| Notes forming part of accounts [line items] | | |
| Disclosure of notes and other explanatory information [text block] | | |
| Disclosure of general information about reporting entity [abstract] | | |
| Disclosure of general information about reporting entity [text block] | 1.GENERALThe Company for Cooperative Insurance (the “Company”) is a Saudi joint stock Company established in Riyadh, Kingdom of Saudi Arabia by Royal Decree Number M/5 and incorporated on January 18, 1986 corresponding to Jumada Al-Awal 8, 1406H under Commercial Registration No. 1010061695. The Company’s head office is located on Thumamah Road (At Takhassusi) ArRabi District, P.O. Box 86959, Riyadh 11632, Kingdom of Saudi Arabia.The purpose of the Company is to transact cooperative insurance operations and all related activities including reinsurance and agency activities. Its principal lines of business include medical, motor, marine, fire, engineering, energy, aviation, takaful and casualty insurance.On July 31, 2003 corresponding to Jumada Thani 2, 1424H the Law on the Supervision of Cooperative Insurance Companies (“Insurance Law”) was promulgated by Royal Decree Number (M/32). On December 1, 2004 corresponding to Shawwal 18, 1425H, the Saudi Arabian Monetary Authority (“SAMA”) as the principal authority responsible for the application and administration of the Insurance Law and its implementing regulations, granted the Company a license to transact insurance activities in Saudi Arabia.The Company conducts the business and advances funds to the insurance operations as required. On January 20, 2004 the Company amended its Articles of Association giving authority to the Board of Directors to determine the disposition of the surplus from insurance operations.On March 20, 2004, the Board of Directors approved the distribution of the surplus from insurance operations in accordance with the Implementing Regulations issued by SAMA, whereby the shareholders of the Company are to receive 90% of the annual surplus from insurance operations and the policyholders are to receive the remaining 10%. Any deficit arising on insurance operations is transferred to the shareholders’ operations in full. | 1 |
| Disclosure of basis of preparation of financial statements [text block] | 2.BASIS OF PREPARATION(a)Statement of complianceThe interim condensed financial information of the Company as at and for the period ended March 31, 2020 have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting (“IAS 34”) as endorsed in the Kingdom of Saudi Arabia and other standards and pronouncements issued by Saudi Organization for Certified Public Accountants (“SOCPA”)The financial statements of the Company as at and for the period and year ended 31 March 2019 and 31 December 2018, respectively, were prepared in compliance with the IAS 34 and the International Financial Reporting Standards (“IFRS”) respectively, as modified by SAMA for the accounting of zakat and income tax (relating to the application of IAS 12 – “Income Taxes” and IFRIC 21 – “Levies” so far as these relate to zakat and income tax).On 18 July 2019, SAMA instructed the insurance companies in the Kingdom of Saudi Arabia to account for the zakat and income taxes in the statement of income. This aligns with the IFRS and its interpretations as issued by the International Accounting Standards Board (“IASB”) and as endorsed in the Kingdom of Saudi Arabia and with the other standards and pronouncements that are issued by the Saudi Organisation for Certified Public Accountants (“SOCPA”) (collectively referred to as “IFRS as endorsed in KSA”).Accordingly, the Company changed its accounting treatment for zakat by retrospectively adjusting the impact in line with International Accounting Standard 8, Accounting Policies, Changes in Accounting Estimates and Errors and the effects of this change are disclosed in note 17 to the interim condensed financial information.The interim condensed financial information is prepared under the going concern basis and the historical cost convention, except for the measurement at fair value of available for sale investments and investment in associates which is accounted for under the equity method and end of service benefits based on actuarial valuation techniques. The Company’s interim condensed statement of financial position is not presented using a current/non-current classification. However, the following balances would generally be classified as non-current: statutory deposit, accrued income on statutory deposit, property and equipment, intangible assets, investment property, investments in associates, available for sale investments, reserve for discontinued operations, end-of-service indemnities and return payable on statutory deposit. All other financial statement line items would generally be classified as current.The Company presents its statement of financial position in order of liquidity. As required by the Saudi Arabian Insurance Regulations, the Company maintains separate books of accounts for Insurance Operations and Shareholders’ Operations and presents the financial statements accordingly (Note 18). Assets, liabilities, revenues and expenses clearly attributable to either activity are recorded in the respective accounts. The basis of allocation of expenses from joint operations is determined and approved by the management and the Board of Directors.The interim statement of financial position, statement of income, comprehensive income and cash flows of the insurance operations and shareholders operations which are presented in Note 18 of the financial statement have been provided as supplementary financial information to comply with the requirements of the guidelines issued by SAMA implementing regulations and is not required under IFRSs. SAMA implementing regulations requires the clear segregation of the assets, liabilities, income and expenses of the insurance operations and the shareholders operations. Accordingly, the interim statements of financial position, statements of income, comprehensive income and cash flows prepared for the insurance operations and shareholders operations as referred to above, reflect only the assets, liabilities, income, expenses and comprehensive income or losses of the respective operations.In preparing the Company-level financial statement in compliance with IFRS, the balances and transactions of the insurance operations are amalgamated and combined with those of the shareholders’ operations. Inter-operation balances, transactions and unrealised gains or losses, if any, are eliminated in full during amalgamation. The accounting policies adopted for the insurance operations and shareholders’ operations are uniform for like transactions and events in similar circumstances.The interim condensed financial information does not include all of the information required for full annual financial information and should be read in conjunction with the annual financial statement as of and for the year ended December 31, 2019. This interim condensed financial information is expressed in Saudi Arabian Riyals (SAR) and is rounded off to the nearest thousands.(b)Critical accounting judgments, estimates and assumptionsThe preparation of the interim condensed financial statements requires the use of estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates and judgments are based on management’s best knowledge of current events and actions, actual results ultimately may differ from those estimates. Estimates and judgments are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.In preparing this interim condensed financial information, the significant judgments made by the management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial statements for the year ended 31 December 2019. Further, the Company has considered the following:On 11 March 2020, the World Health Organisation (“WHO”) declared the Coronavirus (“Covid-19”) outbreak as a pandemic in recognition of its rapid spread across the globe. This outbreak has also affected the GCC region including the Kingdom of Saudi Arabia. Governments all over the world took steps to contain the spread of the virus. Saudi Arabia in particular has implemented closure of borders, released social distancing guidelines and enforced country wide lockdowns and curfews.In response to the spread of the Covid-19 virus in the GCC region and other territories, including the Kingdom of Saudi Arabia, where the Company operates and its consequential disruption to the social and economic activities in those markets, the Company’s management has proactively assessed its impacts on its operations and has taken a series of proactive and preventative measures and processes to ensure:-the health and safety of its employees and the wider community where it is operating-the continuity of its business throughout the Kingdom is protected and kept intact.Also refer subsequent event note 21 in relation to SAMA Circular 189 issued on 8 May 2020 in response to the Covid-19 pandemic.Following are the accounting judgments and estimates that are critical in preparation of this interim condensed financial information:i)The ultimate liability arising from claims made under insurance contractsThe estimation of the ultimate liability arising from claims made under insurance contracts is the Company’s most critical accounting estimate. There are several sources of uncertainty that need to be considered in the estimate of the liability that the Company will ultimately pay for such claims. Estimates are made at the end of the reporting period both for the expected ultimate cost of claim reported and for the expected ultimate costs of claims incurred but not reported (“IBNR”). Liabilities for unpaid reported claims are estimated using the input of assessments for individual cases reported to the Company. At the end of each reporting period, prior year claims estimates are reassessed for adequacy and changes are made to the provision.The provision for claims incurred but not reported (IBNR) is an estimation of claims which are expected to be reported subsequent to the date of statement of financial position, for which the insured event has occurred prior to the date of statement of financial position. The primary technique adopted by management in estimating the cost of notified and IBNR claims, is that of using the past claims settlement trends to predict future claims settlement trends. A range of methods such as Chain Ladder Method, Bornhuetter-Ferguson Method and Expected Loss Ratio Method are used by the actuaries to determine these provisions. Actuary had also used a segmentation approach including analysing cost per member per year for medical line of business. Underlying these methods are a number of explicit or implicit assumptions relating to the expected settlement amount and settlement patterns of claims.ii) Impairment of available-for-sale financial assetsThe Company determines that available-for-sale financial assets are impaired when there has been a significant or prolonged decline in the fair value of the available-for-sale financial assets below its cost. The determination of what is significant or prolonged requires judgment. For equity and mutual funds, a period of 12 months or longer is considered to be prolonged and a decline of 30% from original cost is considered significant as per Company policy. In making this judgment, the Company also evaluates among other factors, the normal volatility in share price, the financial health of the investee, industry and sector performance, changes in technology, and operational and financing cash flows. iii) Impairment of receivablesA provision for impairment of receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganization, and default or delinquency in payments are considered indicators that the receivable is impaired.iv)Fair value of financial instrumentsFair values of available-for-sale investments are based on quoted prices for marketable securities or estimated fair values. The fair value of commission-bearing items is estimated based on discounted cash flows using commission for items with similar terms and risk characteristics.The fair value of financial instruments where no active market exists or where quoted prices are not otherwise available are determined by using valuation techniques. In these cases the fair values are estimated from observable data in respect of similar financial instruments or using models. Where market observable inputs are not available, they are estimated based on appropriate assumptions. Where valuation techniques (for example, models) are used to determine fair values, they are validated and periodically reviewed. All models are calibrated to ensure that outputs reflect actual data and comparative market prices. To the extent practical, models use only observable data; however, areas such as credit risk (both own credit risk and counterparty risk), volatilities and correlations require management to make estimates. Please refer fair value of financial instruments disclosure in note 14. The accounting and risk management policies adopted in the preparation of these condensed interim financial information are consistent with the Company’s audited financial statements for the year ended December 31, 2019, except for adoption of the amendments to existing standards which has had no material impact on the financial information of the Company.v)Impact of covid-19 on the medical technical reserves and financial assetsMedical technical reservesNotwithstanding these challenges, the Company’s management believes that the technical reserves for medical line of business remain largely unaffected as the insurance industry is facilitated by the Saudi Arabian Government initiative of bearing all costs associated with Covid-19 pandemic, which include testing and treatment cost. Moreover, there is a general decrease in trend of medical claims, which are of routine nature, received by the company since Covid-19 pandemic was declared.. Furthermore, the industry likewise has not experienced significantly high number of reported claims. Based on these factors, the Company’s management believes that the Covid-19 pandemic has had no material effects on Company’s reported results for the three-month period ended 31 March 2020. The Company’s management continues to monitor the situation closely.Other financial assetsThe Company has performed an assessment in accordance with its accounting policy due to the Covid-19 pandemic to determine whether there is objective evidence that a financial asset or group of financial assets has been impaired. These include factors such as, significant financial difficulties of issuers or debtors, default or delinquency in payments, probability that the issuer or debtor will enter bankruptcy or other financial reorganisation, etc. In case of equities classified under available-for-sale, the Company has performed an assessment to determine whether there is a significant decline in the fair value of financial assets below their cost. Based on these assessments, the Company’s management believes that the Covid-19 pandemic has had no material effects on Company’s reported results for the three month period ended 31 March 2020. The Company’s management continues to monitor the situation closely.(c)Significant accounting policiesThe accounting policies used in the preparation of the interim condensed financial information are consistent with those followed in the preparation of the Company’s annual financial statements for the year ended 31 December 2019:i) Standards issued but not yet effectiveIn addition to the above mentioned standards, the following standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective. Further, the Company has chosen not to early adopt the amendments and revisions to the International Financial Reporting Standards which have been published and are mandatory for compliance for the Company with effect from future dates.IFRS 9 - “Financial instruments”This standard was published on July 24, 2014 and has replaced IAS 39. The new standard addresses the following items related to financial instruments:i) Classification and measurement:IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost, at fair value through other comprehensive income or at fair value through profit or loss. A financial asset is measured at amortized cost if both:the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; andthe contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding (“SPPI”).The financial asset is measured at fair value through other comprehensive income and realized gains or losses are recycled through profit or loss upon sale, if both conditions are met:the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows and for sale; andthe contractual terms of cash flows are SPPI,Assets not meeting either of these categories are measured at fair value through profit or loss. Additionally, at initial recognition, an entity can use the option to designate a financial asset at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch.For equity instruments that are not held for trading, an entity can also make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of the instruments (including realized gains and losses), dividends being recognized in profit or loss.Additionally, for financial liabilities that are designated as at fair value through profit or loss, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognized in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss.ii) Impairment:The impairment model under IFRS 9 reflects expected credit losses, as opposed to incurred credit losses under IAS 39. Under the IFRS 9 approach, it is no longer necessary for a credit event to have occurred before credit losses are recognized. Instead, an entity always accounts for expected credit losses and changes in those expected credit losses. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition.iii) Hedge accounting:IFRS 9 introduces new requirements for hedge accounting that align hedge accounting more closely with Risk Management. The requirements establish a more principles-based approach to the general hedge accounting model. The amendments apply to all hedge accounting with the exception of portfolio fair value hedges of interest rate risk (commonly referred to as “fair value macro hedges”). For these, an entity may continue to apply the hedge accounting requirements currently in IAS 39. This exception was granted largely because the IASB is addressing macro hedge accounting as a separate project.iv) Effective dateThe published effective date of IFRS 9 was 1st January 2018. However, amendments to IFRS 4 – Insurance Contracts: Applying IFRS 9 – Financial Instruments with IFRS 4 – Insurance Contracts, published on 12th September 2016, changes the existing IFRS 4 to allow entities issuing insurance contracts within the scope of IFRS 4 to mitigate certain effects of applying IFRS 9 before the IASB’s new insurance contract standard (IFRS 17 – Insurance Contracts) becomes effective. The amendments introduce two alternative options:-Apply a temporary exemption from implementing IFRS 9 until the earlier of:the effective date of a new insurance contract standard; orannual reporting periods beginning on or after January 1, 2021. (The IASB is proposing to extend the effective date of IFRS 17 and the IFRS 9 temporary exemption in IFRS 4 to January 1, 2023). Additional disclosures related to financial assets are required during the deferral period. This option is only available to entities whose activities are predominately connected with insurance and have not applied IFRS 9 previously; or-Adopt IFRS 9 but, for designated financial assets, remove from profit or loss the effects of some of the accounting mismatches that may occur before the new insurance contract standard is implemented. During the interim period, additional disclosures are required.The Company has performed a detailed assessment beginning 1 January 2018: (1) The carrying amount of the Company’s liabilities arising from contracts within the scope of IFRS 4 (including deposit components or embedded derivatives unbundled from insurance contracts) were compared to the total carrying amount of all its liabilities; and (2) the total carrying amount of the company’s liabilities connected with insurance were compared to the total carrying amount of all its liabilities. Based on these assessments the Company determined that it is eligible for the temporary exemption. Consequently, the Company has decided to defer the implementation of IFRS 9 until the effective date of the new insurance contracts standard. Disclosures related to financial assets required during the deferral period are included in the Company’s financial statements.IFRS 17 - “Insurance Contracts”, applicable for the period beginning on or after 1 January 2022, and will supersede IFRS 4 “Insurance Contracts”. Earlier adoption permitted if both IFRS 15 “Revenue from Contracts with Customers” and IFRS 9 “Financial Instruments” have also been applied. The Company expects a material impact on measurement and disclosure of insurance and reinsurance that will affect both the statement of income and the statement of financial position. The Company has decided not to early adopt this new standard. (d) Segmental reportingA segment is a distinguishable component of the Company that is engaged in providing products or services (a business segment), which is subject to risk and rewards that are different from those of other segments. For management purposes, the Company is organized into business units based on their products and services and has eight reportable segments as follows:Medical - coverage for health insurance.Medical Umrah - coverage for health insurance for pilgrims.Motor insurance.Manafeth - third party liability insurance for foreign vehicles and the profit of this segment is shared with other insurance companies.Property and Casualty - coverage for property, engineering, marine, aviation, energy and general accidents insurance.General accidents insurance - coverage for pilgrims.Protection & Savings.Shareholders’ segment - reporting shareholder operations of the Company. Income earned from investments is the only revenue generating activity. Certain direct operating expenses and other overhead expenses are allocated to this segment on an appropriate basis. The surplus or loss from the insurance operations is allocated to this segment on an appropriate basis.Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the chief executive officer that makes strategic decisions. No inter-segment transactions occurred during the period. (e) Seasonality of operationsOther than normal seasonality in Medical Insurance Business in the Kingdom of Saudi Arabia, there are no seasonal changes that may affect insurance operations of the Company. | 2 |
| Disclosure of statement of compliance [text block] | 2.BASIS OF PREPARATION(a)Statement of complianceThe interim condensed financial information of the Company as at and for the period ended March 31, 2020 have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting (“IAS 34”) as endorsed in the Kingdom of Saudi Arabia and other standards and pronouncements issued by Saudi Organization for Certified Public Accountants (“SOCPA”)The financial statements of the Company as at and for the period and year ended 31 March 2019 and 31 December 2018, respectively, were prepared in compliance with the IAS 34 and the International Financial Reporting Standards (“IFRS”) respectively, as modified by SAMA for the accounting of zakat and income tax (relating to the application of IAS 12 – “Income Taxes” and IFRIC 21 – “Levies” so far as these relate to zakat and income tax).On 18 July 2019, SAMA instructed the insurance companies in the Kingdom of Saudi Arabia to account for the zakat and income taxes in the statement of income. This aligns with the IFRS and its interpretations as issued by the International Accounting Standards Board (“IASB”) and as endorsed in the Kingdom of Saudi Arabia and with the other standards and pronouncements that are issued by the Saudi Organisation for Certified Public Accountants (“SOCPA”) (collectively referred to as “IFRS as endorsed in KSA”).Accordingly, the Company changed its accounting treatment for zakat by retrospectively adjusting the impact in line with International Accounting Standard 8, Accounting Policies, Changes in Accounting Estimates and Errors and the effects of this change are disclosed in note 17 to the interim condensed financial information.The interim condensed financial information is prepared under the going concern basis and the historical cost convention, except for the measurement at fair value of available for sale investments and investment in associates which is accounted for under the equity method and end of service benefits based on actuarial valuation techniques. The Company’s interim condensed statement of financial position is not presented using a current/non-current classification. However, the following balances would generally be classified as non-current: statutory deposit, accrued income on statutory deposit, property and equipment, intangible assets, investment property, investments in associates, available for sale investments, reserve for discontinued operations, end-of-service indemnities and return payable on statutory deposit. All other financial statement line items would generally be classified as current.The Company presents its statement of financial position in order of liquidity. As required by the Saudi Arabian Insurance Regulations, the Company maintains separate books of accounts for Insurance Operations and Shareholders’ Operations and presents the financial statements accordingly (Note 18). Assets, liabilities, revenues and expenses clearly attributable to either activity are recorded in the respective accounts. The basis of allocation of expenses from joint operations is determined and approved by the management and the Board of Directors.The interim statement of financial position, statement of income, comprehensive income and cash flows of the insurance operations and shareholders operations which are presented in Note 18 of the financial statement have been provided as supplementary financial information to comply with the requirements of the guidelines issued by SAMA implementing regulations and is not required under IFRSs. SAMA implementing regulations requires the clear segregation of the assets, liabilities, income and expenses of the insurance operations and the shareholders operations. Accordingly, the interim statements of financial position, statements of income, comprehensive income and cash flows prepared for the insurance operations and shareholders operations as referred to above, reflect only the assets, liabilities, income, expenses and comprehensive income or losses of the respective operations.In preparing the Company-level financial statement in compliance with IFRS, the balances and transactions of the insurance operations are amalgamated and combined with those of the shareholders’ operations. Inter-operation balances, transactions and unrealised gains or losses, if any, are eliminated in full during amalgamation. The accounting policies adopted for the insurance operations and shareholders’ operations are uniform for like transactions and events in similar circumstances.The interim condensed financial information does not include all of the information required for full annual financial information and should be read in conjunction with the annual financial statement as of and for the year ended December 31, 2019. This interim condensed financial information is expressed in Saudi Arabian Riyals (SAR) and is rounded off to the nearest thousands. | 2 (a) |
| Disclosure of issued IFRS not yet adopted [text block] | (c)Significant accounting policiesThe accounting policies used in the preparation of the interim condensed financial information are consistent with those followed in the preparation of the Company’s annual financial statements for the year ended 31 December 2019:i) Standards issued but not yet effectiveIn addition to the above mentioned standards, the following standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective. Further, the Company has chosen not to early adopt the amendments and revisions to the International Financial Reporting Standards which have been published and are mandatory for compliance for the Company with effect from future dates.IFRS 9 - “Financial instruments”This standard was published on July 24, 2014 and has replaced IAS 39. The new standard addresses the following items related to financial instruments:i) Classification and measurement:IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost, at fair value through other comprehensive income or at fair value through profit or loss. A financial asset is measured at amortized cost if both:the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; andthe contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding (“SPPI”).The financial asset is measured at fair value through other comprehensive income and realized gains or losses are recycled through profit or loss upon sale, if both conditions are met:the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows and for sale; andthe contractual terms of cash flows are SPPI,Assets not meeting either of these categories are measured at fair value through profit or loss. Additionally, at initial recognition, an entity can use the option to designate a financial asset at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch.For equity instruments that are not held for trading, an entity can also make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of the instruments (including realized gains and losses), dividends being recognized in profit or loss.Additionally, for financial liabilities that are designated as at fair value through profit or loss, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognized in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. | 2 (c) i |
| Disclosure of critical accounting judgements, estimates and assumptions, general [text block] | (b)Critical accounting judgments, estimates and assumptionsThe preparation of the interim condensed financial statements requires the use of estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates and judgments are based on management’s best knowledge of current events and actions, actual results ultimately may differ from those estimates. Estimates and judgments are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.In preparing this interim condensed financial information, the significant judgments made by the management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial statements for the year ended 31 December 2019. Further, the Company has considered the following:On 11 March 2020, the World Health Organisation (“WHO”) declared the Coronavirus (“Covid-19”) outbreak as a pandemic in recognition of its rapid spread across the globe. This outbreak has also affected the GCC region including the Kingdom of Saudi Arabia. Governments all over the world took steps to contain the spread of the virus. Saudi Arabia in particular has implemented closure of borders, released social distancing guidelines and enforced country wide lockdowns and curfews.In response to the spread of the Covid-19 virus in the GCC region and other territories, including the Kingdom of Saudi Arabia, where the Company operates and its consequential disruption to the social and economic activities in those markets, the Company’s management has proactively assessed its impacts on its operations and has taken a series of proactive and preventative measures and processes to ensure:-the health and safety of its employees and the wider community where it is operating-the continuity of its business throughout the Kingdom is protected and kept intact.Also refer subsequent event note 21 in relation to SAMA Circular 189 issued on 8 May 2020 in response to the Covid-19 pandemic.Following are the accounting judgments and estimates that are critical in preparation of this interim condensed financial information:i)The ultimate liability arising from claims made under insurance contractsThe estimation of the ultimate liability arising from claims made under insurance contracts is the Company’s most critical accounting estimate. There are several sources of uncertainty that need to be considered in the estimate of the liability that the Company will ultimately pay for such claims. Estimates are made at the end of the reporting period both for the expected ultimate cost of claim reported and for the expected ultimate costs of claims incurred but not reported (“IBNR”). Liabilities for unpaid reported claims are estimated using the input of assessments for individual cases reported to the Company. At the end of each reporting period, prior year claims estimates are reassessed for adequacy and changes are made to the provision.The provision for claims incurred but not reported (IBNR) is an estimation of claims which are expected to be reported subsequent to the date of statement of financial position, for which the insured event has occurred prior to the date of statement of financial position. The primary technique adopted by management in estimating the cost of notified and IBNR claims, is that of using the past claims settlement trends to predict future claims settlement trends. A range of methods such as Chain Ladder Method, Bornhuetter-Ferguson Method and Expected Loss Ratio Method are used by the actuaries to determine these provisions. Actuary had also used a segmentation approach including analysing cost per member per year for medical line of business. Underlying these methods are a number of explicit or implicit assumptions relating to the expected settlement amount and settlement patterns of claims.ii) Impairment of available-for-sale financial assetsThe Company determines that available-for-sale financial assets are impaired when there has been a significant or prolonged decline in the fair value of the available-for-sale financial assets below its cost. The determination of what is significant or prolonged requires judgment. For equity and mutual funds, a period of 12 months or longer is considered to be prolonged and a decline of 30% from original cost is considered significant as per Company policy. In making this judgment, the Company also evaluates among other factors, the normal volatility in share price, the financial health of the investee, industry and sector performance, changes in technology, and operational and financing cash flows. iii) Impairment of receivablesA provision for impairment of receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganization, and default or delinquency in payments are considered indicators that the receivable is impaired.iv)Fair value of financial instrumentsFair values of available-for-sale investments are based on quoted prices for marketable securities or estimated fair values. The fair value of commission-bearing items is estimated based on discounted cash flows using commission for items with similar terms and risk characteristics.The fair value of financial instruments where no active market exists or where quoted prices are not otherwise available are determined by using valuation techniques. In these cases the fair values are estimated from observable data in respect of similar financial instruments or using models. Where market observable inputs are not available, they are estimated based on appropriate assumptions. Where valuation techniques (for example, models) are used to determine fair values, they are validated and periodically reviewed. All models are calibrated to ensure that outputs reflect actual data and comparative market prices. To the extent practical, models use only observable data; however, areas such as credit risk (both own credit risk and counterparty risk), volatilities and correlations require management to make estimates. Please refer fair value of financial instruments disclosure in note 14. The accounting and risk management policies adopted in the preparation of these condensed interim financial information are consistent with the Company’s audited financial statements for the year ended December 31, 2019, except for adoption of the amendments to existing standards which has had no material impact on the financial information of the Company.v)Impact of covid-19 on the medical technical reserves and financial assetsMedical technical reservesNotwithstanding these challenges, the Company’s management believes that the technical reserves for medical line of business remain largely unaffected as the insurance industry is facilitated by the Saudi Arabian Government initiative of bearing all costs associated with Covid-19 pandemic, which include testing and treatment cost. Moreover, there is a general decrease in trend of medical claims, which are of routine nature, received by the company since Covid-19 pandemic was declared.. Furthermore, the industry likewise has not experienced significantly high number of reported claims. Based on these factors, the Company’s management believes that the Covid-19 pandemic has had no material effects on Company’s reported results for the three-month period ended 31 March 2020. The Company’s management continues to monitor the situation closely.Other financial assetsThe Company has performed an assessment in accordance with its accounting policy due to the Covid-19 pandemic to determine whether there is objective evidence that a financial asset or group of financial assets has been impaired. These include factors such as, significant financial difficulties of issuers or debtors, default or delinquency in payments, probability that the issuer or debtor will enter bankruptcy or other financial reorganisation, etc. In case of equities classified under available-for-sale, the Company has performed an assessment to determine whether there is a significant decline in the fair value of financial assets below their cost. Based on these assessments, the Company’s management believes that the Covid-19 pandemic has had no material effects on Company’s reported results for the three month period ended 31 March 2020. The Company’s management continues to monitor the situation closely. | 2 (b) |
| Disclosure of summary of significant accounting policies [abstract] | | |
| Disclosure of summary of significant accounting policies, general comment [text block] | (c)Significant accounting policiesThe accounting policies used in the preparation of the interim condensed financial information are consistent with those followed in the preparation of the Company’s annual financial statements for the year ended 31 December 2019:i) Standards issued but not yet effectiveIn addition to the above mentioned standards, the following standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective. Further, the Company has chosen not to early adopt the amendments and revisions to the International Financial Reporting Standards which have been published and are mandatory for compliance for the Company with effect from future dates.IFRS 9 - “Financial instruments”This standard was published on July 24, 2014 and has replaced IAS 39. The new standard addresses the following items related to financial instruments:i) Classification and measurement:IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost, at fair value through other comprehensive income or at fair value through profit or loss. A financial asset is measured at amortized cost if both:the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; andthe contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding (“SPPI”).The financial asset is measured at fair value through other comprehensive income and realized gains or losses are recycled through profit or loss upon sale, if both conditions are met:the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows and for sale; andthe contractual terms of cash flows are SPPI,Assets not meeting either of these categories are measured at fair value through profit or loss. Additionally, at initial recognition, an entity can use the option to designate a financial asset at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch.For equity instruments that are not held for trading, an entity can also make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of the instruments (including realized gains and losses), dividends being recognized in profit or loss.Additionally, for financial liabilities that are designated as at fair value through profit or loss, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognized in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss.ii) Impairment:The impairment model under IFRS 9 reflects expected credit losses, as opposed to incurred credit losses under IAS 39. Under the IFRS 9 approach, it is no longer necessary for a credit event to have occurred before credit losses are recognized. Instead, an entity always accounts for expected credit losses and changes in those expected credit losses. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition.iii) Hedge accounting:IFRS 9 introduces new requirements for hedge accounting that align hedge accounting more closely with Risk Management. The requirements establish a more principles-based approach to the general hedge accounting model. The amendments apply to all hedge accounting with the exception of portfolio fair value hedges of interest rate risk (commonly referred to as “fair value macro hedges”). For these, an entity may continue to apply the hedge accounting requirements currently in IAS 39. This exception was granted largely because the IASB is addressing macro hedge accounting as a separate project.iv) Effective dateThe published effective date of IFRS 9 was 1st January 2018. However, amendments to IFRS 4 – Insurance Contracts: Applying IFRS 9 – Financial Instruments with IFRS 4 – Insurance Contracts, published on 12th September 2016, changes the existing IFRS 4 to allow entities issuing insurance contracts within the scope of IFRS 4 to mitigate certain effects of applying IFRS 9 before the IASB’s new insurance contract standard (IFRS 17 – Insurance Contracts) becomes effective. The amendments introduce two alternative options:-Apply a temporary exemption from implementing IFRS 9 until the earlier of:the effective date of a new insurance contract standard; orannual reporting periods beginning on or after January 1, 2021. (The IASB is proposing to extend the effective date of IFRS 17 and the IFRS 9 temporary exemption in IFRS 4 to January 1, 2023). Additional disclosures related to financial assets are required during the deferral period. This option is only available to entities whose activities are predominately connected with insurance and have not applied IFRS 9 previously; or-Adopt IFRS 9 but, for designated financial assets, remove from profit or loss the effects of some of the accounting mismatches that may occur before the new insurance contract standard is implemented. During the interim period, additional disclosures are required.The Company has performed a detailed assessment beginning 1 January 2018: (1) The carrying amount of the Company’s liabilities arising from contracts within the scope of IFRS 4 (including deposit components or embedded derivatives unbundled from insurance contracts) were compared to the total carrying amount of all its liabilities; and (2) the total carrying amount of the company’s liabilities connected with insurance were compared to the total carrying amount of all its liabilities. Based on these assessments the Company determined that it is eligible for the temporary exemption. Consequently, the Company has decided to defer the implementation of IFRS 9 until the effective date of the new insurance contracts standard. Disclosures related to financial assets required during the deferral period are included in the Company’s financial statements.IFRS 17 - “Insurance Contracts”, applicable for the period beginning on or after 1 January 2022, and will supersede IFRS 4 “Insurance Contracts”. Earlier adoption permitted if both IFRS 15 “Revenue from Contracts with Customers” and IFRS 9 “Financial Instruments” have also been applied. The Company expects a material impact on measurement and disclosure of insurance and reinsurance that will affect both the statement of income and the statement of financial position. The Company has decided not to early adopt this new standard. | 2 (c) |
| Description of accounting policy for segment reporting [text block] | (d) Segmental reportingA segment is a distinguishable component of the Company that is engaged in providing products or services (a business segment), which is subject to risk and rewards that are different from those of other segments. For management purposes, the Company is organized into business units based on their products and services and has eight reportable segments as follows:Medical - coverage for health insurance.Medical Umrah - coverage for health insurance for pilgrims.Motor insurance.Manafeth - third party liability insurance for foreign vehicles and the profit of this segment is shared with other insurance companies.Property and Casualty - coverage for property, engineering, marine, aviation, energy and general accidents insurance.General accidents insurance - coverage for pilgrims.Protection & Savings.Shareholders’ segment - reporting shareholder operations of the Company. Income earned from investments is the only revenue generating activity. Certain direct operating expenses and other overhead expenses are allocated to this segment on an appropriate basis. The surplus or loss from the insurance operations is allocated to this segment on an appropriate basis.Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the chief executive officer that makes strategic decisions. No inter-segment transactions occurred during the period. | 2 (d) |
| Description of accounting policy for seasonality of operations [text block] | (e) Seasonality of operationsOther than normal seasonality in Medical Insurance Business in the Kingdom of Saudi Arabia, there are no seasonal changes that may affect insurance operations of the Company. | 2 (e) |
| Disclosure of notes forming part of accounts [abstract] | | |
| Disclosure of reinsurers/ retakaful share of outstanding claims, net [text block] | "7.UNEARNED PREMIUM AND GROSS OUTSTANDING CLAIMS AND RESERVES, NET(ii)Gross outstanding claims and reserves, net comprise of the following:March 31,December 31,20202019(Unaudited)(Audited)SAR’000Gross outstanding claims 3,512,643 3,717,931 Less: Realizable value of salvage and subrogation (34,133) (33,040) 3,478,510 3,684,891 Add: Incurred but not reported claims reserve 1,830,035 1,925,584 Add: Premium deficiency reserve 16,853 2,830 Gross outstanding claims and reserves 5,325,398 5,613,305 Less: Reinsurers’ share of gross outstanding claims (2,899,357) (3,100,446)Less: Reinsurers’ share of incurred but not reported claims (304,806) (327,724)Reinsurers’ share of outstanding claims and reserves (3,204,163) (3,428,170)Net outstanding claims and reserves 2,121,235 2,185,135 There are several sources of uncertainty that need to be considered in the estimate of the liability that the Company will ultimately pay for such claims. The management and external actuary had made a detailed assessment of technical reserves and the various parameters in the valuation of technical liabilities. As at March 31, 2020, based on the recommendations of external actuary, management had recorded technical reserves (Gross outstanding claims and reserves) which amounted to SAR 5.32 billion (2019: SAR 5. 61 billion). Significant portion of reserves relates to property and casualty and medical line of business which are a best-estimate of the expected ultimate claim trends as at March 31, 2020." | 7 (ii) |
| Disclosure of reinsurers/ retakaful share of unearned premium/ contributions, net [text block] | 7.UNEARNED PREMIUM AND GROSS OUTSTANDING CLAIMS AND RESERVES, NET(i)The movement in unearned premiums is as follows:March 31, 2020December 31, 2019(Unaudited)(Audited)GrossDue from reinsurersNetGrossDue from reinsurersNetSAR’000Balance as at the beginning of the period / year 3,826,119 (715,959) 3,110,160 3,820,293 (544,839) 3,275,454 Premiums written during the period / year 2,572,707 (157,378) 2,415,329 8,375,860 (1,650,188) 6,725,672 Premiums earned during the period / year (2,291,429) 365,438 (1,925,991) (8,370,034) 1,479,068 (6,890,966)Balance as at the end of the period / year 4,107,397 (507,899) 3,599,498 3,826,119 (715,959) 3,110,160 | 7 (i) |
| Disclosure of investments [text block] | 5.MUDARABA/ MURABAHA DEPOSITSThe deposits are held with banks and financial institution registered with Capital Market Authority in the Kingdom of Saudi Arabia. These deposits are predominately in Mudaraba structures. These deposits are denominated in SAR and have an original maturity of more than three months to one year and yield on average financial incomes at rates 3.26%. The movements in deposits during the period/ year is as follows:March 31, 2020(Unaudited)December 31,2019(Audited)SAR’000Insurance OperationsBalance at the beginning of the period/ year 1,577,912 1,387,500 Placed during the period/ year 1,791,161 5,534,846 Proceeds during the period/ year (1,995,776) (5,344,434) Balance at the end of the period/ year1,373,297 1,577,912 Shareholders’ OperationsBalance at the beginning of the period/ year 1,961,464 851,625 Placed during the period/ year 1,920,790 5,362,907 Matured during the period/ year (1,954,206) (4,253,068)Balance at the end of the period/ year 1,928,048 1,961,464 Total 3,301,345 3,539,376 | 5 |
| Disclosure of investments in available-for-sale investments [text block] | 4.AVAILABLE-FOR-SALE INVESTMENTSAvailable-for-sale investments comprise the following:March 31, 2020(Unaudited)December 31,2019(Audited)SAR’000Insurance OperationsMutual funds 50,558 53,165Fixed income portfolio (Governments and corporations securities ) 1,657,372 1,213,310Discretionary Portfolio Management – Equity shares 351,405 157,084Sukuks - 6,341Funds placed with portfolio manager - 81,624Total 2,059,335 1,511,524Shareholders’ OperationsMutual funds 621,717 651,917Fixed income portfolio (Governments and corporations securities) 320,257 388,344Discretionary Portfolio Management – Equity shares 194,453 122,723 Funds placed with portfolio manager - 72,240Total 1,136,427 1,235,224Total available-for-sale investments3,195,7622,746,748Movements in available-for-sale investments are as follows:March 31, 2020(Unaudited)December 31, 2019(Audited)Quoted securitiesUnquoted securitiesTotalQuoted securitiesUnquoted securitiesTotalSAR’000Insurance OperationsBalance at the beginning of the period / year162,837 1,348,687 1,511,524 - 1,234,907 1,234,907 Purchases179,440 527,456 706,896 153,750 360,277 514,027 Disposals - (163,663) (163,663)- (430,787) (430,787)Changes in fair value of Investments9,128 (4,550)4,578 9,087 184,290 193,377 Balance as at the end of the period/ year 351,405 1,707,930 2,059,335 162,837 1,348,687 1,511,524 Shareholders’ OperationsBalance at the beginning of the period/ year194,980 1,040,244 1,235,224 - 1,670,223 1,670,223 Purchases- 123,750 123,750 179,939 234,552 414,491 Disposals (1,002)(206,249) (207,251)- (992,865) (992,865)Changes in fair value of Investments475 (15,771) (15,296)15,041 128,334 143,375 Balance as at the end of the period/ year194,453 941,974 1,136,427 194,980 1,040,244 1,235,224 Total545,8582,649,9043,195,762357,8172,388,9312,746,748As at March 31, 2020 the Company investment in Shraiah Notes amounting to SAR 2.8 billion (2019: SAR 2.5 billion). The Shraiah Notes are issued by a special purpose vehicle “SPV” established in Cayman Islands. The administrator of these Shariah Notes is a Company registered in Dubai International Financial Center in Dubai. The underlying investments of Shariah Notes include mutual funds, private equity funds, discretionary portfolio management – equity shares and fixed income portfolios. The legal ownership of these underlying investments is not with the Company, however, the Company is the ultimate beneficial owner of the underlying investments while having control over the Shariah Notes and underlying investments. The custody of the underlying investments is in the custody account of the SPV or its nominee entity opened with fund and portfolio managers.The movement of changes in fair value of investments is as follows:Three months ended March 31, 2020(Unaudited)Three months ended March 31, 2019(Unaudited)SAR’000Insurance OperationsChange in fair value4,57880,587 Impairment on available-for-sale investments2,637- 7,21580,587Shareholders’ OperationsChange in fair value (15,296)100,539Net amount recycled to interim statement of income (18,216)1,145Impairment on available-for-sale investments 2,175 - (31,337)101,684Total(24,122)182,271 | 4 |
| Disclosure of premiums/ contributions and insurance/ reinsurance or takaful/ retakaful balance receivables [text block] | 3.RECEIVABLES, NETReceivables comprise net amounts due from the following:March 31, 2020(Unaudited)December 31,2019(Audited)SAR’000Policyholders502,476668,599Brokers and agents1,629,656806,205Related parties (note 13)168,506122,2832,300,6381,597,087Receivables from reinsurers 75,238 45,015 Administrative service plan 3,632 5,434 2,379,5081,647,536Provision for doubtful receivables(167,262)(151,642)Receivables, net2,212,2461,495,894 | 3 |
| Disclosure of cash and cash equivalents [text block] | 6.CASH AND CASH EQUIVALENTSMarch 31, 2020(Unaudited)December 31,2019(Audited)SAR’000Insurance OperationsBank balances and cash 677,424 1,297,401 677,424 1,297,401 Shareholders’ OperationsBank balances and cash 13,976 9,149 13,976 9,149 Total cash and cash equivalents 691,400 1,306,550 Bank balances and cash includes call account balance of SAR 6.2 million (December 31, 2019: SAR 1.2 million). Bank balances (including off-balance sheet exposures) are placed with counterparties with sound credit ratings under Standard and Poor's and Moody’s ratings methodology. | 6 |
| Disclosure of statutory deposit [text block] | 10.STATUTORY DEPOSITIn compliance with Article 58 of the Insurance Implementing Regulations of SAMA, the Company has deposited 10 percent of its share capital, amounting to SAR 125 million (December 31, 2019: SAR 125 million), in a bank designated by SAMA. The statutory deposit is maintained with the National Commercial Bank and can be withdrawn only with the consent of SAMA. | 10 |
| Disclosure of gross unearned premiums/ contributions [text block] | 7.UNEARNED PREMIUM AND GROSS OUTSTANDING CLAIMS AND RESERVES, NET(i)The movement in unearned premiums is as follows:March 31, 2020December 31, 2019(Unaudited)(Audited)GrossDue from reinsurersNetGrossDue from reinsurersNetSAR’000Balance as at the beginning of the period / year 3,826,119 (715,959) 3,110,160 3,820,293 (544,839) 3,275,454 Premiums written during the period / year 2,572,707 (157,378) 2,415,329 8,375,860 (1,650,188) 6,725,672 Premiums earned during the period / year (2,291,429) 365,438 (1,925,991) (8,370,034) 1,479,068 (6,890,966)Balance as at the end of the period / year 4,107,397 (507,899) 3,599,498 3,826,119 (715,959) 3,110,160 | 7 (i) |
| Disclosure of gross outstanding claims/ benefits [text block] | 7.UNEARNED PREMIUM AND GROSS OUTSTANDING CLAIMS AND RESERVES, NET(ii)Gross outstanding claims and reserves, net comprise of the following:March 31,December 31,20202019(Unaudited)(Audited)SAR’000Gross outstanding claims 3,512,643 3,717,931 Less: Realizable value of salvage and subrogation (34,133) (33,040) 3,478,510 3,684,891 Add: Incurred but not reported claims reserve 1,830,035 1,925,584 Add: Premium deficiency reserve 16,853 2,830 Gross outstanding claims and reserves 5,325,398 5,613,305 Less: Reinsurers’ share of gross outstanding claims (2,899,357) (3,100,446)Less: Reinsurers’ share of incurred but not reported claims (304,806) (327,724)Reinsurers’ share of outstanding claims and reserves (3,204,163) (3,428,170)Net outstanding claims and reserves 2,121,235 2,185,135 There are several sources of uncertainty that need to be considered in the estimate of the liability that the Company will ultimately pay for such claims. The management and external actuary had made a detailed assessment of technical reserves and the various parameters in the valuation of technical liabilities. As at March 31, 2020, based on the recommendations of external actuary, management had recorded technical reserves (Gross outstanding claims and reserves) which amounted to SAR 5.32 billion (2019: SAR 5. 61 billion). Significant portion of reserves relates to property and casualty and medical line of business which are a best-estimate of the expected ultimate claim trends as at March 31, 2020. | 7 (ii) |
| Disclosure of zakat [text block] | 17.ZAKATStatus of assessmentsThe Company had filed Zakat returns with the General Authority of Zakat and Tax (“GAZT”) for the years from 2005 to 2018. In relation to 2005 and 2006, the Company has settled the amount of SR 53 million in relation to the assessment raised by GAZT that was paid by the provision created against the assessment of those years. For the assessment of the years 2007 to 2013, GAZT issued a final demand order amounting to SR 235 million for zakat and withholding tax. The Company settled the agreed amount from the zakat and withholding tax provisions during July 2019. Furthermore, GAZT has yet to commence its review and assessments for the years 2014 and 2018. Management believes that, appropriate provisions have been created that finalization of the above mentioned assessments is not expected to have a material impact on the interim condensed financial information.Change in accounting treatment in relation to zakat and income taxThe change in the accounting treatment for zakat and income tax has the following impact on the line items of the statements of income, comprehensive income and changes in shareholders’ equity. There is no impact on the statement of financial position as at 31 December 2019 and statement of cash flows for the period ended March 31, 2019.As at and for the three months ended 31 March 2019 – SAR in ‘000Financial statement impactedAccountAs previously stated for three months ended 31 March 2019Effect of restatement relating to zakatAs restated for three months ended 31 March 2019Statement of income and comprehensive incomeZakat charge for the year - (16,984)(16,984)Statement of incomeBasic and diluted loss per share 0.37(0.14)0.23Statement of income and comprehensive incomeNet income attributable to the shareholders46,028(16,984)29,044Statement of change in shareholders’ equityZakat charge for the year(16,984)16,984-Statement of change in shareholders’ equityTotal comprehensive income after zakat46,028(16,984)29,044 | 17 |
| Disclosure of classes of share capital [text block] | 8.SHARE CAPITALThe authorized, issued and paid up capital of the Company was SAR 1.25 billion at March 31, 2020 (December 31, 2019: SAR 1.25 billion) consisting of 125 million shares (December 31, 2019: 125 million shares) of SAR 10 each. Shareholding structure of the Company is as below. The shareholders of the Company are subject to zakat.March 31, 2020Authorized and issuedPaid upNo. of SharesSAR’000Held by the public 79,025,509 790,255 790,255 Public Pension Agency 23,612,685 236,127 236,127 General Organization for Social Insurance 22,361,806 223,618 223,618 125,000,000 1,250,000 1,250,000 December 31, 2019Authorized and issuedPaid upNo. of SharesSAR’000Held by the public 79,025,509 790,255 790,255 Public Pension Agency 23,612,685 236,127 236,127 General Organization for Social Insurance 22,361,806 223,618 223,618 125,000,000 1,250,000 1,250,000 | 8 |
| Disclosure of statutory reserve [text block] | 11.LEGAL RESERVEIn accordance with the Articles of Association of the Company and in compliance with Article 70(2)(g) of the Insurance Implementing Regulations issued by SAMA, the Company is required to allocate 20% of its net income for the year to the legal reserve until it equals the value of share capital. This transfer is only made at the year end. The legal reserve is not available for distribution to the shareholders until the liquidation of the Company. | 11 |
| Disclosure of fair value reserve on investments [text block] | 14.FAIR VALUES OF FINANCIAL INSTRUMENTSFair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or the most advantageous) market between market participants at the measurement date under current market conditions regardless of whether that price is directly observable or estimated using another valuation technique. The fair values of recognised financial instruments are not significantly different from the carrying values included in the financial information. The estimated fair values of financial instruments are based on quoted market prices, when available. Determination of fair value and fair value hierarchyThe Company uses the following hierarchy for determining and disclosing the fair value of financial instruments: -Level 1: quoted market price: financial instruments with quoted unadjusted prices for identical instruments in active markets. -Level 2: quoted prices in active markets for similar assets and liabilities or other valuation techniques for which all significant inputs are based on observable market data.-Level 3: valuation techniques for which any significant input is not based on observable market data. The fair values of bank balances, cash and other financial assets in statement of financial position which are carried at amortized cost, are not significantly different from the carrying values included in the financial statements due to the short term nature of balances. The table below presents the available-for-sale investments based on the fair value hierarchy: SAR’000March 31, 2020 (Unaudited)Level 1Level 2Level 3TotalAvailable-for- sale investments Insurance OperationsMutual funds-50,558-50,558Fixed income portfolio (Governments and corporations securities )-1,657,372-1,657,372Discretionary Portfolio Management – Equities351,405--351,405351,4051,707,930-2,059,335 Shareholders’ OperationsMutual funds-- 621,717621,717Fixed income portfolio (Governments and corporations securities )-320,257-320,257Discretionary Portfolio Management – Equities194,453--194,453194,453320,257621,7171,136,427Total545,8582,028,187621,7173,195,762SAR’000December 31, 2019 (Audited)Level 1Level 2Level 3TotalAvailable-for-sale investments Insurance OperationsMutual funds-53,165- 53,165Fixed income portfolio (Governments and corporations securities )-1,213,310- 1,213,310Discretionary Portfolio Management – Equities157,084-- 157,084Sukuks--6,3416,341Funds placed with portfolio manager81,624--81,624238,7081,266,4756,3411,511,524 Shareholders’ OperationsMutual funds- - 651,917 651,917 Fixed income portfolio (Governments and corporations securities )- 388,344- 388,344 Discretionary Portfolio Management – Equities122,723 -- 122,723 Funds placed with portfolio manager72,240 -- 72,240 Total194,963 388,344651,917 1,235,224 433,6711,654,819658,258 2,746,748 Reconciliation of recurring fair value measurements categorized within Level 3 of the fair value hierarchy:SAR’000Total gain or loss recognized inMarch 31, 2020 (Unaudited)Balance January 1PurchasesSalesStatement of incomeOther comprehensive incomeBalance March 31Insurance Operations Sukuks6,341- (6,341)- - - 6,341- (6,341)- - - Shareholders’ operations Mutual funds 651,917- - - (30,200)621,717651,917- - - (30,200)621,717Total658,258- (6,341)- (30,200)621,717SAR’000Total gain or loss recognized inDecember 31, 2019 (Audited)Balance January 1PurchasesSalesStatement of incomeOther comprehensive incomeBalance December 31Insurance Operations Sukuks225,140 - (218,799) - - 6,341225,140 - (218,799) - - 6,341Shareholders’ operationsMutual funds 601,62937,500(55,154)(26,846)94,788651,917Sukuks90,000 - (90,000) - - - 691,62937,500(145,154)(26,846)94,788651,917Total916,76937,500(363,953)(26,846)94,788658,258 | 14 |
| Disclosure of earnings per share [text block] | 16.EARNINGS PER SHAREBasic and diluted earnings per share have been calculated by dividing the income attributed to shareholders’ by 125 million shares | 16 |
| Disclosure of related party transactions [text block] | 13.RELATED PARTY TRANSACTIONS AND BALANCESRelated parties represent major shareholders, directors and key management personnel of the Company, and companies of which they are principal owners and any other entities controlled, jointly controlled or significantly influenced by them. Pricing policies and terms of these transactions are approved by the Company’s management and Board of Directors. The following are the details of the major related party transactions during the period and the related balances:Transactions for the period endedBalance receivable / (payable) as atMarchMarchMarch December31, 202031, 201931, 202031, 2019(Unaudited)(Unaudited)(Unaudited)(Audited)SAR’000Major shareholdersInsurance premium written27,35322,50230,2623,862General Organization for Social Insurance - Other services13437- -AssociatesInsurance premium written/ (reversed)358(22)663674Najm fees paid2,6872,668- - Waseel fees paid2,5481,849- - United Insurance Co. fees and claims, net2,9892,7976,7022,663Entities controlled, jointly controlled or significantly influenced by related partiesInsurance premium written 92,71575,776137,581117,747Rent expenses paid14117561 561 Amount of claims paid to hospitals9,72624,868(6,018) (4,197)In accordance with the Company’s Articles of Association, the Board of Directors is entitled each year to remuneration of up to 10% of the remaining profit from Shareholders’ operations, as defined, based on a decision by the General Assembly.The compensation of key management personnel during the period is as follows:March 31, 2020 (Unaudited)March 31, 2019 (Unaudited)SAR’000Salaries and other allowances 2,586 2,525End of service indemnities 302 162 | 13 |
| Disclosure of entity's operating segments [text block] | 15. OPERATING SEGMENTSConsistent with the Company’s internal reporting process; operating segments have been approved by management in respect of the Company’s activities, assets and liabilities. Information disclosed in the note is based on current reporting to the chief operating decision maker. Segment assets do not include property and equipment, prepayments and other assets, receivables, net and cash and cash equivalents. Accordingly, they are included in unallocated assets. Segment liabilities do not include reserve for discontinued operations, surplus distribution payable, due to shareholders operations, reinsurance balances payable, claims payable, accrued expenses and other liabilities and fair value reserve for available-for-sale investments. Accordingly, they are included in unallocated liabilities.These unallocated assets and liabilities (including the related charges for provision for doubtful debts on premiums receivable and depreciation on the property and equipment) are not reported to chief operating decision maker under related segments and are monitored on a centralized basis.For the three months period ended March 31, 2020(Unaudited)Operating SegmentsMedicalMedical -UmrahMotorManafethProperty & casualtyGeneral Accident - UmrahProtection &SavingsTotal - Insurance operationsTotal Shareholders’ operationsTotalSAR’000REVENUESGross premiums written- Retail 14,335 145,053 132,500 33,850 5,562 92,384 - 423,684 423,684 - Micro Enterprises99,877 - 5,584 - 4,681 - - 110,142 110,142 - Small Enterprises62,189 - 2,948 - 4,709 - 107 69,953 69,953 - Medium Enterprises92,309 - 5,232 - 4,722 - 290 102,553 102,553 - Corporates1,696,321 - 6,399 - 161,670 - 1,985 1,866,375 1,866,375 1,965,031 145,053 152,663 33,850 181,344 92,384 2,382 2,572,707 2,572,707 Reinsurance ceded – local- - - - (4,850) - (720) (5,570) (5,570)Reinsurance ceded – international (979) - - - (149,466) - (1,363) (151,808) (151,808)Fees income from takaful- - - - - - 685 685 685 Excess of loss premiums- - (3,181) (709) (2,832) (2,250)- (8,972) (8,972)Net premiums written1,964,052 145,053 149,482 33,141 24,196 90,134 984 2,407,042 2,407,042 Changes in unearned premiums, net (492,938) (442) 3,275 2,293 (1,602) (86)162 (489,338) (489,338)Net premiums earned1,471,114 144,611 152,757 35,434 22,594 90,048 1,146 1,917,704 1,917,704 Reinsurance commissions575 - - - 30,203 - - 30,778 30,778 Other underwriting income874 - 2,138 - 1,223 - - 4,2354,235TOTAL REVENUES1,472,563144,611 154,895 35,434 54,020 90,048 1,146 1,952,7171,952,717UNDERWRITING COSTS AND EXPENSESGross claims paid and related expenses1,424,795 - 95,477 6,558 221,826 59 4,016 1,752,731 1,752,731 Reinsurers’ share of claims paid(17,355) - (1,499) - (214,794) - (3,664) (237,312) (237,312)Net claims paid 1,407,440 - 93,978 6,558 7,032 59 352 1,515,419 1,515,419 Changes in outstanding claims, net 514 445 (13,620) 2,899 2,695 1,933 (158) (5,292) (5,292)Changes in incurred but not reported claims reserve, net(92,232) 28,817 (2,242) (84)(23,451) 16,561 - (72,631)(72,631)Changes in premium deficiency reserves - - - - 14,023 - - 14,023 14,023 Net claims and other benefits incurred 1,315,722 29,262 78,116 9,373 299 18,553 194 1,451,519 1,451,519 Changes in reserve for takaful activities - - - - - - (106) (106) (106)Policy acquisition costs 47,614 10,835 19,188 8,114 10,545 6,922 297 103,515103,515Other underwriting expenses 29,380 61,414 763 2,308 1,663 7,684 130 103,342103,342Insurance share distribution - 37,051 - 11,651 - 51,982 - 100,684100,684TOTAL UNDERWRITING COSTS AND EXPENSES1,392,716 138,562 98,067 31,446 12,507 85,141 515 1,758,9541,758,954NET UNDERWRITING INCOME79,8476,04956,8283,98841,5134,907631193,763193,763General and administrative expenses(153,126) (1,395)(154,521)Allowance for doubtful debts (15,620) - (15,620)Dividend and realized gain on investments, net 32,356 29,927 62,283 Share of profit from investments in associates, net - 3,164 3,164 Impairment of available for sale investments (2,637) (2,175) (4,812)Other income6,973 - 6,973NET INCOME FOR THE PERIOD BEFORE ZAKAT 61,709 29,521 91,230 For the three months period ended March 31, 2019(Unaudited)Operating SegmentsMedicalMotorManafethProperty & casualtyProtection & SavingsTotal - Insurance operationsTotal Shareholders’ operationsTotalSAR’000REVENUESGross premiums written- Retail 8,305148,35342,9045,463- 205,025205,025- Micro Enterprises55,9974,585- 15,353- 75,93575,935- Small Enterprises68,7224,444- 5,7008078,94678,946- Medium Enterprises121,8707,332- 3,460320132,982132,982- Corporates1,723,82613,848- 223,8812,5901,964,1451,964,1451,978,720 178,562 42,904 253,857 2,990 2,457,033 2,457,033 Reinsurance ceded - local- - - (6,990)(365) (7,355) (7,355)Reinsurance ceded - international(4,516) - - (222,470)(2,328) (229,314) (229,314)Fees income from takaful- - - - 798 798 798 Excess of loss premiums - (4,493) (477) (1,446)- (6,416) (6,416)Net premiums written1,974,204 174,069 42,427 22,951 1,095 2,214,746 2,214,746 Changes in unearned premiums, net(553,986) (14,454) (116) 1,454 290 (566,812) (566,812)Net premiums earned1,420,218 159,615 42,311 24,405 1,385 1,647,934 1,647,934 Reinsurance commissions 840 - - 25,979 - 26,819 26,819 Other underwriting income - 3,520 - - - 3,520 3,520 TOTAL REVENUES1,421,058 163,135 42,311 50,384 1,385 1,678,273 1,678,273 UNDERWRITING COSTS AND EXPENSESGross claims paid and related Expenses1,436,972 83,230 6,635 294,867 5,013 1,826,717 1,826,717 Reinsurers’ share of claims paid(23,371) (2,282) - (289,229)(4,572) (319,454) (319,454)Net claims paid 1,413,601 80,948 6,635 5,638 441 1,507,263 1,507,263 Changes in outstanding claims, net(14,190) 15,105 (329) (484)(21) 81 81 Changes in incurred but not reported claims reserve, net (29,525) (30,118) (350) 2,323 - (57,670) (57,670)Changes in premium deficiency Reserves (4,510) - - (947)- (5,457) (5,457)Net claims and other benefits incurred 1,365,376 65,935 5,956 6,530 420 1,444,217 1,444,217 Changes in reserve for takaful Activities- - - - (880) (880) (880)Policy acquisition costs49,141 20,171 8,477 8,826 257 86,872 86,872 Other underwriting expenses29,906 892 3,735 5,126 546 40,205 40,205 Insurance share distribution - - 19,182 - - 19,182 19,182 TOTAL UNDERWRITING COSTS AND EXPENSES1,444,423 86,998 37,350 20,482 343 1,589,596 1,589,596 NET UNDERWRITING (LOSS)/ INCOME(23,365)76,1374,96129,9021,04288,67788,677General and administrative expenses(123,303)(221)(123,524)Reversal of provision for doubtful debts17,800- 17,800Dividend and realized gain on investments, net31,00823,25354,261Share of profit from investments in associates, net4254,5604,985Other income5,877- 5,877NET INCOME FOR THE PERIOD 20,48427,59248,076For the three months period ended March 31, 2020(Unaudited)Operating SegmentsMedicalMedical -UmrahMotorManafethProperty & casualtyGeneral Accident - UmrahProtection &SavingsTotal - Insurance operationsTotal Shareholders’ operationsTotalSAR’000Assets Reinsurer’s share of unearned premiums29,927 - - - 474,434 - 3,538 507,899 507,899 Reinsurer’s share of incurred but not reported Claims24,326 - 11,602 - 264,351 - 4,527 304,806 304,806 Reinsurer’s share of outstanding claims 61 - 19,629 5,041 2,858,005 - 16,621 2,899,357 2,899,357 Deferred excess of loss premiums - - - 1,265 7,733 6,783 - 15,781 15,781 Deferred policy acquisition costs90,885 44 21,106 1,400 13,143 7 232 126,817 126,817 Investments (including investment property, mudaraba deposit, investments in associates and accrued investment income ) 3,474,986 3,162,167 6,637,153 Receivables, net 2,212,246 2,212,246 Cash and cash equivalents 677,424 13,976 691,400 Unallocated assets 559,818 128,017 687,835 Total assets 10,779,134 3,304,160 14,083,294 LiabilitiesGross unearned premiums3,224,625 442 322,703 24,353 531,109 86 4,079 4,107,397 4,107,397 Gross outstanding claims256,942 445 182,053 23,583 2,996,084 1,933 17,470 3,478,510 3,478,510 Incurred but not reported claims reserve1,343,675 28,817 157,781 13,513 264,773 16,561 4,915 1,830,035 1,830,035 Premium deficiency reserve - - - - 16,819 - 34 16,853 16,853 Unearned commission income 719 - - - 36,771 - 942 38,432 38,432 Reserve for takaful activities - - - - - - 4,900 4,900 4,900 Reinsurers’ balances payable 182,294 182,294 Unallocated liabilities and accumulated surplus 1,594,171 288,0561,882,227Total liabilities and surplus 11,252,592 288,05611,540,648As at December 31, 2019(Audited)Operating SegmentsMedicalMotorManafethProperty & casualtyProtection & SavingsTotal - Insurance operationsTotal - Shareholders’ operationsTotalSAR’000Assets Reinsurer’s share of unearned Premiums 51,951 - - 659,903 4,105 715,959 715,959 Reinsurer’s share of incurred but not reported claims 24,365 13,017 - 285,815 4,527 327,724 327,724 Reinsurer’s share of outstanding Claims 22 20,581 5,241 3,057,935 16,667 3,100,446 3,100,446 Deferred excess of loss premiums - 2,650 - 5,064 - 7,714 7,714 Deferred policy acquisition costs 84,932 21,645 1,431 12,447 390 120,845 120,845 Investments (including investment property, mudaraba deposit, investments in associates and accrued investment income ) 3,113,846 3,289,992 6,403,838 Receivables, net1,495,8941,495,894Cash and cash equivalents 1,297,401 9,149 1,306,550 Unallocated assets508,002 127,513 635,515Total assets 10,687,831 3,426,654 14,114,485 LiabilitiesGross unearned premiums 2,753,711 325,978 26,646 714,976 4,808 3,826,119 3,826,119 Gross outstanding claims 256,389 196,625 20,884 3,193,319 17,674 3,684,891 3,684,891 Incurred but not reported claims Reserve 1,435,946 161,438 13,597 309,688 4,915 1,925,584 1,925,584 Premium deficiency reserve - - - 2,796 34 2,830 2,830 Unearned commission income 1,271 - - 41,170 882 43,323 43,323 Reserve for takaful activities - - - - 5,006 5,006 5,006 Reinsurers’ balances payable 523,820 523,820 Unallocated liabilities and accumulated surplus 1,334,585 268,6381,603,223Total liabilities and surplus 11,346,158 268,63811,614,796 | 15 |
| Disclosure of commitments and contingencies, general [text block] | 9.CONTINGENT LIABILITIESAs at March 31, 2020, the Company was contingently liable for letters of credit and guarantees, issued on its behalf by the banks, amounting to SAR 201 million (December 31, 2019: SAR 200 million) occurring in the normal course of business.The Company, in common with significant majority of insurers, is subject to litigation in the normal course of its business. Appropriate provisions have been made in relation to pending cases and management believes that finalization of these court cases is not expected to have a material impact on the financial information. | 9 |
| Disclosure of comparative figures [text block] | 19.RISK MANAGEMENTThe risk management policies used in the preparation of the interim condensed financial information are consistent with those followed in the preparation of the Company’s annual financial statements for the year ended 31 December 2019 except for the following:Credit risk managementThe Company has strengthened its credit risk management policies to address the fast changing and evolving risks posed by the current circumstances. These include review of credit concentrations at granular economic sector, region, counterparty level and take appropriate action where required. Based on the review, the Company has identified the following major sectors, which are Food, Airlines, Freight Companies, Hotels, Retail, Construction, Entertainment, Tourism etc. being impacted significantly by the Covid-19 pandemic and lower oil prices.Capital risk managementThe Company’s management, through various scenario analysis as required by the regulator, has assessed the potential of the Covid-19 pandemic by performing stress testing for various variables like: gross premium growth, increase in employee cost, YTD loss ratio, outstanding premium provisions etc. and the related impact on the revenue, profitability, loss ratio and solvency ratio. The Company’s management has concluded that based on the stress testing performed the solvency margin of the Company can be reduced to 135% to 75%. As with any forecasts, the projections and likelihoods of occurrence are underpinned by significant judgements and uncertainties and, therefore, the actual outcomes may be different to those projected. As the situation is fluid and rapidly evolving, the Company will continue to reassess its position and the related impact on a regular basis.Liquidity risk managementThe Company is aware of the need to keep a close focus on liquidity management during this period and has enhanced its monitoring of current liquidity needs as well as the pandemic in its entirety. The Company regularly reviews and updates the liquidity forecast based on the individual liquidity balance as well as the continued development of external economic factors. | 19 |
| Disclosure of board of director's approval of the financial statements [text block] | 20.APPROVAL OF THE INTERIM CONDENSED FINANCIAL INFORMATIONThe interim condensed financial information have been approved by the Audit Committee on behalf the Board of Directors, on Ramadan 12, 1441H, corresponding to May 5, 2020. | 20 |
| Disclosure of other notes relevant to understanding of financial statements [text block] | 12.INSURANCE SHARED AGREEMENTS(i)Manafeth shared agreement:On January 13, 2015 together with 25 related insurance companies, the Company signed the Manafeth shared agreement relating to third party liability motor insurance which is effective from 1 January 2015. The agreement relates to motor insurance for vehicles entering the Kingdom of Saudi Arabia. The agreement has subsequently been renewed for two years from January 1, 2019 to December 31, 2020 with 25 related insurance companies.The main terms of the above mentioned agreement are as follows:-The Company obtains 15% management fee of the net result of the Manafeth portfolio;-The Company obtains 4.25% of Manafeth’s gross premiums written to cover the related indirect expenses; and-The net result of the Manafeth portfolio after deducting the two above mentioned items is due to be shared equally by the Company and its related insurers. (ii)Umrah shared agreement:On January 01, 2020 together with 28 related insurance companies, the Company signed the Umrah shared agreement relating to medical and general accident insurance which is effective from 1 January 2020. The agreement relates to insurance of pilgrims who entering the Kingdom of Saudi Arabia.The main terms of the above mentioned agreement are as follows:-The Company obtains 2% management fee of the net result of the Umrah portfolio;-The Company obtains 2.5% of Umrah’s gross premiums written to cover the related indirect expenses; -The Company obtains 0.3% of investing portfolio funds; -The company pays 7.5% brokerage commission of Umrah’s gross premiums written to broker;-The company pays 10% of Umrah’s portfolio surplus to Ministry of Hajj and Umrah; and-The net result of the Umrah portfolio after deducting all the above mentioned items is due to be shared equally by the Company and its related insurers.21.SUBSEQUENT EVENTSIn response to the Covid-19 pandemic, SAMA issued a circular 189 (the “Circular”) dated 08 May 2020 to all insurance companies in the Kingdom of Saudi Arabia. Among various other matters relating to the insurance sector, the Circular instructs all the insurance companies to extend the period of validity of all existing retail motor insurance policies by two months as well as providing a two-month additional coverage for all new retail motor policies written within one month of this Circular and allowing insurance companies not to cancel the policy in the event the insured fails to pay the premiums. This shall have an impact on changes in unearned premiums and Gross unearned premiums and the respective reinsurance share. The management believes that such requirements of the Circular are a non-adjusting event and therefore the interim condensed financial information has not been adjusted.. | 12, 21 |
