PAYABLE

30.06.15
Profit before tax 72,345,866 72,611,669
Prior year expenses - (3,936,279)
Add: Disallowable expenses 11,598,247 2,706,780
Depreciation expense (Company policy) 10,206,007
Staff/Customers entertainment 460,085 251,137
Giveaway items 434,218 240,015
Staff award expense 69,129 77,000
Fines and penalties 10,455 1,790
Shareholders' meeting expenses 368,353 1,926,838
Gifts and donations 50,000 11,598,247 2,706,780
83,944,113 71,382,170
Less: Allowed expenses/Gain on disposal
Depreciation expense(as per tax law) (10,087,610)
Gain on disposal of property & equipment (669,730)
Less: Income taxed at source
Dividend income (Life and Non-life) (12,500,000) (12,323,420)
Interest on bank deposits (Life and Non-life) (22,239,863) (17,998,491)
Taxable profit 38,446,910 41,060,259
Provision for tax (30%) 11,534,073 12,318,078
Prepaid Profit tax (Life Br331,253, Non Life Br3,056,905) (3,388,158) (2,982,505)
Profit tax payable 8,145,915 9,335,573
Taxation assessments have been made by the Ethiopian Revenue and Customs Authority(ERCA) in respect of
profit, VAT, withholding taxes up to 30 June 2007.


5. OTHER CREDITORS, ACCRUALS AND PROVISIONS
GENERAL LONG TERM

Sundry creditors 2,286,226 751,412 3,037,638 2,964,749
Deposits - - - 1,857,141
Deferred income 8,491,846 - 8,491,846 2,442,903
Rent advance 2,904,040 2,904,040 2,312,448
Debtors with credit balance 3,333,040 3,333,040 3,432,621
Uncollected checks 2,683,956 2,683,956 2,654,836
Claims payable 349,863 349,863 1,397,884
Retention 7,012,733 7,012,733 4,516,371
Commission payable 2,624,478 - 2,624,478 3,015,318
Provisions 6,171,538 161,267 6,332,805 5,842,527
35,857,720 912,679 36,770,399 30,436,798
5.1. Retention fees payable include Br114, 373 for BahirDar building, Br3, 056,144 for Akaki Kality building project
and Br3, 792,216 for Head office building at Tewodros Square.
5.2. Provisions include Br2, 040,740 for staff leave pay, Br3, 674,665 for staff bonus pay and Br300, 000 for possible
expenses in connection with the Annual General Meeting of Shareholders.
5.3. Sundry Creditors include Br510, 725 payroll tax pay, Br209, 093 WHT pay, Br841,735 Insurance fund pay,
Br129, 092 staff pension fund pay and Br532, 379 VAT payable.
6. DUE TO/FROM REINSURERS
GENERAL LONG TERM

Due to reinsurers 35,370,122 2,001,111 37,371,233 40,170,599
Due from reinsurers - 1,886,890 1,886,890 338,117
35,370,122 3,888,001 39,258,123 39,832,482


7. EQUITY/SHARES-INVESTMENTS
GENERAL LONG TERM
Equity Investment
United Bank SC 47,179,000 15,321,000 62,500,000 50,000,000
Share premium at United Bank SC 1,049,660 344,090 1,393,750 1,393,750
Raya Beer SC 7,000,000 5,000,000 12,000,000 12,000,000
Share premium at Raya Beer SC 350,000 250,000 600,000 600,000
Raaz Transport SC 1,500,000 1,500,000 1,500,000
Share premium at RAAZ Transport
SC 96,500 96,500 96,500
Ethiopian Reinsurance SC 10,250,000 2,500,000 12,750,000 500,000
Habesha Cement SC 5,000,000 - 5,000,000 5,000,000
Share premium at Habesha Cement
SC 300,000 - 300,000 300,000
Government bond 43,458 43,458 2,625,000
Loans to life policy holders - 628,121 628,121 447,448
71,172,118 25,639,711 96,811,829 74,462,698
8. LEASEHOLD LAND
Leasehold periods for the land acquired at BahirDar and Kality,Bole Medhanealem are 60, 50 and 12 years
respectively.
GENERAL LONG TERM

Cost or valuation
Bahir Dar 707,400 - 707,400 707,400
Kality 3,264,729 3,264,729 3,264,729
Bole Medhanealem 1,448,829 - 1,448,829 1,448,829
5,420,958 - 5,420,958 5,420,958
Accumulated Amortization
Bahir Dar 205,560 - 205,560 193,770
Kality 891,444 - 891,444 830,834
Bole Medhanealem 241,472 - 241,472 120,736
1,338,476 - 1,338,476 1,145,340
NET BOOK VALUE 4,082,482 - 4,082,482 4,275,618


9. STATUTORY DEPOSIT
This is an amount deposited in Government securities with the National Bank of Ethiopia in satisfaction of Article 9
of the Licensing and Supervision of Insurance Business Proclamation No. 86/1994 which stipulates that every
insurer shall, in respect of each main class of insurance business he carries on in Ethiopia, deposit and keep
deposited with the Bank, an amount equal to fifteen percent (15%) of his paid up capital, in cash or Government
Securities as part of security arrangements for the benefit of policy holders as a body.
The Statutory deposit has been sanctioned for the acquisition of the Great Renaissance Dam Bond.
GENERAL LONG TERM
Opening balance 24,000,000 2,250,000 26,250,000 18,750,000
Addition 8,865,542 - 8,865,542 7,500,000
32,865,542 2,250,000 35,115,542 26,250,000
10. INVESTMENT PROPERTY

GENERAL LONG TERM
Building cost Bole Medhanialem 93,983,998 20,000,000 113,983,998 113,983,998
Buildin cost Bahir Dar 5,737,019 - 5,737,019 5,737,019
99,721,017 20,000,000 119,721,017 119,721,017
Accumulated Depreciation
Bole Medhanialem 14,510,283 2,083,333 16,593,616 10,894,416
Bahir Dar 2,581,659 - 2,581,659 2,294,808
17,091,942 2,083,333 19,175,275 13,189,224
NET BOOK VALUE 82,629,075 17,916,667 100,545,742 106,531,793
The Company built a building at Bahirdar and acquired a multi-purpose building in Addis Ababa Bole Sub city for Birr
108,100,000in an open tender during a foreclosure by the United Bank. Birr 5,883,998 was additionally paid in
connection with title transfer fees.


11. PROPERTY, PLANT AND EQUIPMENT
General Insurance Long term Insurance
Balance Balance Balance Balance

COST 1/7/2015 Additions Disposal 30/6/2016 1/7/2015 Additions Transfer 30/6/2016
- - -

-
-
Sub total
ACCUMULATED DEPRECIATION
- - -

- -

Sub total
NET BOOK VALUE 157,519,572 215,990,273 602,537 490,388
Computers and accessories include Birr7, 257,975, being cost of software, hardware, servers, installation,
implementation, networking and other related costs in connection with an integrated insurance management
information system implementation project.
12. LAND LEASE PAYABLE
GENERAL LONG TERM
Land lease payables 1,897,902 - 1,897,902 2,220,667
The balance is due to the Addis Ababa City Administration in connection with Kality and Bole Medhanealem
leaseholds.
13. SHARE CAPITAL (PAR VALUE @ BIRR 1,000 EACH)
No. OF SHARES AMOUNT 30.06.15

Subscribed 250,000 250,000,000 175,000,000
Fully paid 234,133 234,133,000 175,000,000
The amount stated as subscribed capital represents the total outcome of the provisions of Resolution No.
UNIC/AGM21/04/2015 of the 10th Extra -Ordinary meeting of shareholders which was held on 22nd October 2015 as
stipulated under Article 8, 9 and 13 of the Article of Association of the Company.

14. LEGAL RESERVE
This is a reserve constituted in accordance with Article 12 of Proclamation No. 86/1994 Licensing and Supervision
of Insurance Business, and is built up by the transfer of ten percent (10%) of annual profits after tax until the amount
of the reserve equals the amount of the paid up capital.
GENERAL LONG TERM
Opening balance 33,159,762 - 33,159,762 27,524,031
Additions 4,659,100 1,405,539 6,064,639 5,635,731
37,818,862 1,405,539 39,224,401 33,159,762
15. INCREASE IN TECHNICAL PROVISION

The provision represents:
30.06.15
(Decrease)/Increase in provision for natural and man made perils
as per 1 (d) (2,873,304) 967,707
16. EMPLOYEES SALARIES AND BENEFIT

Employee's salaries and benefits directly attributable to the Company's Non-Life operations are charged to the
Revenue Account as follows:
30.06.15
Total employees salaries and benefits 35,044,842 27,442,986
Less : Apportioned to Life Operations (344,510) (286,476)
34,700,332 27,156,510
Employees salaries and benefits transferred to
Revenue Account (50%) 17,350,166 13,578,255
Balance on Profit and Loss Account (50%) 17,350,166 13,578,255
The Company maintains provident fund and pension schemes for employees where it contributes 14% for provident
and pension schemes (adjusting the difference with the pension) on the basis of employees basic salaries.All
employees benefits are in accordance with the Labour Proclamation No. 377/2003 and Labour Proclamation
Amendment No. 494/2006.
As of June 30, 2016, the Company has 289 employees: 135 men and 154 women.
17. DIRECTORS REMUNERATION

This represents remuneration to directors and incentive to chief executive officer which was paid in connection with the
Companys 7.5% and 2.5% of the net profit for the year ended 30 June 2014, respectively. Effective 1 September 2014,
the National Bank of Ethiopia issued Directive No. SIB/37/2014 titled Limits on Board Remuneration and Number of
Employees Who Sit on the Board of an Insurer. Accordingly to the Directive, annual board compensation to a director
shall not exceed Birr 50,000 and the monthly allowances paid to a director shall not exceed Birr 2,000.Since 1st day of
June 2016, the National Bank of Ethiopia issued new amended Directive No. SIB/43/2016 under the same title, annual
compensation to be paid upon the decision of ordinary general meeting to a director shall not exceed Birr 100,000 and
the monthly allowance shall not exceed Birr 4000.


18. GENERAL AND ADMISTRATIVE EXPENDITURES

GENERAL LONG TERM
Advertising and promotions 2,460,048 235,598 2,695,646 3,796,928
Stationeries, printing & office supplies 2,200,340 309,419 2,509,759 1,873,015
Communication 2,331,268 13,412 2,344,680 1,704,130
Transport and travel 1,730,869 93,793 1,824,662 2,010,388
Repairs and maintenance 2,833,399 30,555 2,863,954 1,497,638
Property insurance 592,613 27,544 620,157 516,911
Gifts and donation 100,000 - 100,000 220,000
Professional services other than audit 97,122 - 97,122 522,243
Other general and admin. expenses 1,426,003 386,393 1,812,396 1,353,306
13,771,662 1,096,714 14,868,376 13,494,559
19. ACTUARIAL VALUATIONS

An actuarial valuation of the Companys Life Business as of 30 June 2016 was carried out by our consulting actuaries,
M/S Alexander Forbes Financial Services (EA) Limited. The valuation revealed after establishing prudent mathematical
reserves, an actuarial surplus of Br42, 109,469 being the difference between the life Fund of Br96, 522,594 and
actuarial liabilities amounting to Br54, 413,124. The actuaries had recommended 40%( totaling Br16,844,000) for
distribution from surplus to shareholders for the year ended 30 June 2016 and a reversionary bonus of 4% of the basic
sum assured (Br5,117) to with profit ordinary life policies for each completed policy year over the inter-valuation
period.
20. INVESTMENT INCOME
GENERAL LONG TERM

Interest on time deposit 15,873,369 4,521,992 20,395,361 16,907,817
Interest on savings 27,748 42,567 70,315 58,207
Interest on Government Savings bond 1,638,044 136,143 1,774,187 1,032,467
Interest on policy loans - 31,094 31,094 26,200
Cash dividend 9,435,800 3,064,200 12,500,000 12,323,420
Rent income 7,906,976 1,769,795 9,676,771 8,358,370
34,881,937 9,565,791 44,447,728 38,706,481
21. OTHER INCOME

GENERAL LONG TERM
Gain on disposal of investment/fixed asset 669,730 - 669,730 -
Others 321,640 63,324 384,964 232,396
991,370 63,324 1,054,694 232,396


22. CASH AND CASH EQUIVALENT

2016 2015 CHANGE 30.06.15
Cash & bank balances 24,565,582 15,062,454 9,503,128 (7,495,321)
Bank deposits at interest 263,464,876 219,285,405 44,179,471 2,098,390
288,030,458 234,347,859 53,682,599 (5,396,931)
Cash & bank balances include Birr 1,044,759 blocked in connection with legal proceedings existing in different
courts.
23. EARNINGS PER SHARE

Earnings per share is calculated by dividing net profit for the year attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares outstanding during the year.
The United Insurance Company S.C.
Report on the Statutory Actuarial Valuation of the Life Fund as at 30 June 2016
24. CAPITAL COMMITMENT
The Company has 13.aAppendix
remaining capital commitment
E: Actuarys of Br 210,000,000 in connection with Akaki-Kality mixed building
Solvency Certificate
project and Head Office building construction at Tewodrose Square site.

The United Insurance
Report CompanyActuarial
on the Statutory S.C. Valuation of the Life Fund as at 30 June 2016
13. Appendix
25. COMPARATIVE FIGURES
E: Valuation
Actuarial ActuarysasSolvency Certificate
at 30 June 2016
In order to facilitate comparison,
Actuarys Solvency
Report certain
on the figures
Certificate
Statutory as at 30.06.15
Actuarial were
Valuation of the rearranged
Life Fund as in these
at 30 Juneaccounts.
2016
13. Appendix E: Actuarys Solvency Certificate
I, James Israel Omanyala Olubayi of Alexander Forbes Financial Services (EA) Limited, Landmark
Plaza,
Actuarial 10th Floor,
Valuation ACTUARYS
as atArgwings SOLVENCY
Kodhek Road,
30 June 2016 CERTIFICATE
P O Box 52439, Nairobi 00200, Kenya, being a fully
qualified Actuary and having conducted an actuarial valuation of the Life Fund as at 30 June 2016
The United
Actuarys
using Insurance
Solvency Company
acceptableS.C.
generallyCertificate actuarial principles do hereby certify as under:-
Actuarial
I, Jamesa) Valuation
Israelthat inas
my
Omanyala at opinion
30 Junethe
Olubayi 2016
of value placed
Alexander upon Financial
Forbes the aggregate
Servicesliabilities relating Landmark
(EA) Limited, to the long term
insurance business of The United Insurance Company
Plaza, 10th Floor, Argwings Kodhek Road, P O Box 52439, Nairobi 00200, Kenya, being of S.C. in respect policies of
a fully
Actuarys valuation
Solvency
qualified Actuary adopted
andCertificate
having by me an
conducted hasactuarial
been arrived at using
valuation of the aLifeprofessionally
Fund as at 30 sound
Juneand
2016prudent
actuarial basis;
using generally acceptable actuarial principles do hereby certify as under:-
I, James Israel Omanyala Olubayi of Alexander Forbes Financial Services (EA) Limited, Landmark
b) that I am satisfied that the value of assets adopted by me are, on the basis of the auditors
Plaza,
a) 10th
that Floor,
my Argwings
in certificate
opinion Kodhek
the valuetoRoad,
placed Pupon
O Box
the 52439, Nairobi
aggregate 00200,
liabilities Kenya,
relating to being
the a fully
appended the balance sheet, fully of the value so adopted; andlong term
qualified insurance
Actuary and having conducted
business of The Unitedan actuarial valuation
Insurance of the Life
Company S.C.Fund as at 30ofJune
in respect 2016of
policies
valuation
using generally adopted actuarial
acceptable by me has been arrived
principles at using
do hereby certifyaasprofessionally
under:- sound and prudent
actuarial basis;
a) that in my opinion the value placed upon the aggregate liabilities relating to the long term
b) that I am business
insurance satisfied that the value
of The of assets
United adopted
Insurance by me are,
Company S.C.oninthe basis of
respect of the auditors
policies of
certificateadopted
valuation appended by to
methehas
balance
been sheet,
arrivedfully of the value
at using so adopted;sound
a professionally and and prudent
actuarial basis;
b) that I am satisfied that the value of assets adopted

James by me are, on the basis of the auditors
I. O. Olubayi
certificate appended to the balance sheet, fully of the value so adopted; and
Fellow of the Institute of Actuaries
Nairobi James I. O. Olubayi

Fellow of the Institute of Actuaries
August 2016
James I. O. Olubayi
Nairobi Fellow of the Institute of Actuaries
August 2016

Branch Offices
City Branches
Branch Name P.O.Box Tel. Cell/Mobile Fax
Addis Ketema 183091 011 276 2575 0966 21 58 48 011 276 6868
Arada 25869 011 155 8787 0966 21 63 56 011 155 8788
AratKilo 1156 011 156 1162 0966 21 63 58 011 156 4798
Ayer-Tena 1156 011 347 1798 0966 21 63 62 011 347 1799
Beklo Bet 17340 011 665 5225 0911 23 6520 011 465 5246
Bole Medhanialem 1156 011 662 5799 0966 21 58 68 011 662 5814
Gofa 1156 011 470 3917 0966 21 58 67 011 470 3821
Gotera 1156 011 467 2211 0911 25 48 87 011 467 1630
Gullele 183091 011 155 9986 0966 21 58 54 011 157 9898
Head Office Branch 1156 011 465 5656 0966 21 63 50 011 465 3258
Kality 1156 011 442 3917 0966 21 63 59 011 442 3916
Kazanchis 1156 011 558 5047 0966 21 63 46 011 558 5038
Kirkos 42285 0118685721/550 2956 0966 21 63 47 011 550 9898
Leghar 1156 011 550 6052 0935 98 69 42 011 551 6788
Lideta 40045 011 554 5756 0966 21 58 60 011 554 5755
Lion 661/1110 011 551 5656 0911 25 48 89 011 553 4799
Megenagna 1156 011 618 0223 0966 21 58 59 011 618 0983
Mesalemia 50118 011 275 5268 0966 21 58 57 011 275 5271
Misrak 10164 011 662 8121 0966 21 58 66 011 662 3599
Teklehaimanot 1156 011 276 6608 0966 21 58 58 011 213 9107
Upcountry Branches
Branch Name P.O.Box Tel. Cell/Mobile Fax
Adama 896 022 111 3426 0911 90 10 91 022 112 0207
Bahir Dar 1082 058 220 1777 0918 76 02 09 058 220 1798
Bale Robe 022 244 0014 0966 21 63 54 022 244 0014
Bishoftu 011 437 1634 0935 69 9841 011 433 0925
Dessie 1185 033 111 1128 0966 21 58 61 033 111 1129
Dire Dawa 2199 025 111 0280 0966 21 58 65 025 111 4099
Gonder 39 058 111 4626 0935 98 34 24 058 111 4616
Hawassa 931 046 220 6610 0966 21 58 64 046 220 3793
Hosaena 419 046 555 2151 0966 21 58 63 046 555 3091
Jimma 1308 047 111 9440 0966 21 58 62 047 111 9490
Mekelle 1395 034 440 3934 0966 21 58 47 034 440 3933
Contact Offices
CMC 1156 0116676173 0929 319 578 0116676343
Gerji 1156 0116394699 0929 319 579 0116394698
Jemo 1156 0114713786 0929 319 580 0114713665

Corporate Head Office: Alpaulo Building, Debrezeit Road

Tel: +251 (0)11 4655656 Fax: +251 (0)11 465 3258 P.O.Box: 1156
Emails: united.insurance@unic-ethiopia.com, info@unic-ethiopia.com
Website: www.unic-ethiopia.com

2016 Annual Report

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2016 Annual Report

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THE UNITED INSURANCE COMPANY SC

Anytime and from

Ato Girma Wake

Ato Yemane Bisrat Ato Taye Dibekulu

Ato Abera Tasew

Wo Akiko Seyoum Ato Mulualem Birhane

Eng. Samrawit Getamessay Ato Getachew Ashine

Ato Tesfaye Desta Wo Azalech Yirgu Ato Dawit G/Ammanuel

Ato Aliye Mohammed Ato Mesfin Eyasu

To provide complete insurance covers at economic rates, honest, prompt,

Striving for Excellence

Report of the Board of Directors

Statement of Financial Position as at 30 June 2016 19

Statement of Comprehensive Income 20

General Insurance Business 21

Long Term Insurance Business 22

Statement of Cash Flow for the Year Ended 30 June 2016 23

Statements of changes in Shareholders Equity 24

Notes Forming Part of the Financial Statements 25-36

1. To Consider and approve the Agenda items of the meeting;

2. To consider and approve the Report of the Board of Directors;

4. To decide on the appropriation of net results of the Company's operations;

5. To decide and approve Board remuneration;

8. To approve sale and/or transfer of the Companys shares up to and including

BY ORDER OF THE BOARD

Dated at Addis Ababa this 10thday of October 2016.

Annual Report 2015/16 1

Chairman, Board of Directors &

2 Annual Report 2015/16

REPORT OF THE BOARD OF DIRECTORS

Annual Report 2015/16 3

Status Report on Miscellaneous Matters Raised in Previous Reports

Directives No.: SRB/1/2014 - Reinsurance Company Establishment

Directives No.: SIB/44/2016 Manner and Criteria of Transacting Reinsurance by Insurers

4 Annual Report 2015/16

Directives No.: SIB/41/2016 Monitoring the Nationality of Shareholders in an

Directive No.: SIB/43/2016 Limits on Board Remunerations

Annual Report 2015/16 5

The Dangers of Uneconomic Premiums

6 Annual Report 2015/16

Annual Report 2015/16 7

8 Annual Report 2015/16

FINANCIAL PERFORMANCE AND RESULTS - NON LIFE

Gross Premiums Written

Annual Report 2015/16 9

Retention and Reinsurance

PREMIUM STRUCTURE AS AT 30.06.16

FINANCIAL YEAR ENDED 30.06.15 FINANCIAL YEAR ENDED 30.06.16

10 Annual Report 2015/16

Claims and Profitability Loss Ratio and Underwriting Surplus/(Deficit)

Annual Report 2015/16 11

UNDERWRITING SURPLUS AS AT 30.06.16

Engineering Fire & GA

FINANCIAL YEAR ENDED 30.06.15 FINANCIAL YEAR ENDED 30.06.16

12 Annual Report 2015/16

Gross Written Premium Retained Premium (Birr) Underwriting Surplus/

LIFE & MEDEXIN - Premium Growth & Overall Performance

Annual Report 2015/16 13

LIFE & MEDEXIN BUSINESS

Performance Development - Consolidated

14 Annual Report 2015/16

Consolidated Development Indicators

Prot Before Tax (Birr) Paid Up Capital (Birr) Shareholders' Fund