| 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, property 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 Central Bank (formerly 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.The Company has the following subsidiary and associates. Name of the Subsidiary / Associates Registration No. Registration date Ownership interest Financial year end Principal Activities Subsidiary Teejan Al- Khaleej 1010644057 21 July 2020 100% December 31 Developing technology based solutions and extending consultancy services for the insurance and healthcare businesses. The company has commenced its commercial operations in August 2020. The first financial statements of the company will be prepared for the year ended 31 December 2021.Associates United Insurance Company B.S.C. 17337-1 12 May 1986 50% December 31 Insurance for all motor vehicles which travel through the King Fahad Causeway in accordance with the Bahrain Insurance Company Law. Waseel Application Service Provider Limited 1010186558 15 April 2003 45% December 31 Internet based connectivity, information services, and B2B e-commerce capabilities for the healthcare insurance market.These consolidated financial statements comprise the Company and its subsidiary (together referred to as the ‘Group’). | 1 |
| Disclosure of statement of compliance [text block] | 2. BASIS OF PREPARATIONa) Statement of complianceThe consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS) as endorsed in the Kingdom of Saudi Arabia and other standards and pronouncements issued by the Saudi Organization for Chartered and Professional Accountants (SOCPA) and in compliance with Regulations for Companies in the Kingdom of Saudi Arabia and By-Laws of the Company.The Company’s consolidated 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 and right of use assets, intangible assets, investment properties, investments in equity accounted investments, defined benefits obligation and return payable on statutory deposit. All other financial statement line items would generally be classified as current.The Company presents its consolidated 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 consolidated financial statements accordingly (Note 32). 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 consolidated statement of financial position, consolidated statement of income, consolidated statement of comprehensive income and consolidated statement of cash flows of the insurance operations and shareholders operations which are presented in Note 32 of the consolidated financial statements 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 consolidated statement of financial position, consolidated statement of income, consolidated statement of comprehensive income and consolidated statement of 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 consolidated financial statements 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.b) Basis of measurement These consolidated financial statements are prepared under the historical cost basis except for the measurement at fair value of available-for-sale investments, investment in equity accounted investments which is accounted for under the equity method and defined benefits obligation based on actuarial valuation techniques.c) Functional and presentation currencyThese consolidated financial statements have been presented in Saudi Arabian Riyals (SAR), which is also the functional currency of the Company. All financial information presented in Saudi Arabian Riyal has been rounded to the nearest thousand, except where otherwise indicated.d) Fiscal yearThe Company follows a fiscal year ending December 31.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 (a) |
| Disclosure of new standards and amendments in standards [text block] | New IFRS Standards, IFRIC interpretations and amendments thereof, adopted by the Company:Standard / Amendments Description Effective dateAmendment to IFRS 16, ‘Leases’ – COVID-19 related rent concessions As a result of the coronavirus (COVID-19) pandemic, rent concessions have been granted to lessees. Such concessions might take a variety of forms, including payment holidays and deferral of lease payments. In May 2020, the IASB published an amendment to IFRS 16 that provides an optional practical expedient for lessees from assessing whether a rent concession related to COVID-19 is a lease modification. Lessees can elect to account for such rent concessions in the same way as they would if they were not lease modifications. In many cases, this will result in accounting for the concession as variable lease payments in the period(s) in which the event or condition that triggers the reduced payment occurs. Annual periods beginning on or after 1 June 2020Amendments to IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform – Phase 2 IBOR reform refers to the global reform of interest rate benchmarks, which includes the replacement of some interbank offered rates with alternative benchmark rates. Annual periods beginning on or after 1 January 2021The application of above standards does not have any impact on the consolidated financial statements of the Group for the year ended 31 December 2021. | 3 |
| Disclosure of issued IFRS not yet adopted [text block] | Standards issued but not yet effectiveThe Group has chosen not to early adopt the following new standards which have been issued but not yet effective for the Company's accounting year beginning on 1 January 2021 and is currently assessing their impact:Standard, interpretation, amendments Description Effective dateAmendment to IFRS 16, ‘Leases’, COVID-19 related rent concessions Extension of the practical expedient As a result of the coronavirus (COVID-19) pandemic, rent concessions have been granted to lessees. In May 2020, the IASB published an amendment to IFRS 16 that provided an optional practical expedient for lessees from assessing whether a rent concession related to COVID-19 is a lease modification. Lessees can select to account for such rent concessions in the same way as they would if they were not lease modifications. In many cases, this will result in accounting for the concession as variable lease payments in the period(s) in which the event or condition that triggers the reduced payment occurs. On 31 March 2021, the IASB published an additional amendment to extend the date of the practical expedient from 30 June 2021 to 30 June 2022. Annual periods beginning on or after 1 April 2021A number of narrow-scope amendments to IFRS 3, IAS 16, IAS 37 and some annual improvements on IFRS 1, IFRS 9, IAS 41 and IFRS 16. Amendments to IFRS 3, ‘Business combinations’ update a reference in IFRS 3 to the Conceptual Framework for Financial Reporting without changing the accounting requirements for business combinations.Amendments to IAS 16, ‘Property, plant and equipment’ prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and related cost in statement of income.Amendments to IAS 37, ‘Provisions, contingent liabilities and contingent assets’ specify which costs a company includes when assessing whether a contract will be loss-making.Annual improvements make minor amendments to IFRS 1, ‘First-time Adoption of IFRS’, IFRS 9, ‘Financial instruments’, IAS 41, ‘Agriculture’ and the Illustrative Examples accompanying IFRS 16, ‘Leases’. Annual periods beginning on or after 1 January 2022Standard, interpretation, amendments Description Effective dateAmendments to IAS 1, Presentation of financial statements’, on classification of liabilities These narrow-scope amendments to IAS 1, ‘Presentation of financial statements’, clarify that liabilities are classified as either current or noncurrent, depending on the rights that exist at the end of the reporting period. Classification is unaffected by the expectations of the entity or events after the reporting date (for example, the receipt of a waiver or a breach of covenant). The amendment also clarifies what IAS 1 means when it refers to the ‘settlement’ of a liability. Deferred until accounting periods starting not earlier than 1 January 2024Narrow scope amendments to IAS 1, IFRS Practice Statement 2 and IAS 8 The amendments aim to improve accounting policy disclosures and to help users of the financial statements to distinguish between changes in accounting estimates and changes in accounting policies. Annual periods beginning on or after 1 January 2023Amendment to IAS 12 - deferred tax related to assets and liabilities arising from a single transaction These amendments require companies to recognise deferred tax on transactions that, on initial recognition give rise to equal amounts of taxable and deductible temporary differences. Annual periods beginning on or after 1 January 2023IFRS 17 Insurance Contracts See note belowIFRS 9 Financial Instruments See note belowIFRS 17 – Insurance ContractsOverviewThis standard has been published on May 18, 2017, and amended on June 25, 2020. It establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts and supersedes IFRS 4 – Insurance Contracts.The new standard applies to insurance contracts issued, to all reinsurance contracts and to investment contracts with discretionary participating features provided the entity also issues insurance contracts. It requires issuers to separate the following components from insurance contracts:i) embedded derivatives, if they meet certain specified criteria;ii) distinct investment components; andiii) any promise to transfer distinct goods or non-insurance services.These components should be accounted for separately in accordance with the related standards (IFRS 9 and IFRS 15). MeasurementIn contrast to the requirements in IFRS 4, which permitted insurers to continue to use the accounting policies for measurement purposes that existed prior to January 2005, IFRS 17 provides the following different measurement models: The General Measurement Model (GMM) is based on the following “building blocks”:a) the fulfilment cash flows (FCF), which comprise: probability-weighted estimates of future cash flows, an adjustment to reflect the time value of money (i.e. discounting) and the financial risks associated with those future cash flows, and a risk adjustment for non-financial risk;Contractual Service Margin (CSM). The CSM represents the unearned profit for a group of insurance contracts and will be recognised as the entity provides services in the future. The CSM cannot be negative at inception; any net negative amount of the fulfilment cash flows at inception will be recorded in statement of income immediately. At the end of each subsequent reporting period the carrying amount of a group of insurance contracts is remeasured to be the sum of: the liability for remaining coverage, which comprises the FCF related to future services and the CSM of the group at that date; and the liability for incurred claims, which is measured as the FCF related to past services allocated to the group at that date.The CSM is adjusted subsequently for changes in cash flows related to future services. Since the CSM cannot be negative, changes in future cash flows that are greater than the remaining CSM are recognised in statement of income.The effect of changes in discount rates will be reported in either statement of income or statement of comprehensive income, determined by an accounting policy choice.The Variable Fee Approach (VFA) is a mandatory model for measuring contracts with direct participation features (also referred to as ‘direct participating contracts’). This assessment of whether the contract meets these criteria is made at inception of the contract and not reassessed subsequently. For these contracts, in addition to the adjustment under GMM, the CSM is also adjusted for:i. the entity’s share of the changes in the fair value of underlying items and ii. the effect of changes in the time value of money and in financial risks not relating to the underlying items.In addition, a simplified Premium Allocation Approach (PAA) is permitted for the measurement of the liability for remaining coverage if it provides a measurement that is not materially different from the General Measurement Model or if the coverage period for each contract in the group is one year or less. With the PAA, the liability for remaining coverage corresponds to premiums received at initial recognition less insurance acquisition cash flows. The General Measurement Model remains applicable for the measurement of the liability for incurred claims. However, the entity is not required to adjust future cash flows for the time value of money and the effect of financial risk if those cash flows are expected to be paid/received in one year or less from the date the claims are incurred.Effective dateThe effective date of IFRS 17 is currently 1 January 2023 and will supersede IFRS 4 “Insurance Contracts”. Earlier adoption is 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 consolidated statement of income and the consolidated statement of financial position. The Company has decided not to early adopt this new standard.TransitionRetrospective application is required. However, if full retrospective application for a group of insurance contracts is impractical, then the entity is required to choose either a modified retrospective approach or a fair value approach.Presentation and DisclosuresThe Company expects that the new standard will result in a change to the accounting policies for insurance contracts together with amendments to presentation and disclosures. ImpactThe Company has performed an operational gap assessment which has focused on the impact of IFRS 17 across data, systems, processes and people. The Company is currently assessing the impact of the application and implementation of IFRS 17 and in the process of applying applicable requirements. As of the date of the publication of these consolidated financial statements, the financial impact of adopting the standard has yet to be fully assessed by the Company. The key areas identified to date are as follows: Impact Area Summary of ImpactFinancial Impact Based on the assessment, the majority of Company’s products (which provide cover for annual periods or less) are expected to be measured using the simplified approach (PAA) which requires less changes to the existing approach under IFRS 4. As a result, the financial impact of measuring contracts under IFRS 17 is not expected to be significant. Data Impact Where the GMM is applied to measure the Liability for Remaining Coverage, additional data to inform the assumptions made will be required to generate cash-flow models. Yield curves and other financial market information will also be required to determine suitable discount rates and the credit risk of reinsurers.IT Systems Cash-flow models will be required to cater for the calculation of the Liability for Remaining Coverage. In addition, model development will be required to allow for the calculation, updating and amortisation of the Contractual Service Margin.Amendments will also be required to the current chart of accounts and reporting disclosures. Process Impact A process will need to be established to assess the expected profitability of contracts issued, at the issuing date.Cost allocation processes will need refinement to ensure directly attributable costs are identified according to the requirements of IFRS 17 and are then used as part of cash flow projections.The financial statement closing process will also require changes to allow for more frequent interaction between the finance and actuarial teams. Impact on RI Arrangements IFRS 17 is not expected to significantly impact the structure of the reinsurance arrangements currently in place for the Company. It is however expected that further insight into the expected (and subsequently actual) performance of reinsurance treaties will be derived under IFRS 17. Impact on Policies & Control Frameworks Various decisions need to be made and policies drafted which cover the below (amongst other items): Allocating directly attributable expenses Onerous contract identification and measurement Risk adjustmentThe Company is currently assessing the full impact of the application and implementation of IFRS 17. As of the date of the publication of these consolidated financial statements, the Company has already submitted Phase 3 Implementation plan to SAMA, and first dry run results based on certain operational simplicity to SAMA. The Company is planning to perform another dry run using December 2021 data which will be submitted to SAMA during the year ending December 31, 2022.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 amortised cost, at Fair Value through Other Comprehensive Income (FVOCI), or at Fair Value through Profit or Loss (FVPL). A financial asset is measured at amortised cost if both: the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and the 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 FVOCI and realized gains or losses are recycled through profit or loss upon sale, if both of the following 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; and the contractual terms of cash flows are SPPI,Assets not meeting either of these categories are measured at FVPL. Additionally, at initial recognition, an entity can use the option to designate a financial asset at FVPL 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 recognised in profit or loss. | 3 (a) |
| Disclosure of critical accounting judgements, estimates and assumptions, general [text block] | Critical accounting judgments, estimates and assumptionsThe preparation of the consolidated 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 consolidated 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 these consolidated financial statements, 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 consolidated financial statements for the year ended December 31, 2020. However, the Company has reviewed the key sources of estimation uncertainties disclosed in the last annual financial statements against the backdrop of the COVID-19 pandemic. Management will continue to assess the situation and reflect any required changes in future reporting periods.Following are the accounting judgments and estimates that are critical in preparation of these consolidated financial statements: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 given the level of subjectivity inherent in estimating the impact of claim events that have occurred and incurred but not reported for which the ultimate outcome remains uncertain. 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. The Company has appointed a qualified actuary who supports in reviewing and providing recommendation with regards to the expected ultimate claims and the associated claims reserves. The Company booked reserves following the recommendation of the appointed actuary who is currently external and independent from the Company. A range of methods were used by the appointed actuary to determine these claims. 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. The 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.Estimation of premium deficiency is highly sensitive to a number of assumptions as to the future events and conditions. It is based on an expected combined loss ratio for the unexpired portion of the risks for written policies. To arrive at the estimate of the expected loss ratio, the company’s external appointed actuary, consider the claims and premiums relationship which is expected to apply on unearned portion of the written risks, and ascertain, at the end of the financial period, whether a premium deficiency reserve is required.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 the Company’s 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. The Company reviews its debt securities classified as available for sale at each reporting date to assess whether they are impaired.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. Refer fair value of financial instruments disclosure in note 30. v) Impact of Covid-19 and Council of Cooperative Health Insurance (“CCHI”) Article 11 on technical reserves On 11 March 2020, the World Health Organization (“WHO”) declared the Coronavirus (“Covid-19”) outbreak as a pandemic in recognition of its rapid spread across the globe. This outbreak had also affected the GCC region including the Kingdom of Saudi Arabia. Governments all globally took steps to contain the spread of the virus. Saudi Arabia in particular had implemented closure of borders, released social distancing guidelines and enforced country wide lockdowns and curfews. The Coronavirus (“COVID-19”) pandemic continues to disrupt global markets as many geographies experienced multiple waves of infections despite having previously controlled the outbreak through aggressive precautionary measures such as imposing restrictions on travel, lockdowns and strict social distancing rules. The Government of Kingdom of Saudi Arabia (“the Government”) however has managed to successfully control the outbreak to date. Moreover, beginning October 17, 2021, social distancing requirements have been relaxed. The major impact of Covid-19 pandemic is seen in medical and motor line of business as explained below. As with any estimate, the projections and likelihoods of occurrence are underpinned by significant judgment and rapidly evolving situation and uncertainties surrounding the duration and severity of the pandemic, and therefore, the actual outcomes may be different to those projected. The impact of such uncertain economic environment is judgmental, and the Company will continue to reassess its position and the related impact on a regular basis.Medical technical reservesBased on the management’s assessment, management believes that the Government’s decision to assume the medical treatment costs for both Saudi citizens and expatriates has helped in reducing any unfavourable impact. During the lockdown, the Company experienced a decline in medical reported claims (mainly elective and non-chronic treatment claims) which resulted in a drop in claims experience. However, subsequent to the lifting of lockdown since June 21, 2020, the Company experienced an increase in claims which was in line with the expectations of the Company’s management regarding delayed treatment.CCHI issued a Circular 895, dated December 17, 2020 regarding the procedures, protocols, and prices relating to the enforcement of Article 11. Following these procedures, Government facilities are now able to bill insurance companies for the claims incurred for some elements of their insured population. As instructed by the CCHI, the new protocols and procedures cover all new and renewing policies incepting from January 1, 2021. Moreover, this also covers all emergency cases for all in-force policies as of January 1, 2021.Motor technical reservesIn response to the Covid-19 pandemic, SAMA issued a circular 189 (the “circular”) dated May 8, 2020 to all insurance companies in the Kingdom of Saudi Arabia. Amongst other things, the circular instructed insurance companies to extend the period of validity of all existing retail motor insurance policies by a further two months, as well as, providing a two-month additional coverage for all new retail motor policies written within one month of that circular.Management, in conjunction with its appointed actuary, deliberated on a variety of internal factors and concluded, that the Company considers the extension of two months in existing motor policies as new policies and record a premium deficiency reserve, if any, based on the expected claims for the extended two-months period. The Company’s actuary has performed a liability adequacy test using current estimates of future cash flows under its insurance contracts at a segmented level for motor line of business and no additional liability was recorded as premium deficiency reserve as of December 31, 2021.For new policies written as per the above circular, the premium is earned over the period of coverage i.e. 14 months as per the Company’s accounting policy. The extended policies have expired during the third quarter of 2021 and therefore there is no subsequent impact of the two-month extension on the performance of the Motor line of business going forward.Other financial assetsTo cater for any potential impact the Covid-19 pandemic may have had on the financial assets, the Company has performed an assessment in accordance with its accounting policy, to determine whether there is an objective evidence that a financial asset or a group of financial assets have been impaired. For debt financial assets, these include assessment 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 reorganization, etc. In case of equities classified as available-for-sale, the Company has performed an assessment to determine whether there is a significant or prolonged decline in the fair value of financial assets below their cost basis. 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 year ended December 31, 2021. The Company’s management continues to monitor the situation closely. | 2 (f) |
| Disclosure of basis of measurement [text block] | b) Basis of measurement These consolidated financial statements are prepared under the historical cost basis except for the measurement at fair value of available-for-sale investments, investment in equity accounted investments which is accounted for under the equity method and defined benefits obligation based on actuarial valuation techniques. | 2 (b) |
| Disclosure of functional and presentation currency [text block] | c) Functional and presentation currencyThese consolidated financial statements have been presented in Saudi Arabian Riyals (SAR), which is also the functional currency of the Company. All financial information presented in Saudi Arabian Riyal has been rounded to the nearest thousand, except where otherwise indicated. | 2 (c ) |
| Disclosure of other general disclosures about reporting entity [text block] | d) Fiscal yearThe Company follows a fiscal year ending December 31.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 (d-e) |
| Disclosure of summary of significant accounting policies [abstract] | | |
| Description of accounting policy for cash and cash equivalents [text block] | dd) Cash and cash equivalentsCash and cash equivalents comprise cash in hand and balances with banks including murabaha deposits with less than three months maturity from the date of acquisition. | 3 (dd) |
| Description of accounting policy for investment properties [text block] | s) Investment propertyInvestment property include property (land or a building or part of a building or both) that is held by the Company to earn rentals or for capital appreciation purposes or both. Investment property is measured at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated based on the depreciable amount, which is the cost of an asset or other amount substitute for cost, less its residual value. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Freehold land is not depreciated. The cost is depreciated on a straight line basis over the estimated useful lives of the assets. When parts of an item of investment property have different useful lives, they are accounted for as separate items (major components) of investment property.The cost of replacing a part of an item of investment property is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company, and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of investment property are recognised in consolidated statement of profit or loss and other comprehensive income as incurred.Any gain or loss on disposal of investment property (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in consolidated statement of profit or loss and other comprehensive income. The estimated useful lives of the investment property for the calculation of depreciation are as follows: YearsBuildings 38-40The depreciation methods, useful lives and residual values are reviewed at each reporting date and are adjusted prospectively, if required. Transfers are made from investment properties to other operating assets categories only when there is a change in use evidenced by commencement of related activity such as development with a view to sell. Such transfers are made at the carrying value of the properties at the date of transfer. | 3 (s) |
| Description of accounting policy for investment in associates and joint ventures [text block] | k) Investments in equity accounted investmentsAn associate is an entity in which the Company has significant influence (but not control), over financial and operating policies and which is neither a subsidiary nor a joint venture. Investments in equity accounted investments are carried in the consolidated statement of financial position at cost, plus post acquisition changes in the Company’s share of net assets of the associate, less any impairment in the value of individual investments.The consolidated statement of income reflects the Company’s share of the results of operations of the associate, while the Company share of other comprehensive income / loss is included in the consolidated statement of other comprehensive income. Dividend from such investments is recognised when received and is credited to the investment account. Where there has been a change recognised directly in the equity of the associate, the Company recognises its share of any such changes and presents, when applicable, in the consolidated statement of changes in equityWhen the company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognise further losses, unless it has incurred legal or constructive obligation or made payments on behalf of the associate.At each reporting date, the Company determines whether there is objective evidence that the investment in associate is impaired. If there is such evidence, the Company calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value, and then recognises the loss in the consolidated statement of income, as the case may be. | 3 (k) |
| Description of accounting policy for receivables [text block] | j) ReceivablesPremiums and reinsurance balances receivable are recognised when due and measured on initial recognition at the fair value of the consideration received or receivable. Premiums receivable are stated at gross written premiums receivable from insurance contracts, less an allowance for any uncollectible amounts. The carrying value of receivable is reviewed for impairment and whenever events or circumstances indicate that the carrying amount may not be recoverable, the impairment loss is recorded in “Other general and administrative expenses” in the consolidated statement of income. Receivable balances are derecognised when the Company no longer controls the contractual rights that comprise the receivable balance, which is normally the case when the receivable balance is sold, or all the cash flows attributable to the balance are passed through to an independent third party. Receivables disclosed in note 13 fall under the scope of IFRS 4 “Insurance contracts”. | 3 (j) |
| Description of accounting policy for deferred policy acquisition costs [text block] | h) Deferred policy acquisition costsCommissions and other costs directly related to the acquisition and renewal of insurance contracts are deferred and amortised over the terms of the insurance contracts to which they relate, similar to premiums earned. All other acquisition costs are recognised as an expense when incurred. Amortisation is recorded in the “Policy acquisition costs” in the statement of income.Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period and are treated as a change in accounting estimate.An impairment review is performed at each reporting date or more frequently when an indication of impairment arises. If the assumptions relating to future profitability of these policies are not realized, the amortisation of these costs could be accelerated and this may also require additional impairment write-offs in the statement of income. Deferred policy acquisition costs are also considered in the liability adequacy test at each reporting date. | 3 (h) |
| Description of accounting policy for income and other taxes including deferred taxes [text block] | z) Withholding taxThe Company withholds taxes on certain transactions with non-resident parties as required under Saudi Arabian Income Tax Lawaa) Value Added Tax (VAT)Output VAT related to revenue is payable to tax authorities on the earlier of: (a) collection of receivables from customers or (b) delivery of services to customers.Input VAT is generally recoverable against output VAT upon receipt of the VAT invoice. The tax authorities permit the settlement of VAT on a net basis. VAT related to sales/services and purchases is recognised in the consolidated statement of financial position on a gross basis and disclosed separately as an asset and a liability. VAT that is not recoverable is charged to consolidated statement of income as expense | 3 (z, aa) |
| Description of accounting policy for intangible assets and goodwill [text block] | r) Intangible assets Separately acquired intangible assets are shown at historical cost. They have a finite useful life and are subsequent carried at cost less accumulated amortisation and impairment losses. The Company amortises intangible assets with a limited useful life using straight-line method over the following period:YearsSoftware licenses 4 | 3 (r) |
| Description of accounting policy for property and equipment [text block] | q) Property and equipmentProperty and equipment are stated at cost less accumulated depreciation and any impairment losses. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the consolidated statement of income during the financial period in which they are incurred. Land is not depreciated. The cost of other items of property and equipment is depreciated on the straight line method to allocate the cost over estimated useful lives, as follows: YearsBuildings 40-48Furniture and fixtures 10Computer equipment 4Vehicles 4The assets’ residual values and useful lives are reviewed at each reporting date and adjusted if appropriate. The carrying values of these assets are reviewed for impairment when event or changes in circumstances indicate that the carrying value may not be recoverable. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets are written down to their recoverable amount. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are included in “Other income, net” in the consolidated statement of income. | 3 (q) |
| Description of accounting policy for liability adequacy test [text block] | i) Liability adequacy testAt each statement of financial position date, liability adequacy tests are performed to ensure the adequacy of the insurance contracts liabilities net of related deferred policy acquisition costs. In performing these tests management uses current best estimates of future contractual cash flows and claims handling and administration expenses. Any deficiency in the carrying amounts is immediately charged to the consolidated statement of income by establishing a premium deficiency reserve arising from liability adequacy tests accordingly. | 3 (i) |
| Description of accounting policy for settlement and trade date accounting [text block] | o) Trade date accountingAll regular way purchases and sales of financial assets are recognised / derecognised on the trade date (i.e. the date that the Company commits to purchase or sell the assets). Regular way purchases or sales are purchases or sales of financial assets that require settlement of assets within the time frame generally established by regulation or convention in the market place. | 3 (o) |
| Description of accounting policy for provisions [text block] | x) Provisions, accrued expenses and other liabilitiesProvisions are recognised when the Company has an obligation (legal or constructive) arising from past events, and the costs to settle the obligation are both probable and may be measured reliably. Liabilities are recognised for amounts to be paid in the future for goods or services received, whether billed by the supplier or not. | 3 (x) |
| Description of accounting policy for statutory reserve [text block] | jj) Statutory reserveIn accordance with the Company’s Articles of Association, the Company shall allocate 20% of its net income from shareholders operations each year to the statutory reserve until it has built up a reserve equal to the share capital. The reserve is not available for distribution. | 3 (jj) |
| Description of accounting policy for employees end of service benefits [text block] | w) Employees’ benefits Defined benefits obligationThe Company operates an end of service benefits plan for its employees based on the prevailing Saudi Labor Laws. Accruals are made at the present value of expected future payments in respect of services provided by the employees up to the end of the reporting period using the projected unit credit method. Consideration is given to expect future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the end of the reporting period (as more fully defined in note 18). The benefits payments obligation is discharged as and when it falls due. Re-measurements (actuarial gains / losses) as a result of experience adjustments and changes in actuarial assumptions are recognised in consolidated statement of comprehensive income.Short term employee benefitsShort term employee benefits obligation are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short term cash bonus or any other benefits if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. | 3 (w) |
| Description of accounting policy for zakat [text block] | y) ZakatThe Company is subject to zakat in accordance with the regulations of the Zakat, Tax and Customs Authority (“ZATCA”). Zakat is computed on the Saudi shareholders’ share of equity or net income using the basis defined under the Zakat regulations. Zakat is accrued on a quarterly basis and charge to the consolidated statement of income. | 3 (y) |
| Description of accounting policy for impairment and uncollectibiity of financial assets [text block] | p) Impairment of financial assetsThe Company assesses, at each reporting date, whether there is objective evidence that a financial asset or a group of financial assets is impaired. An impairment exists if one or more events that has occurred since the initial recognition of the asset (an incurred ‘loss event’), has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include:- Significant financial difficulty of the issuer or debtor;- A breach of contract, such as a default or delinquency in payments;- It is becoming probable that the issuer or debtor will enter bankruptcy or other financial reorganization;- The disappearance of an active market for that financial asset because of financial difficulties; or- Observable data indicating that there is a measurable decrease in the estimated future cash flow from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the Company, including: adverse changes in the payment status of issuers or debtors in the Company; or national or local economic conditions at the country of the issuers that correlate with defaults on the assets.If there is objective evidence that an impairment loss on a financial asset exists, the impairment is determined as follows:- For equities and fund carried at fair value, impairment is the significant or prolong decline in the fair value of the financial asset.- For debt securities and sukuks carried at amortised cost, impairment is based on estimated future cash flows that are discounted at the original effective commission rate.For available-for-sale financial assets, the Company assesses at each reporting date whether there is objective evidence that an investment or a group of investments is impaired.In the case of debt instruments classified as available for sale, the Company assesses individually whether there is an objective evidence of impairment. Objective evidence may include indications that the borrower is experiencing significant financial difficulty, default or delinquency in special commission income or principal payments, the probability that it will enter bankruptcy or other financial reorganization and where observable data indicates that there is a measurable decrease in the estimated future cash flows, such as changes in economic conditions that correlate with defaults. However, the amount recorded for impairment is the cumulative loss measured as the difference between the amortised cost and the current fair value, less any impairment loss on that investment previously recognised in the consolidated statement of income. If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to credit event occurring after the impairment loss was recognised in the consolidated statement of income, the impairment loss is reversed through the consolidated statement of income.3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)In making an assessment of whether an investment in debt instrument is impaired, the Company considers the factors such as market’s assessment of creditworthiness as reflected in the bond yields, rating agencies’ assessment of creditworthiness, country’s ability to access the capital markets for new debt issuance and probability of debt being restructured, resulting in holders suffering losses through voluntary or mandatory debt forgiveness. The amount recorded for impairment is the cumulative loss measured as the difference between the Amortised cost and the current fair value, less any impairment loss on that investment previously recognised in the consolidated statement of income.For equity investments held as available-for-sale, a significant or prolonged decline in fair value below its cost represents objective evidence of impairment. The impairment loss cannot be reversed through consolidated statement of income as long as the asset continues to be recognised i.e. any increase in fair value after impairment has been recorded can only be recognised in other comprehensive income. On derecognition, any cumulative gain or loss previously recognised in other comprehensive income is included in the consolidated statement of income for the year. The determination of what is ‘significant’ or ‘prolonged’ requires judgement. 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 judgement, the Company evaluates, among other factors, the duration or extent to which the fair value of an investment is less than its cost. | 3 (p) |
| Description of accounting policy for cash dividend and non-cash distribution to equity holders [text block] | cc) Dividend distributionDividend distribution to the Company’s shareholders is recognised as a liability in the Company’s consolidated financial statements in the period in which the dividends are approved by the Company’s shareholders. | 3 (cc) |
| Description of accounting policy for reinsurance premium/ retakaful contributions [text block] | g) ReinsuranceReinsurance is distributed between treaty, facultative, stop loss and excess of loss reinsurance contracts. An asset or liability is recorded in the statement of financial position representing payments due from reinsurers, the share of losses recoverable from reinsurers and premiums due to reinsurers. Amounts receivable from reinsurance is estimated in a manner consistent with the claim liability associated with the insured parties. Reinsurance assets or liabilities are derecognised when the contractual rights are extinguished or expire or when the contract is transferred to another party.An impairment review is performed at each reporting date or more frequently when an indication of impairment arises during the reporting year. Impairment occurs when objective evidence exists that the Company may not recover outstanding amounts under the terms of the contract and when the impact on the amounts that the Company will receive from the reinsurer can be measured reliably. The impairment loss is recorded in the statement of income as incurred.Ceded reinsurance arrangements do not relieve the Company from its obligation to policyholders. Premiums and claims on assumed reinsurance are recognised as income and expenses in the same manner as they would be if the reinsurance were considered direct business, taking into account the product classification of the reinsured business. | 3 (g) |
| Description of accounting policy for claims/ benefits [text block] | e) ClaimsClaims consist of amounts payable to policyholders and third parties and related loss adjustment expenses, net of salvage and other recoveries, and is charged to “Changes in outstanding claims and reserves” in the statement of income as incurred.Gross outstanding claims comprise the gross estimated cost of claims incurred but not settled at the statement of financial position date together with related claims handling costs, whether reported by the insured or not. Provisions for reported claims not paid as of the statement of financial position date are made on the basis of individual case estimates. In addition, a provision based on management’s judgment and the Company’s prior experience is maintained for the cost of settling claims incurred but not reported including related claims handling costs at the statement of financial position date. The outstanding claims are shown on a gross basis and the related share of the reinsurers is shown separately. Further, the Company does not discount its liability for unpaid claims as substantially all claims are expected to be paid within one year of the statement of financial position date. | 3 (e) |
| Description of accounting policy for general insurance/ takaful contracts [text block] | d) Insurance contractsThe Company issues insurance contracts that transfer insurance risk. Insurance contracts are those contracts where the insurer accepts significant insurance risk from the policyholder by agreeing to compensate the policyholder if a specified uncertain future event adversely affects the policyholder. As a general guideline, the Company defines significant insurance risk as the possibility of having to pay benefits on the occurrence of an insured event that are at least 10% more than the benefits payable if the insured event did not occur. | 3 (d) |
| Description of accounting policy for impairment of non-financial assets [text block] | v) Impairment of non-financial assetsAssets that have an indefinite useful life – for example, land – are not subject to depreciation and are tested annually for impairment. Assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purpose of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows (cash-generating units). | 3 (v) |
| Description of accounting policy for other revenue recognition [text block] | c) Revenue RecognitionRecognition of premium and commission revenuePremiums and commission are recorded in the statement of income based on straight line method over the insurance policy coverage period except for long term polices (construction and engineering) and marine cargo. Unearned premiums are calculated on a straight line method over the insurance policy coverage except for: Last three month’s premium at a reporting date is considered as unearned in respect of marine cargo; Pre-defined calculation for Engineering class of business for risks undertaken that extend beyond a single year. In accordance with this calculation, lower premiums are earned in the first year which gradually increases towards the end of the tenure of the policy; andUnearned premiums represent the portion of premiums written relating to the unexpired period of coverage. The change in the provision for unearned premium is taken to the statement of income in the same order that revenue is recognised over the period of risk.Reinsurance commissions directly relates to the reinsurance contracts are deferred and earned to the statement of income in the same order that commission revenue is recognised over the period of risk.Fee income from takafulFee income from takaful is calculated in accordance with the terms of agreement and is accounted for on an accrual basis.Investment incomeInvestment income on debt instruments are accounted for on an effective interest basis. Dividend incomeDividend income on equity instruments classified under available-for-sale investments is recognised when the right to receive payment is established.Rental incomeRental income from investment property is recognised as revenue on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease. | 3 (c) |
| Description of accounting policy for expenses [text block] | bb) ExpensesCommissions and other costs directly related to the acquisition and renewal of insurance contracts are recorded in policy acquisition cost. All other operating expenses are classified as general and administrative expenses | 3 (bb) |
| Description of accounting policy for segment reporting [text block] | gg) Operating segmentsA 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; the profit of this segment is shared with other insurance companies. Motor insurance. Manafeth - third party liability insurance for foreign vehicles; 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; the profit of this segment is shared with other insurance companies. Protection & Savings. Shareholders’ segment - reporting shareholder operations of the Company includes balances of its subsidiary “Teejan Al- Khaleej”. The revenues shareholders’ earned from investment income along with operations of its subsidiary "Teejan Al- Khaleej". Certain direct operating expenses and other overhead expenses are allocated to this segment on an appropriation basis. The surplus or loss from the insurance operations is allocated to this segment on an appropriation 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 year. | 3 (gg) |
| Description of accounting policy for accounting of leases [text block] | u) LeasesRight of Use Asset / Lease LiabilitiesOn initial recognition, at inception of the contract, the Company shall assess whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control is identified if most of the benefits are flowing to the Company and the Company can direct the usage of such assets.At inception or on reassessment of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. However, for the leases of land and buildings in which it is a lessee, the Company has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.Right of Use AssetsCompany applies cost model, and measure right of use (RoU) asset at cost; less any accumulated depreciation and any accumulated impairment losses; and adjusted for any re-measurement of the lease liability for lease modificationsGenerally, RoU asset would be equal to the lease liability. However, if there are additional costs such as Site preparation, non-refundable deposits, application money, other expenses related to transaction etc. need to be added to the RoU asset value.The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipmentLease Liability On initial recognition, the lease liability is the present value of all remaining payments to the lessor, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate. After the commencement date, Company measures the lease liability by: Increasing the carrying amount to reflect interest on the lease liability. Reducing the carrying amount to reflect the lease payments made and;Re-measuring the carrying amount to reflect any re-assessment or lease modification. The lease liability is measured at Amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company's estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option.When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in consolidated statement of income if the carrying amount of the right-of-use asset has been reduced to zero.Short-term leases and leases of low-value assetsThe Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets, including IT equipment. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. | 3 (u) |
| Description of accounting policy for foreign currencies [text block] | ff) Foreign currenciesTransactions in foreign currencies are recorded in Saudi Riyals at the exchange rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated to Saudi Riyals at the rate of exchange prevailing at the statement of financial position date. All differences are taken to the consolidated statements of income. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction and are not subsequently restated. Foreign exchange gains or losses on available-for-sale investments are recognised in “Other income, net” in the consolidated statement of income. As the Company’s foreign currency transactions are primarily in US dollars, foreign exchange gains and losses are not significant. | 3 (ff) |
| Description of accounting policy for derivative financial instruments and hedges [text block] | m) De-recognition of financial instrumentsThe derecognition of a financial instrument takes place when the Company no longer controls the contractual rights that comprise the financial instrument, which is normally the case when the instrument is sold, or all the cash flows attributable to the instrument are passed through to an independent third party and the Company has also transferred substantially all risks and rewards of ownership. | 3 (m) |
| Description of accounting policy for off setting financial assets and liabilities [text block] | n) OffsettingFinancial assets and financial liabilities are offset and the net amount reported in the consolidated statement of financial position only when there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liability simultaneously. Income and expense is not offset unless required or permitted by any accounting standard or interpretation. | 3 (n) |
| Description of accounting policy for time (murabaha) deposit [text block] | t) Mudaraba / murabaha depositsMudaraba / murabaha deposits, with original maturity of more than three months, having fixed or determinable payments and fixed maturity that the Company has the positive intention and ability to hold to maturity are classified as held to maturity. Held to maturity investments are initially recognised at fair value including direct and incremental transaction costs and subsequently measured at Amortised cost, less provision for impairment in value. Amortised cost is calculated by taking into account any discount or premium on acquisition using an effective yield basis. Any gain or loss on such investments is recognised in the consolidated statement of income when the investment is derecognised or impaired. | 3 (t) |
| Description of other accounting policies relevant to understanding of financial statements [text block] | f) Salvage and subrogation reimbursementSome insurance contracts permit the Company to sell (usually damaged) assets acquired in settling a claim (for example, salvage). The Company may also have the right to pursue third parties for payment of some or all costs (for example, subrogation). Estimates of salvage recoveries are included as an allowance in the measurement of the outstanding claims liability. The allowance is the amount that can reasonably be recovered from the disposal of the asset.Subrogation reimbursements are also considered as an allowance in the measurement of the outstanding claims liability. The allowance is the assessment of the amount that can be recovered from the third party.h) Available-for-sale investmentsAvailable-for-sale financial assets are those non-derivative financial assets that are neither classified as held for trading or held to maturity or loans and receivables, nor are designated at fair value through profit or loss. Such investments are initially recorded at cost, being the fair value of the consideration given including transaction costs directly attributable to the acquisition of the investment and subsequently measured at fair value. Cumulative changes in fair value of such investments are recognised in other comprehensive income in the consolidated statement of comprehensive income. Realized gains or losses on sale of these investments are reported in the related statements of income.Dividend, commission income and foreign currency gain/loss on available-for-sale investments are recognised in the related statements of income as part of the net investment income / loss.Any significant or prolonged decline in fair value of available-for-sale investments is adjusted for and reported in the statement of income, as impairment charges.Fair values of available-for-sale investments are based on quoted prices for marketable securities or estimated fair values based on the latest available net assets value of the mutual fund. 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 Company also considers appropriate assumptions for credit spread.For unquoted investments, fair value is determined by reference to the market value of a similar investment or where the fair values cannot be derived from active markets, they are determined using a variety of valuation techniques. The input to these models is taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values.rr) Cash flow statementThe Company’s main cash flows are from insurance operations which are classified as cash flow from operating activities. Cash flows generated from investing and financing activities are classified accordingly.hh) Insurance shared agreementAs described in note 24, the shared agreements is an insurance pooling arrangement related to motor, medical and general accidents in KSA. This is an arrangement between different number of insurance companies in KSA where the entity is the leader in providing insurance coverages for motor vehicles entering in KSA (Manafeth) also medical and general accidents for the pilgrims entering KSA (Umrah). The entity does not act as an agent on behalf of the other insurers in agreement. Therefore the Company accounts for Manafeth and Umrah shared agreements by recording the premiums under the gross written premium and claims under gross claims paid. The relevant assets and liabilities are also recorded as a separate operating segment along with the assets and liabilities of other operating segments. The distribution of share of income to other participating insurance companies is recorded as an expense in “Insurance share distribution” in the consolidated statement of incomeii) Contingencies and commitmentsContingent liability is: (a) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or(b) a present obligation that arises from past events but is not recognised because:(i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or(ii) the amount of the obligation cannot be measured with sufficient reliability.Contingent assets are not recognised in the consolidated financial statements and are disclosed, unless the probability of an outflow of resources embodying economic benefits is remote.Commitments represent binding agreements of the Company to carry out specified courses of action involving in a transfer of cash or other asset to the respective counterparties. | 3 (f, k, ee, hh, ii) |
| Disclosure of notes forming part of accounts [abstract] | | |
| Disclosure of property and equipment [text block] | 4. PROPERTY, EQUIPMENT AND RIGHT-OF-USE ASSETS, NET Land Buildings Furniture and fixtures Computerequipment Vehicles Right of use asset Total2021 SAR’000Cost: January 1 41,417 148,899 77,120 156,816 456 - 424,708Additions - - 9,126 5,654 - 56,350 71,130 December 31 41,417 148,899 86,246 162,470 456 56,350 495,838 Accumulated Depreciation: January 1 - 24,160 69,213 139,028 456 - 232,857Charge for the year - 3,563 6,940 8,139 - 7,369 26,011December 31 - 27,723 76,153 147,165 456 7,369 258,868 Net book value December 31, 2021 41,417 121,176 10,093 15,303 - 48,981 236,970 Land Buildings Furniture and fixtures Computerequipment Vehicles Right of use asset Total2020 Cost: January 1 41,417 148,899 72,848 147,634 456 - 411,254 Additions - - 4,272 9,182 - - 13,454 Disposals - - - - - - - December 31 41,417 148,899 77,120 156,816 456 - 424,708Accumulated Depreciation: January 1 - 20,598 60,495 123,210 398 - 204,701 Charge for the year - 3,562 8,718 15,818 58 - 28,156 Disposals - - - - - - - December 31 - 24,160 69,213 139,028 456 - 232,857Net book value December 31, 2020 41,417 124,739 7,907 17,788 - - 191,8514.1 Right of use assets pertain to lease of premises of the Company’s branches.4.2 Depreciation is charged to general and administrative expenses in the consolidated statement of income.5. INTANGIBLE ASSETS 2021 2020 SAR’000Cost: January 1 27,211 22,417 Additions 13,938 4,794 December 31 41,149 27,211Accumulated Amortisation: January 1 19,503 18,446 Charge for the year 5,019 1,057 December 31 24,522 19,503Net book value 16,627 7,708Amortisation is charged to general and administrative expenses in the consolidated statement of income. | 4 |
| Disclosure of reinsurers/ retakaful share of outstanding claims, net [text block] | 12. REINSURERS’ SHARE OF OUTSTANDING CLAIMS, NETReinsurers’ share of outstanding claims comprise net amounts due from the following: 2021 2020 SAR’000Reinsurers’ share of insurance liabilities 2,093,025 2,253,812 Impairment provision (1,458) (1,458) 2,091,567 2,252,354 Substantially all of the amounts due from reinsurers are expected to be received within twelve months of the date of the consolidated statement of financial position. Reinsurers share of outstanding claims are calculated in proportion to the related risk distribution pattern. Reinsurance arrangements are made with counterparties with sound credit ratings under Standard and Poor's ratings methodology and ratings as per other reputable agencies.Amounts due from reinsurers relating to claims already paid by the Company are included in receivables, net (Note 13). | 12 |
| Disclosure of investment property [text block] | 6. INVESTMENT PROPERTIES Land Building Total 2021 Total 2020 SAR'000Cost: January 1 21,480 51,027 72,507 72,507 December 31 21,480 51,027 72,507 72,507 Accumulated depreciation: January 1 - 10,369 10,369 9,080Charge for the year - 1,288 1,288 1,289 December 31 - 11,657 11,657 10,369 Net book value 21,480 39,370 60,850 62,138 a) Measurement of fair values:For the purpose of the disclosure requirements in accordance with IAS 40 “Investment properties”, the Company has appointed Ejadah Saudia for Valuation, professionally qualified independent valuers accredited by the Saudi Authority for Accredited Valuers (Taqeem), with License No. (1210000003) for the purpose of estimating the land and buildings fair value as at December 31, 2021, which amounted to SAR 89.8 million (2020: SAR 82.3 million).To determine the fair value of the investment property, the fair value has been determined using the market value of the property. Market value of the property has been determined in accordance with the Practice Statements and relevant Guidance notes of the Royal Institution of Chartered Surveyors (RICS) and approved by the International Valuation Standards Committee (IVSC) as follows: Market value is the estimated amount for which as asset or liability could exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion. Market value of the property has been assessed using a combination of Discounted Cash flow (‘DCF’) approach and Cost approach. The fair value measurement for all of the investment properties has been categorized under Level 3 of the fair value hierarchy. | 6 |
| Disclosure of investments in associates and joint ventures [text block] | 7. INVESTMENTS IN EQUITY ACCOUNTED INVESTMENTS 2021 2020 SAR’000Insurance Operations Balance, January 1 - 10,358 Share of loss - (108)Reclassification to available-for-sale investments (note 8) - (10,250) - - Shareholders Operations Balance, January 1 85,319 91,162Share of profit 18,602 15,152Dividends received (13,690) (20,241)Share of other comprehensive loss (675) (754)Balance, December 31 89,556 85,319 Total Investments in equity accounted investments 89,556 85,319The Company’s interest in equity accounted investments, which is unquoted, is as follows along with summarized financial information:Shareholders Operations:a) United Insurance CompanyAs of Country of Incorporation Assets Liabilities Revenue Profit % Interest Held Carrying amount SAR’000December 31, 2021 * Bahrain 237,855 101,221 42,397 21,840 50% 68,317November 30, 2020 * Bahrain 237,198 101,599 37,243 18,437 50% 67,799* Based on latest available management accounts.7. INVESTMENTS IN EQUITY ACCOUNTED INVESTMENTS (continued)b) Waseel Application Services ProviderAs of Country of Incorporation Assets Liabilities Revenue Profit % Interest Held Carrying amount SAR’000November 30, 2021 * Saudi Arabia 66,817 19,620 30,739 17,772 45% 21,239November 30, 2020 * Saudi Arabia 58,448 19,512 29,381 9,221 45% 17,520* Based on latest available management accounts. | 7 |
| Disclosure of investments held-to-maturity [text block] | 9. 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 Saudi riyals and have an original maturity of more than three months. The average yield on these deposit is 2.86%. (2020: 1.51%).The movements in deposits during the year ended December 31, 2021 and 2020, are as follows: 2021 2020 SAR’000Insurance Operations Balance, January 1 1,291,465 1,577,912 Placed during the year 3,524,148 4,687,222 Matured during the year (3,114,990) (4,973,669)Balance, December 31 1,700,623 1,291,465 Shareholders Operations Balance, January 31 1,843,467 1,961,464 Placed during the year 4,343,475 5,605,750 Matured during the year (4,106,967) (5,723,747)Balance, December 31 2,079,975 1,843,467 Total 3,780,598 3,134,932 | 9 |
| Disclosure of investments in available-for-sale investments [text block] | 8. AVAILABLE-FOR-SALE INVESTMENTSAvailable-for-sale investments comprise the following: 2021 2020Insurance Operations Local funds - 5,060Local funds with regional / foreign exposure 97,316 258,304Local fixed income investments - 86,545Regional / foreign fixed income investments 988,328 1,391,831Local discretionary portfolio management – equity shares 275,414 176,967Private equity investment 10,250 10,250Funds with portfolio manager 168,054 89,707Total 1,539,362 2,018,664 Shareholders’ Operations Local funds - - Local funds with regional / foreign exposure 421,512 486,053Local fixed income investments - 27,217Regional / foreign funds 170,648 140,975Regional / foreign fixed income investments 167,809 139,805Local discretionary portfolio management – equity shares 51,099 -Local discretionary portfolio management – regional equity shares - 53,171Foreign discretionary portfolio management – equity shares - 57,970Private equity investments - 53,145Funds with portfolio manager 20,513 41,566Total 831,581 999,902 Total available-for-sale investments 2,370,943 3,018,566 As at December 31, 2021 the Company has invested in Shariah Notes having fair value amounting to SAR 2.2 billion (2020: SAR 2.8 billion). The Shariah Notes are issued by a special purpose vehicle “SPV” established in Cayman Islands. The administrator of these Shariah Notes is a Company registered in Mauritius. The underlying investments of Shariah Notes include 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.8. AVAILABLE-FOR-SALE INVESTMENTS (Continued)Movements in available-for-sale investments are as follows: 2021 2020 SAR’000Insurance operations Balance, January 1 2,018,664 1,511,524 Purchases 416,823 1,777,122 Reclassification from investment in equity accounted investments - 10,250 Disposals (1,064,852) (1,211,221)Changes in fair value of investments 168,727 (69,011)Balance, December 31 1,539,362 2,018,664 Shareholders’ operations Balance, January 1 999,902 1,235,224 Purchases 456,082 693,086 Disposals (661,285) (969,535)Changes in fair value of investments 36,882 41,127 Balance, December 31 831,581 999,902 Total 2,370,943 3,018,566The movement of changes in fair value of available for sale investments is as follows: 2021 2020 SAR’000Insurance operations Change in fair value 168,727 (69,011)Net gain transferred to the consolidated statement of income on disposal of investments (58,559) (52,336)Impairment on available-for-sale investments - 2,637 110,168 (118,710) Shareholders’ operations Change in fair value 36,882 41,127 Net gain transferred to the consolidated statement of income on disposal of investments (83,398) (1,774)Impairment on available-for-sale investments - 2,175 (46,516) 41,528 Total 63,652 (77,182)The cumulative unrealized gain for available for sale investments and investment in equity accounted investments share of other comprehensive income amounts to SAR 152.5 million (December 31, 2020: loss of SAR 89.5 million). | 8 |
| Disclosure of investments at fair value through statement of income [text block] | 30. 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. 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 following table shows the carrying amount of financial assets and financial liabilities, including their levels in the fair value hierarchy for financial instruments measured at fair value. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation to fair value. SAR’000 2021 Level 1 Level 2 Level 3 TotalAvailable-for- sale investments Insurance operations Mutual funds - 97,316- 97,316Fixed income investments (Governments and corporations securities) 808,128 180,200- 988,328Discretionary portfolio management – equity shares 275,414- - 275,414Private equity investment - - 10,250 10,250Funds with portfolio manager - 168,054- 168,054 1,083,542 445,570 10,250 1,539,362 Shareholders operations Mutual funds - 592,160- 592,160Fixed income investments (Governments and corporations securities) 131,82435,985- 167,809 Local discretionary portfolio management – equity shares 51,099 - - 51,099Funds with portfolio manager - 20,513- 20,513 182,923648,658- 831,581 Total 1,266,4651,094,22810,250 2,370,943 SAR’000 2020 Level 1 Level 2 Level 3 TotalAvailable-for- sale investments Insurance operations Local funds (mutual funds) - 263,364 - 263,364Fixed income investments (Governments and corporations securities) 1,032,744 445,632 - 1,478,376Discretionary portfolio management – equity shares 176,967 - - 176,967Fixed income investments (sukuks) - - 10,250 10,250Funds with portfolio manager - 89,707 - 89,707 1,209,711 798,703 10,250 2,018,664 Shareholders operations Local funds (mutual funds) - 627,028 - 627,028Fixed income investments (Governments and corporations securities) 27,217 139,805 - 167,022Discretionary portfolio management – equity shares 111,141 - - 111,141Private equity investment - - 53,145 53,145Funds with portfolio manager - 41,566 - 41,566 138,358 808,399 53,145 999,902 Total 1,348,069 1,607,102 63,395 3,018,56630. FAIR VALUES OF FINANCIAL INSTRUMENTS (Continued)The valuation of each publicly traded investment classified under level 1 is based upon the closing market price of that security as of the valuation date. The fair value used for valuation of Level 2 fixed income investments and mutual funds are based on prices quoted on reliable and third party sources including Reuters, Bloomberg, etc. Fair value of private equity investment classified in Level 3 are determined based on the recent transaction price. There were no transfers in between levels during the year ended December 31, 2021 and 2020. As at December 31, 2021, the Company has invested an amount of SAR 2.2 billion (2020: SAR 2.8 billion) classified under available for sale investments in Shariah Notes issued by Cayman Shariah Vehicle. The fair values of statutory deposits, accrued investment income on statutory deposit, mudaraba / murabaha deposits, bank balances and other financial assets in the consolidated statement of financial position which are carried at amortised cost, are not significantly different from the carrying values included in the consolidated financial statements due to the short term nature of balances or they are repayable on demand.Reconciliation of recurring fair value measurements categorized within Level 3 of the fair value hierarchy SAR’000 Total gain or loss recognised in December 31, 2021 Balance January 1 Purchases / Transfers Sales Consolidated statement of income Other comprehensive income Balance December 31Insurance operations Private equity investment 10,250 - - - - 10,250 10,250 - - - - 10,250 Shareholders operations Private equity investment 53,145 - (53,145) - - - 53,145 - (53,145) - - - Total 63,395 - (53,145) - - 10,250 SAR’000 Total gain or loss recognised in December 31, 2020 Balance January 1 Purchases / Re-class Sales/ Re-class Consolidated statement of income Other comprehensive income Balance December 31Insurance operations Sukuks 6,341 - (6,341) - - -Private equity investment - 10,250 - - - 10,250 6,341 10,250 (6,341) - - 10,250 Shareholders operations Private equity investment 53,145 - - - - 53,145 Total 59,486 10,250 (6,341) - - 63,39530. FAIR VALUES OF FINANCIAL INSTRUMENTS (Continued)The below table shows significant unobservable inputs used in the valuation of level 3 investments.Description Fair value as at Fair value as at UnobservableInputs Range of inputs Relationships of unobservable inputs to fair value Dec 31, 2021 (SAR) Dec 31, 2020 (SAR) 2021 2020 2021 2020 Private equity investment - 63,395 - Annual growth rate 6% - +/- 25% N/ASensitivity analysis of Level 3 investmentsDecember 31, 2021 Sensitivity factor Impact on fair value due to increase in sensitivity factor Impact on fair value due to decrease in sensitivity factor SAR’000Insurance Operations Private equity investment +/- 10% change in price - - December 31, 2020 Sensitivity factor Impact on fair value due to increase in sensitivity factor Impact on fair value due to decrease in sensitivity factor SAR’000Insurance Operations Private equity investment +/- 10% change in price - - Shareholders operations Private equity investment +/- 10% change in price 5,315 (5,315) | 30 |
| Disclosure of deferred policy acquisition costs [text block] | a) Deferred policy acquisition costs 2021 2020 SAR’000Balance, January 1 134,724 120,845 Incurred during the year 343,490 404,266Amortised during the year (350,263) (390,387)Balance, December 31 127,951 134,724 | 11 (a) |
| Disclosure of premiums/ contributions and insurance/ reinsurance or takaful/ retakaful balance receivables [text block] | 13. RECEIVABLES, NETReceivables comprise net amounts due from the following: 2021 2020 SAR’000 Policyholders 1,468,716 1,978,212Brokers and agents 1,558,297 1,443,859 Related parties (Note 29) 381,729 135,786 3,408,742 3,557,857Receivables from reinsurers 51,409 120,281 Administrative service plan 2,582 3,256 3,462,733 3,681,394Provision for doubtful receivables (240,732) (200,841)Receivables, net 3,222,001 3,480,553Movement in provision for doubtful debts during the year was as follows: 2021 2020 SAR’000Balance, January 1 200,841 151,642 Provision for the year 39,891 49,199 Balance, December 31 240,732 200,841 As at December 31, the ageing of receivables is as follows: Neither past due nor impaired Past due but not impaired Past due and impaired Total Less than 30 days 31 – 60 days 61 - 90 days 91 - 180 days 181 - 360 days More than 360 days SAR’0002021 Premium and reinsurance receivables - Policyholders’ 1,468,716 756,216 257,999 66,072 27,671 37,389 173,861 149,508- Brokers and agents 1,558,297 816,276 83,927 250,539 68,240 245,553 42,380 51,382 - Due from related parties 381,729 30,518 307,023 1,398 1,092 33,526 8,062 110 - Receivable from reinsurers 51,409 - 1,050 21,282 26,529 38 487 2,023 - Administrative service plan 2,582 - - - 118 - - 2,464 Total 3,462,733 1,603,010 649,999 339,291 123,650 316,506 224,790 205,487 13. RECEVABLES, NET (continued) Neither past due nor impaired Past due but not impaired Past due and impaired Total Less than 30 days 31 – 60 days 61 - 90 days 91 - 180 days 181 - 360 days More than 360 days SAR’0002020 Premium and reinsurance receivables - Policyholders’ 1,978,212 807,677 169,141 43,025 567,317 39,248 245,314 106,490 - Brokers and agents 1,443,859 692,210 164,020 170,900 39,173 229,528 107,126 40,902 - Due from related parties 135,786 18,397 104,771 1,786 2,803 7,870 6 153 - Receivable from reinsurers 120,281 - 17,923 5,391 42,164 50,847 657 3,299 - Administrative service plan 3,256 - 792 - - - - 2,464 Total 3,681,394 1,518,284 456,647 221,102 651,457 327,493 353,103 153,308 The Company only enters into insurance and reinsurance contracts with recognised, creditworthy third parties. It is the Company’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivables are monitored on an ongoing basis in order to reduce the Company’s exposure to bad debts.Receivables comprise a large number of customers mainly within the Kingdom of Saudi Arabia and reinsurance companies mainly outside the Kingdom of Saudi Arabia. Receivables include an amount of SAR 417 million (2020: SAR 455 million) due in foreign currencies, mainly in US dollars. The Company’s terms of business require amounts to be paid within 30 to 90 days of the date of the transaction. Arrangements with reinsurers normally require settlement within a certain agreed period. The five largest customers account for 33% (December 31, 2020: 37%) of the premium receivable as at December 31, 2021. | 13 |
| Disclosure of prepayments and other assets [text block] | 10. PREPAID EXPENSES AND OTHER ASSETS 2021 2020 SAR’000Advance to medical service providers and others 257,630 270,329Prepaid expenses 68,290 39,983 Other assets 257,806 465,951 583,726 776,263Other assets include payments made by the Company in relation to VAT assessment raised by Zakat, Tax and Customs Authority (ZATCA) for the years 2018 and 2019 of SAR 143 million. The Company submitted its objections on the ZATCA’s assessment however, these objections were rejected by ZATCA. Therefore in January 2021, the Company filed an appeal with General Secretariat of Tax Committees (GSTC) under the Tax Violations and Dispute Committee (TVDC / GSTC Level 1) to contest the ruling of ZATCA. Following numerous hearings conducted with the TVDC, the TVDC had pronounced a ruling judgment in the favor of the defendant (i.e., ZATCA) in a virtual hearing on 4 October 2021. Subsequent to the year end, TVDC has provided a detailed ruling judgment and reasoning of the TVDC. Based on the above and in accordance with Article 40(2) of the GSTC Rules and Regulation, Tawuniya has filed an appeal to Tax Violations and Dispute Appellate Committee (“TVDAC”) on 16 February 2022 i.e., within 30 days following receipt of the ruling judgment. The Company and advisors believe that there is a strong basis that the assessment raised by the ZATCA of the remaining amounts of SAR 143 million will be reversed at the GSTC Level 2 hearing and the amount will be returned in due course. Based on the management best estimate a provision of SAR 10 million has been recorded in these consolidated financial statements for the year ended 31 December 2021. | 10 |
| Disclosure of cash and cash equivalents [text block] | 15. CASH AND CASH EQUIVALENTS 2021 2020 SAR’000Insurance operations Banks balances and cash 1,161,102 337,359 Total 1,161,102 337,359 Shareholders Operations Banks balances and cash 27,164 108,435 Total 27,164 108,435 Total cash and cash equivalents 1,188,266 445,794Bank balances and cash includes call account balance of SAR 74 million (December 31, 2020: SAR 93 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. | 15 |
| Disclosure of statutory deposit [text block] | 14. 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, 2020: SAR 125 million), in a bank designated by SAMA. The statutory deposit is maintained with the Saudi National Bank and can be withdrawn only with the consent of SAMA. | 14 |
| Disclosure of employees' end of service benefits [text block] | 18. DEFINED BENEFITS OBLIGATION The Company operates an end of service benefits plan for its employees based on the prevailing Saudi Labor Laws. Accruals are made in accordance with the actuarial valuation under projected unit credit method while the benefits payments obligation is discharged as and when it falls due. The amounts recognised in the consolidated statement of financial position and movement in the obligation during the year based on its present value are as follows:18.1 The amounts recognised in the consolidated statement of financial position based on its present value are as follows: 2021 2020 SAR’000Present value of defined benefits obligation 142,110 134,990 142,110 134,99018.2 Movement of defined benefits obligation 2021 2020 SAR’000Opening balance 134,990 129,480Charge to the consolidated statement of income 20,333 14,255 Charge to the consolidated statement of comprehensive income (165) 5,721Payment of benefits during the year (13,048) (14,466)Closing balance 142,110 134,990 18. DEFINED BENEFITS OBLIGATION (Continued) 18.3 Reconciliation of present value of defined benefits obligation 2021 2020 SAR '000Present value of defined benefits obligation as at January 1 134,990 129,480 Current service costs 16,208 11,244 Financial costs 4,125 3,011 Actuarial (gain) / loss from experience adjustments (165) 5,721 Benefits paid during the year (13,048) (14,466)Present value of defined benefits obligation as at December 31 142,110 134,990 18.4 Principal actuarial assumptionsThe following range of significant actuarial assumptions was used by the Company for the valuation of end-of-service benefits: 2021 2020 Valuation discount rate 3% 3%Expected rate of increase in salary level across different age bands 6% 0.5% to 6%In the absence of a deep market for "High Quality" local currency corporate bonds, the valuation discount rate was set based on the yields offered on Saudi domestic Government bonds as stipulated in paragraph 83 of the IAS 19. 18.5 Sensitivity analysis of actuarial assumptionsThe impact of changes in sensitivities on present value of defined benefits obligation is as follows: 2021 2020 SAR '000 Impact on defined benefits obligationValuation discount rate - Increase by 0.5% (4,683) (4,766)- Decrease by 0.5% 4,906 5,085 Expected rate of increase in salary level across different age bands - Increase by 0.5% 4,706 5,005 - Decrease by 0.5% (4,530) (4,499) | 18 |
| Disclosure of gross unearned premiums/ contributions [text block] | c) Unearned premiums 2021 2020 Gross Reinsurers’ share Net Gross Reinsurers’ share Net SAR'000Balance, January 1 4,319,378 (683,698) 3,635,680 3,826,119 (715,959) 3,110,160 Premiums written during the year 10,218,606 (1,594,488) 8,624,118 9,061,768 (1,478,346) 7,583,422 Premiums earned during the year (9,506,719) 1,560,804 (7,945,915) (8,568,509) 1,510,607 (7,057,902)Balance, December 31 5,031,265 (717,382) 4,313,883 4,319,378 (683,698) 3,635,680 | 11 (c ) |
| Disclosure of gross outstanding claims/ benefits [text block] | d) Outstanding claims and other reserves 2021 2020 Gross Reinsurers share Net Gross Reinsurers share Net SAR'000Balance, January 1 4,118,403 (2,252,354) 1,866,049 5,613,305 (3,428,170) 2,185,135 Claims paid (6,764,042) 347,397 (6,416,645) (6,934,440) 1,127,381 (5,807,059)Claims incurred 6,846,886 (186,610) 6,660,276 5,439,538 48,435 5,487,973 Balance, December 31 4,201,247 (2,091,567) 2,109,680 4,118,403 (2,252,354) 1,866,049 Outstanding claims 2,440,830 (1,762,324) 678,506 2,548,105 (1,962,570) 585,535 Salvage and subrogation (40,101) - (40,101) (31,453) - (31,453)Gross outstanding claims 2,400,729 (1,762,324) 638,405 2,516,652 (1,962,570) 554,082 Incurred but not reported claims reserves 1,770,241 (329,243) 1,440,998 1,549,350 (289,784) 1,259,566 Premium deficiency reserve 30,277 - 30,277 52,401 - 52,401 Balance, December 31 4,201,247 (2,091,567) 2,109,680 4,118,403 (2,252,354) 1,866,049 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. Management and its appointed actuary have made a detailed assessment of technical reserves and the various parameters in the valuation of technical liabilities.As at December 31, 2021, based on the recommendations of its appointed actuary, management has recorded technical reserves (Gross outstanding claims and reserves including premium deficiency reserves) which amounted to SAR 4.2 billion (2020: SAR 4.1 billion). Significant portion of reserves relates to medical line of business. As at December 31, 2021 the Company booked five significant outstanding claims amounting to SAR 826 million (2020: four claims of SAR 917 million) with a reinsurance share of outstanding claim at 99.8% (2020: 99.8%) relating to property and casualty line of business. | 11 (d) |
| Disclosure of unearned commission income [text block] | b) Unearned commission income 2021 2020 SAR’000Balance, January 1 37,538 43,323 Commission received during the year 137,045 110,941 Commission earned during the year (132,294) (116,726)Balance, December 31 42,289 37,538 | 11 (b) |
| Disclosure of accrued expenses and other liabilities [text block] | 17. CLAIMS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES 2021 2020 SAR’000Payables to policyholders and hospitals 450,680 1,029,764Payable - Zakat, Tax and Custom Authority 185,481 268,247Accrued expenses 142,894 188,928Marketing representative commissions 18,542 19,172 Insurance share of profit distribution payable 42,800 142,535 Payable - Ministry of Hajj and Umrah 14,851 13,909 Provision for leave encashment 21,221 21,366 Employees’ savings plan (17.1) 37,100 32,834 Lease liability (17.2) 47,149 -Other liabilities 24,677 12,772 985,395 1,729,52717.1 The Company has a savings plan for its Saudi employees under which a definite percentage of the employees’ salary is periodically deducted, with the Company investing this amount through one of the investment funds compatible with the rules of Islamic Shariah. The total number of subscribers at the end of 2021 reached 267 employees (2020: 253 employees) with a subscription amounting to SAR 22.2 million (2020: SAR 20.6 million). | 17 |
| Disclosure of zakat [text block] | 20. ZAKATa) The current year’s provision is based on the following:2021 2020SAR’000Share capital 1,250,000 1,250,000 Reserves, opening provisions and other adjustments 2,051,875 1,629,843 Book value of long term assets (470,936) (472,016) 2,830,939 2,407,827 Adjusted net income 424,224 591,204 Zakat @ 2.578% on Zakat base 72,972 62,074 Zakat @ 2.5% on adjusted net income 10,606 14,780 83,578 76,854As the zakat base for the year is higher than the zakatable income, the zakat for the year is calculated at 2.578% on the zakat base and 2.5% on adjusted net income for the year.b) The movement in the zakat provision for the year was as follows:2021 2020SAR’000Balance, January 1 346,224 255,554Provided during the year 83,578 76,854 Charge for the prior years - 44,275Payments during the year (14,779) (30,459)Balance, December 31 415,023 346,224 c) Status of Assessments:The Company has filed Zakat returns with the Zakat, Tax and Customs Authority (ZATCA) for the years from 2014 to 2020.The ZATCA issued assessments for the years 2014 to 2018 and objection was lodged against those years. For 2014 to 2018, the ZATCA rejected the appeal and the company filed their appeal case at the General Secretariat of Tax Committees (GSTC). The company also approached the Alternative Dispute Resolution Committee (ADRC) to discuss an amicable settlement of their contested appeal matters for the years 2014 to 2018. Subsequent to the year ended December 31, 2021, the Company agreed on a settlement with the ADRC amounting to SAR 221 million for the assessment years 2014 to 2018. Furthermore, ZATCA has started its review procedures for years 2019 and 2020 but has not raised any final assessment related to these years. Management believes that appropriate and adequate provisions have been created and that the finalization of the above mentioned assessments is not expected to have a material impact on the consolidated financial statements for the year ended 2021. | 20 |
| Disclosure of classes of share capital [text block] | 21. SHARE CAPITALThe authorized, issued and paid up capital of the Company is SAR 1.25 billion at December 31, 2021 (2020: SAR 1.25 billion) consisting of 125 million shares of SAR 10 each.Shareholding structure of the Company is as below. The shareholders of the Company are subject to zakat.2021Authorized and issued Paid upNo. of Shares SAR'000Held by the public 79,025,509 790,255 790,255 General Organization for Social Insurance 45,974,491 459,745 459,745 125,000,000 1,250,000 1,250,000 2020 Authorized and issued Paid up No. of Shares SAR'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 During the year, the Saudi Cabinet approved to merge Public Pension Agency (“PPA”) into General Organization for Social Insurance (“GOSI”), consequently the holding percentage of GOSI reached 36.77% (December 31, 2020: PPA is 18.89%, GOSI 17.88%).During the year ended December 31, 2021, the Company has announced the dividend of SAR 100 million on April 6, 2021 which constitute SAR 0.8 per share. | 21 |
| Disclosure of statutory reserve [text block] | 23. STATUTORY 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 statutory reserve until it equals the value of share capital. This transfer is only made at the year end. The statutory reserve is not available for distribution to the shareholders until the liquidation of the Company. | 23 |
| Disclosure of general and administrative expense [text block] | 26. GENERAL AND ADMINISTRATIVE EXPENSES2021 2020SAR’000Salaries and benefits 503,350 421,306 Advertising 43,197 45,426 Insurance, utilities and maintenance 19,640 16,959 Depreciation (Note 4,6) 27,299 29,445 Communications 15,864 10,576 Office supplies and printing 4,525 3,359 Training and education 2,693 4,478 Professional fees 25,502 5,901 Indirect cost charge 952 9,165 License and other charges 45,524 32,104 Unrecoverable VAT and penalties 18,933 -Others 38,789 49,443 746,268 628,162 | 26 |
| Disclosure of investments income [text block] | 25. INVESTMENT INCOME, net 2021 2020SAR'000Insurance Operations Available-for-sale: - Dividend income - 2,318- Commission income 87,192 102,833- Realized gain on sale (Note 8) 58,559 52,336Investment income, net 145,751 157,487 Shareholders Operations Available-for-sale: - Dividend income - 6,124- Commission income 58,854 52,027- Realized gain on sale (Note 8) 83,398 1,774- Investment fees (3,818) (8,620)Investment income, net 138,434 51,305 Total investment income, net 284,185 208,792 | 25 |
| Disclosure of other income [text block] | 28. ACCRUED INVESTMENT INCOMEThe Company has recorded an accrued investment income on available-for-sale investments amounting to SAR 11 million (2020: SAR 2.4 million). | 28 |
| Disclosure of earnings per share [text block] | 27. BASIC AND DILUTED EARNINGS PER SHAREBasic and diluted earnings per share have been calculated by dividing the income for the year by 125 million shares. | 27 |
| Disclosure of related party transactions [text block] | 29. RELATED PARTY TRANSACTIONS AND BALANCESRelated parties represent major shareholders, directors and key management personnel of the Group, 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 Group’s management and Board of Directors. The following are the details of the major related party transactions during the year and the related balances at December 31:Amount of transactions for the year endedSAR’000 Balance receivable / (payable) as atSAR’0002021 2020 2021 2020Major shareholders Insurance premium written 56,298 62,906 15,951 6,786Allowance for doubtful debts - - (2,457) (476)Claims paid to medical services providers 68 346 - -General Organization for Social Insurance - other services 145 134 - -Rent expenses paid - 125 - - Associates Insurance premium written 887 742 75 -Waseel fees paid 3,755 3,983 - -United Insurance Company B.S.C. fees and claims 6,848 7,297 582 223 Entities controlled, jointly controlled or significantly influenced by related parties Insurance premium written 614,440 226,811 365,722 129,000Allowance for doubtful debts - - (4,670) (821)Claims paid to medical services providers 602 1,610 - -Rent expenses paid 1,666 763 (561) (561)Amount of claims paid to medical services providers - - - -In accordance with the Company’s Articles of Association, the Board of Directors is entitled each year to remuneration up to 10% of the remaining profit from Shareholders’ operations, as defined, based on a decision by the General Assembly.Remuneration and compensation of BOD Members and Top ExecutivesThe following table shows the annual salaries, remuneration and allowances obtained by the Board members and five top executives for the year ended December 31, 2021 and 2020:2021 BOD members (Executives) BOD members (Non-Executive) Top Executives including the CEO and CFO SAR’000Salaries and compensation - - 7,995Allowances - 550 3,438Annual remuneration - 4,612 9,069End of service indemnities - - 2,332 Total - 5,162 22,8342020 BOD members (Executives) BOD members (Non-Executive) Top Executives including the CEO and CFO SAR’000Salaries and compensation - - 7,279 Allowances - 763 3,063 Motivational plans - - 1,556Annual remuneration - 3,780 8,710End of service indemnities - - 819 Total - 4,543 21,427 | 29 |
| Disclosure of entity's operating segments [text block] | 31. OPERATING SEGMENTS Consistent with the Company’s internal reporting process, operating segments have been approved by the 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 insurance operations’ property and equipment, intangible assets, investment properties, available for sale investments, mudaraba / murabaha deposits, prepaid expenses and other assets, receivables, net, accrued investment income and cash and cash equivalents. Accordingly, they are included in unallocated assets. Segment liabilities do not include insurance operations’ surplus distribution payable, defined benefits obligation, claims payable, accrued expenses and other liabilities, short-term borrowings and reinsurers’ balances payable. 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. | 31 |
| Disclosure of capital management [text block] | 34. CAPITAL MANAGEMENTThe Company manages its capital to ensure that it is able to continue as a going concern and comply with the regulators’ capital requirements of the markets in which the Company operates while maximizing the return to stakeholders through the optimization of the debt and equity balance. The capital structure of the Company consists of equity attributable to equity holders comprising paid share capital, reserves and retained earnings. As per guidelines laid out by SAMA in Article 66 of the Implementing Regulations of the Cooperative Insurance Companies Control Law detailing the solvency margin required to be maintained, the Company shall maintain solvency margin equivalent to the highest of the following three methods as per SAMA Implementing Regulations: Minimum Capital Requirement of SAR 200 million Premium Solvency Margin Claims Solvency MarginAs at December 31, 2021 the Company’s solvency level is higher than the minimum solvency margin required by the Implementing Regulations of the Cooperative Insurance Companies Control Law. The capital structure of the Company as at December 31, 2021 consists of paid-up share capital of SAR 1,250 million, statutory reserves of SAR 1,197 million and retained earnings of SAR 459 million (December 31, 2020: paid-up share capital of SAR 1,250 million, statutory reserves of SAR 1,144 million and retained earnings of SAR 345.9 million) in the consolidated statement of financial position. | 34 |
| Disclosure of insurance/ takaful operations surplus and dividends [text block] | 16. SURPLUS DISTRIBUTION PAYABLEInsurance Operations’ surplusThe insurance operations invests its surplus funds in investments as disclosed in Notes 8 and 9. Changes in the fair value of available-for-sale investments at December 31, 2021 are not considered as part of the net surplus available for distribution to policyholders. At the time such investments are sold or gains and losses are realized, they will be included in the consolidated statement of income as surplus attributable to insurance operation. Insurance Operations’ surplus for all the year till 2020 is allocated and awaiting details from policyholders to reimburse the same. | 16 |
| Disclosure of claims/ benefits development table [text block] | 19. CLAIMS DEVELOPMENT TABLEThe following reflects the cumulative incurred claims, including both claims notified and incurred but not reported for each successive accident year at each consolidated statement of financial position date, together with the cumulative payments to date. The development of insurance liabilities provides a measure of the Company's ability to estimate the ultimate value of the claims.The Company aims to maintain adequate reserves in respect of its insurance business in order to protect against adverse future claims experience and developments. The IBNR estimate pertains to claims liability for the periods beginning from 2014 onwards whose claim experience has not been fully developed.Claims triangulation analysis is by accident years spanning a number of financial years.Claims development table gross of reinsurance:2021 2016 & Earlier 2017 2018 2019 2020 2021 TotalAccident year SAR '000Estimate of ultimate claims cost: At the end of accident year 33,073,839 5,842,642 7,423,498 5,946,045 4,554,242 6,020,437 One year later 33,969,439 7,065,784 8,583,529 7,129,338 5,521,225 Two years later 33,989,719 7,263,141 8,587,813 7,052,371 Three years later 34,048,547 7,303,280 8,427,517 Four years later 34,031,203 7,284,187 Five years later 33,956,906 Current estimate of cumulative claims 33,956,906 7,284,187 8,427,517 7,052,371 5,521,225 6,020,437 68,262,643Cumulative payments to date (33,632,067) (7,108,392) (8,107,618) (6,359,779) (5,209,984) (5,403,973) (65,821,813)Liability recognised in the consolidated statement of financial position 324,839 175,795 319,899 692,592 311,241 616,464 2,440,830Salvage and subrogation (40,101)Incurred but not reported claims 27,267 12,114 6,372 5,388 103,582 1,615,518 1,770,241Premium deficiency reserve 30,277Outstanding claims and reserves 4,201,2472020 2015 & Earlier 2016 2017 2018 2019 2020 TotalAccident year SAR '000Estimate of ultimate claims cost: At the end of accident year 27,341,158 5,004,460 5,842,642 7,423,498 5,946,045 4,554,242 One year later 28,069,379 6,045,645 7,065,784 8,583,529 7,129,338 Two years later 27,923,794 6,161,715 7,263,141 8,587,813 Three years later 27,828,004 6,251,565 7,303,280 Four years later 27,796,982 6,250,074 Five years later 27,781,129 Current estimate of cumulative claims 27,781,129 6,250,074 7,303,280 8,587,813 7,129,338 4,554,242 61,605,876Cumulative payments to date (27,579,803) (6,039,881) (7,100,444) (7,965,675) (6,240,366) (4,131,602) (59,057,771)Liability recognised in the consolidated statement of financial position 201,326 210,193 202,836 622,138 888,972 422,640 2,548,105 Salvage and subrogation (31,453)Incurred but not reported claims 31,503 14,012 10,140 19,974 41,437 1,432,284 1,549,350Premium deficiency reserve 52,401Outstanding claims and reserves 4,118,403Claims development table net of reinsurance: 2021 2016 & Earlier 2017 2018 2019 2020 2021 TotalAccident year SAR '000Estimate of ultimate claims cost: At the end of accident year 26,043,900 5,444,158 5,219,686 4,773,695 4,370,007 5,764,221 One year later 27,041,135 6,521,216 5,952,086 5,824,840 5,143,894 Two years later 27,213,751 6,693,505 6,302,817 5,840,405 Three years later 27,220,649 6,713,412 6,297,516 Four years later 27,203,968 6,702,493 Five years later 27,176,131 Current estimate of cumulative claims 27,176,131 6,702,493 6,297,516 5,840,405 5,143,894 5,764,221 56,924,660 Cumulative payments to date (27,066,295) (6,665,283) (6,266,416) (5,810,428) (5,103,877) (5,333,855) (56,246,154) Liability recognised in the consolidated statement of financial position 109,836 37,210 31,100 (5,810,428) 40,017 430,366 678,506 Salvage and subrogation (40,101) Incurred but not reported claims 33,029 5,921 2,951 4,992 97,459 1,296,646 1,440,998Premium deficiency reserve 30,277Outstanding claims and reserves 2,109,6802020 2015 & Earlier 2016 2017 2018 2019 2020 TotalAccident year SAR '000Estimate of ultimate claims cost: At the end of accident year 20,905,829 4,468,422 5,444,158 5,219,686 4,773,695 4,370,007 One year later 21,575,478 5,423,773 6,521,216 5,952,086 5,824,840 Two years later 21,617,362 5,618,128 6,693,505 6,302,817 Three years later 21,595,623 5,631,093 6,713,412 Four years later 21,589,556 5,628,993 Five years later 21,574,975 Current estimate of cumulative claims 21,574,975 5,628,993 6,713,412 6,302,817 5,824,840 4,370,007 50,415,044Cumulative payments to date (21,478,701) (5,584,862) (6,662,809) (6,253,776) (5,779,322) (4,070,039) (49,829,509) Liability recognised in the consolidated statement of financial position 96,274 44,131 50,603 49,041 45,518 299,968 585,535 Salvage and subrogation (31,453) Incurred but not reported claims 28,815 13,655 9,742 16,661 33,317 1,157,376 1,259,566 Premium deficiency reserve 52,401 Outstanding claims and reserves 1,866,049 | 19 |
| Disclosure of commitments and contingencies, general [text block] | 36. CONTINGENT LIABILITIESAs at December 31, 2021, the Company was contingently liable for letters of guarantees, issued on its behalf by the banks, amounting to SAR 258 million (December 31, 2020: 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 consolidated financial statements. | 36 |
| Disclosure of risk management [abstract] | | |
| Disclosure of insurance/ takaful risk [text block] | 33. RISK MANAGEMENT(a) Insurance riskThe risk under an insurance contract is the risk that an insured event will occur including the uncertainty of the amount and timing of any resulting claim. The principal risk the Company faces under such contracts is that the actual claims and benefits payments exceed the carrying amount of insurance liabilities. This is influenced by the frequency of claims, severity of claims, actual benefits paid being greater than originally estimated and subsequent development of long-term claims.The variability of risks is improved by diversification of risk of loss to a large portfolio of insurance contracts as a more diversified portfolio is less likely to be affected across the board by change in any subset of the portfolio, as well as unexpected outcomes. The variability of risks is also improved by careful selection and implementation of underwriting strategy and guidelines as well as the use of reinsurance arrangements.Significant portion of reinsurance business ceded is placed on treaty and facultative basis with retention limits varying by product lines. Amounts recoverable from reinsurers are estimated in a manner consistent with the assumptions used for ascertaining the underlying policy benefits and are presented in the consolidated statement of financial position as reinsurance assets.Although the Company has reinsurance arrangements, it is not relieved of its direct obligation to its policyholders and thus a credit exposure exists with respect to reinsurance ceded, to the extent that any reinsurer is unable to meet its obligation assumed under such reinsurance arrangements.Frequency and severity of claimsThe frequency and severity of claims can be affected by several factors like natural disasters, flood, environmental and economical, atmospheric disturbances, concentration of risks, civil riots etc. The Company manages these risk through the measures described above. The Company has limited its risk by imposing maximum claim amounts on certain contracts as well as the use of reinsurance arrangements in order to limit exposure to catastrophic events (e.g., hurricanes, earthquakes and flood damage). The purpose of these underwriting and reinsurance strategies is to limit exposure to catastrophes based on the Company’s risk appetite as decided by management. Concentration of insurance riskThe Company monitors concentration of insurance risks primarily by class of business. The major concentration lies in medical segment.The Company also monitors concentration of risk by evaluating multiple risks covered in the same geographical location. For flood or earthquake risk, a complete city is classified as a single location. For fire and property risk a particular building and neighboring buildings, which could be affected by a single claim incident, are considered as a single location. Similarly, for marine risk, multiple risks covered in a single vessel voyage are considered as a single risk while assessing concentration of risk. The Company evaluates the concentration of exposures to individual and cumulative insurance risks and establishes its reinsurance policy to reduce such exposures to levels acceptable to the Company.Since the Company operates majorly in Saudi Arabia, hence, all the insurance risks relate to policies written in Saudi Arabia.Sources of uncertainty in estimation of future claim paymentsThe key source of estimation uncertainty at the consolidated statement of financial position date relates to valuation of outstanding claims, whether reported or not, and includes expected claims settlement costs. Considerable judgment by management is required in the estimation of amounts due to policyholders arising from claims made under insurance contracts. Such estimates are necessarily based on assumptions about several factors involving varying and possibly significant degrees of judgment and uncertainty and actual results may differ from management’s estimates resulting in future changes in estimated liabilities. Qualitative judgments are used to assess the extent to which past trends may not apply in the future, for example one-off occurrence, changes in market factors such as public attitude to claiming and economic conditions. Judgment is further used to assess the extent to which external factors such as judicial decisions and government legislation affect the estimates.In particular, estimates have to be made both for the expected ultimate cost of claims reported at the consolidated statement of financial position date and for the expected ultimate cost of claims incurred but not reported (IBNR) at the consolidated statement of financial position date. Process used to decide on assumptionsThe process used to determine the assumptions for calculating the outstanding claim reserve is intended to result in neutral reasonable estimates of the most likely or expected outcome. The nature of the business makes it very difficult to predict with certainty the likely outcome of any particular claim and the ultimate cost of notified claims. Each notified claim is assessed on a separate, case by case basis with due regard to claim circumstances, information available from surveyors and historical evidence of the size of similar claims. Case estimates are reviewed regularly and are updated as and when new information is available.The estimation of IBNR is generally subject to a greater degree of uncertainty than the estimation of the cost of settling claims already notified to the Company, in which case information about the claim event is available. The estimation process takes into account the past claims reporting pattern and details of reinsurance programs. The premium liabilities have been determined such that the total premium liability provisions (unearned premium reserve and premium deficiency reserve in result of liability adequacy test) would be sufficient to service the future expected claims and expenses likely to occur on the unexpired policies as at the consolidated statement of financial position date. The expected future liability is determined using estimates and assumptions based on the experience during the expired period of the contracts and expectations of future events that are believed to be reasonable. Sensitivity analysisThe Company believes that the claim liabilities under insurance contracts outstanding at the year-end are adequate. However, these amounts are not certain and actual payments may differ from the claims liabilities provided in the consolidated financial statements. The insurance claim liabilities are sensitive to the various assumptions. It has not been possible to quantify the sensitivity of specific variable such as legislative changes or uncertainty in the estimation process. A hypothetical 10% change in the claim ratio, net of reinsurance, would impact income from insurance operations as follows; Surplus from insurance operations Impact of change in claim ratio by + / - 10% 2021 2020 SAR’000Medical 164,778 137,238 Medical –Umrah 140 28 Motor 29,128 34,090Property and casualty 14,157 15,012 General Accident – Umrah 240 3 Travel & COVID-19 2,011 - Protection & Savings 275 234 210,729 186,605 | 33 (a) |
| Disclosure of reinsurance/ retakaful risk [text block] | (b) Reinsurance riskIn order to minimize financial exposure arising from large claims, the Company, in the normal course of business, enters into agreements with other parties for reinsurance purposes.To minimize its exposure to significant losses from reinsurer insolvencies, the Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from similar geographic regions, activities or economic characteristics of the reinsurers.Reinsurers are selected using the following parameters and guidelines set by the Company’s Board of Directors and Reinsurance Committee. The criteria may be summarized as follows:- Minimum acceptable credit rating by recognised rating agencies (e.g. S&P) that is not lower than BBB or equivalent- Reputation of particular reinsurance companies- Existing or past business relationship with the reinsurer.Furthermore, the financial strength and managerial and technical expertise as well as historical performance of the reinsurers, wherever applicable, are thoroughly reviewed by the Company and agreed to pre-set requirements of the Company’s Board of Directors and Reinsurance Committee before approving them for exchange of reinsurance business. As at December 31, 2021 and 2020, there is no significant concentration of reinsurance balances.Reinsurance ceded contracts do not relieve the Company from its obligation to policyholders and as a result the Company remains liable for the portion of outstanding claims reinsured to the extent that the reinsurer fails to meet the obligation under the reinsurance agreements. | 33 (b) |
| Disclosure of market risk [text block] | (c) Market Risk Market risk is the risk that the value of the financial instrument may fluctuate as a result of changes in market commission rates or the market price of securities or the instrument, change in market sentiments, speculative activities, supply and demand for securities and liquidity in the market.The Board of Directors of the Company ensure that the overall market risk exposure is maintained at prudent levels and is consistent with the available capital. While the Board gives a strategic direction and goals, risk management function related to market risk is mainly the responsibility of investment management team supported by risk management team. The team prepares forecasts showing the effects of various possible changes in market conditions related to risk exposures. This risk is being mitigated through the proper selection of securities. The Company maintains diversified portfolio and performs regular monitoring of developments in related markets. In addition, the key factors that affect stock and sukuk market movements are monitored, including analysis of the operational and financial performance of investees.Market risk comprises of three types of risk: currency risk, commission rate risk and other price risk.Currency RiskCurrency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The Company has foreign currency transactions in respect of its insurance activities, available for sale investments and mudaraba / murabaha deposits which are predominantly conducted in USD and SAR. The Company is not exposed to its dealing in USD since SAR is pegged with USD. The transactions in currencies other than SAR and USD are not significant and accordingly the Company is not exposed to currency risk.Commission Rate RiskThe Company invests in securities and has deposits that are subject to commission rate risk. Commission rate risk to the Company is the risk of changes in commission rates reducing the overall return on its fixed commission rate bearing securities. The Commission rate risk is limited by monitoring changes in commission rates and by investing in floating rate instruments. An increase or decrease of 100 basis points in interest yields would result in a change in the profit for the year by SAR 1.46 million (2020: SAR 1.54 million).The commission and non-commission bearing investments of the Company and their maturities as at December 31, 2021 and 2020 are as follows: Less than 1 year More than 1 year Non-commission bearing TotalInsurance Operations SAR’0002021 Mudaraba / murabaha deposits 1,700,623 - - 1,700,623Available for sale investments - 988,328 551,034 1,539,362 Cash and cash equivalents - - 1,161,102 1,161,102Total 1,700,623 988,328 1,712,136 4,401,087 2020 Mudaraba / murabaha deposits 1,291,465 - - 1,291,465 Available for sale investments 24,574 847,267 1,146,823 2,018,664 Cash and cash equivalents - - 337,359 337,359 Total 1,316,039 847,267 1,484,182 3,647,488 Shareholders Operations 2021 Mudaraba / murabaha deposits 2,079,975 - - 2,079,975Available for sale investments - 167,808 663,773 831,581 Cash and cash equivalents - - 27,164 27,164Total 2,079,975 167,808 690,937 2,938,720 2020 Mudaraba / murabaha deposits 1,843,467 - - 1,843,467 Available for sale investments 3,048 171,284 825,570 999,902 Cash and cash equivalents - - 108,435 108,435 Total 1,846,515 171,284 934,005 2,951,804 33. RISK MANAGEMENT (Continued)(c) Market risk (continued)The impact of hypothetical change of a 10% increase and 10% decrease in the commission rates of investments on the Company's income and other comprehensive would be as follows: Rate change Effect on Company’s income SAR’000 Effect on Company’s total comprehensive income SAR’000 Effect on Company’s total equity SAR’000 December 31, 2021 + / - 10% 14,604 14,604 14,604 December 31, 2020 + / - 10% 15,486 15,486 15,486 Other Price RiskOther price risk is the risk that the fair value or future cash flows of financial instruments will fluctuate because of changes in market prices (other than those arising from commission rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. The Company's investments amounting SAR 327 million (2020: SAR 288 million) are susceptible to market price risk arising from uncertainty about the future value of invested securities. The Company limits this nature of market risk by diversifying its invested portfolio and by actively monitoring the developments in markets.The impact of hypothetical change of a 10% increase and 10% decrease in the market prices of investments on the Company's income and other comprehensive would be as follows: Fair value change Effect on Company’s other comprehensive income SAR’000 Effect on Company’s total equity SAR’000 December 31, 2021 + / - 10% 32,651 32,651December 31, 2020 + / - 10% 28,810 28,810 The sensitivity analysis presented is based upon the portfolio position as at December 31, 2021 and 2020. Accordingly, the sensitivity analysis prepared is not necessarily indicative of the effect on the Company's assets of future movements in the value of investments held by the Company. The sensitivity of level 3 investments is disclosed in note 30. | 33 (c ) |
| Disclosure of credit risk [text block] | (d) Credit RiskCredit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. For all classes of financial instruments held by the Company, the maximum credit risk exposure to the Company is the carrying value as disclosed in the consolidated statement of financial position.The Company seeks to manage its credit risk with respect to customers by following the Company’s credit control policy and monitoring outstanding receivables on an on-going basis in order to reduce the Company’s exposure to bad debts. The management estimates specific impairment provisions on a case by case basis. In addition to specific provisions, the Company also makes an additional portfolio provision, estimated on a collective basis, based on the ageing profile of the premiums receivable. The Company seeks to limit its credit risk with respect to other counterparties by placing deposits and investments with reputable financial institutions. The Company enters into reinsurance contracts with recognised, creditworthy third parties (rated A or above).The table below shows the maximum exposure to credit risk for the relevant components of the consolidated statement of financial position:2021 2020SAR’000ASSETS - INSURANCE OPERATIONS Cash and cash equivalents 1,161,102 337,359 Receivables, net 3,222,001 3,480,553Available-for-sale investments 1,539,362 2,018,664 Mudaraba / murabaha deposits 1,700,623 1,291,465 Accrued investment income 6,893 1,333 Other assets 582,279 776,263Reinsurers’ share of gross outstanding claims, net (including IBNR) 2,091,567 2,252,354 Total 10,303,827 10,157,9912021 2020SAR’000ASSETS - SHAREHOLDERS’ OPERATIONS Cash and cash equivalents 27,164 108,435 Available-for-sale investments 831,581 999,902Mudaraba / murabaha deposits 2,079,975 1,843,467 Accrued investment income 4,136 1,064 Statutory deposit (including accrued income) 128,050 127,774 Total 3,070,906 3,080,642Concentration of credit riskConcentration of credit risk exists when changes in economic or industry factors similarly affect groups of counterparties whose aggregate credit exposure is significant in relation to the Company’s total credit exposure. Approximately 99% (2020: approximately 99%) of the Company’s underwriting activities are carried out in Saudi Arabia. The Company’s portfolio of financial instruments is broadly diversified and transactions are entered into with diverse credit-worthy counterparties thereby mitigating any significant concentrations of credit risk. For concentration of credit risk pertaining to receivables, refer note 13. The Company has significant exposure amounting to SAR 2.2 billion (2020: SAR 2.8 billion) classified as available for sale investments in Shariah Notes issued by Castle Investments Limited (Refer Note 8).Credit risk exposure investmentsThe table below provides information regarding the credit risk exposure of the Company by classifying assets according to the Company’s credit rating of counterparties. Investment grade ratings refers to companies with sound credit standing of AA to BBB- (as per S&P) and/or Aaa to Baa3 (as per Moody’s). Ratings below the mentioned threshold are considered sub-investment grade with a higher default risk. 2021 2020SAR '000 SAR '000ASSETS INSURANCE OPERATIONS Investment Grade Non-investment Grade Others* Investment Grade Non-investment Grade Others*Available-for-sale investments 1,539,362 - - 2,018,664 - -Mudaraba / murabaha deposits 1,700,623 - - 1,291,465 - -Receivables, net - - 3,222,001 - - 3,480,553Accrued investment income 6,893 - - 1,333 - -Cash and cash equivalents 1,161,102 - - 337,359 - - Total 4,407,980 - 3,222,001 3,648,821 - 3,480,5532021 2020SAR '000 SAR '000ASSETSSHAREHOLDERS OPERATIONS Investment Grade Non-investment Grade Others* Investment Grade Non-investment Grade Others*Available-for-sale investments 831,581 - - 999,902 - -Mudaraba / murabaha deposits 2,079,975 - - 1,843,467 - -Accrued investment income 4,136 - - 1,064 - -Cash and cash equivalents 27,164 - - 108,435 - -Total 2,942,856 - - 2,952,868 - -* Others include premium receivables from policyholders. The Company’s portfolio mainly comprise of Government clients and high credit-worthy corporate clients. | 33 (d) |
| Disclosure of liquidity risk [text block] | (e) Liquidity riskLiquidity risk is the risk that the Company will encounter difficulty in raising funds to meet obligation and commitments associated with financial liabilities. The Company has a proper cash management system, where daily cash collections and payments are strictly monitored and reconciled on a regular basis. The Company manages liquidity risk by maintaining maturities of financial assets and financial liabilities and investing in liquid financial assets.The table below summarizes the maturities of the Company's discounted contractual obligation relating to financial assets and liabilities: Maturity Profile 2021 2020SAR '000 SAR '000ASSETS INSURANCE OPERATIONS Less than one year More than one year Total Less than one year More than one year TotalAvailable-for-sale investments 1,539,362 - 1,539,362 2,018,664 - 2,018,664 Mudaraba / murabaha deposits 1,700,623 - 1,700,623 1,291,465 - 1,291,465 Receivables, net 3,222,001 - 3,222,001 3,480,553 - 3,480,553Prepaid expenses and other assets 582,279 - 582,279 776,263- 776,263Accrued investment income 6,893 - 6,893 1,333 - 1,333 Cash and cash equivalents 1,161,102 - 1,161,102 337,359 - 337,359 Reinsurers’ share of gross outstanding claims 1,762,324 - 1,762,324 1,962,570 - 1,962,570 Reinsurers’ share of incurred but not reported claims 329,243 - 329,243 289,784 - 289,784 Total 10,303,827 - 10,303,827 10,157,991- 10,157,991 LIABILITIES INSURANCE OPERATIONS Reinsurers’ balances payable 503,409 - 503,409 254,559 - 254,559 Gross outstanding claims 2,400,729 - 2,400,729 2,516,652 - 2,516,652 Incurred but not reported claims reserve 1,770,241 - 1,770,241 1,549,350 - 1,549,350 Premium deficiency reserve 30,277 - 30,277 52,401 - 52,401 Reserve for takaful activities 3,372 - 3,372 3,544 - 3,544 Claims payable, accrued expenses and other liabilities 928,842 - 928,842 1,725,446- 1,725,446Lease liabilities 8,273 38,876 47,149 - - -Defined benefits obligation 142,110 - 142,110 134,990 - 134,990 Short term borrowings - - - 401,998 - 401,998Surplus distribution payable 258,163 - 258,163 252,086 - 252,086 6,045,416 38,876 6,084,292 6,489,028- 6,489,028 Total liquidity gap 4,258,411 (38,876) 4,219,535 3,668,963- 3,668,9632021 2020SAR '000 SAR '000ASSETSSHAREHOLDERS OPERATIONS Less than one year More than one year Total Less than one year More than one year TotalAvailable-for-sale investments 831,581 - 831,581 828,618 171,284 999,902 Accrued investment income 4,136 - 4,136 1,064 - 1,064 Mudaraba / murabaha deposits 2,079,975 - 2,079,975 1,843,467 - 1,843,467 Statutory deposit (including accrued income) 3,050 125,000 128,050 2,774 125,000 127,774Cash and cash equivalents 27,164 - 27,164 108,435 - 108,435 Total 2,945,906 125,000 3,070,906 2,784,358 296,284 3,080,642 LIABILITIES SHAREHOLDERS OPERATIONS Dividends payable 8,630 - 8,630 6,411 - 6,411 Return payable on statutory deposit 3,050 - 3,050 2,774 - 2,774Claims payable, accrued expenses and other liabilities 9,404 - 9,404 4,081 - 4,081 21,084 - 21,084 13,266 - 13,266 Total liquidity gap 2,924,822 125,000 3,049,822 2,771,092 296,284 3,067,376To manage the liquidity risk arising from financial liabilities mentioned above, the Company holds liquid assets comprising cash and cash equivalents and investment securities. These assets can be readily sold to meet liquidity requirements.The assets with maturity less than one year are expected to realize as follows: Available for sale investments are held for cash management purposes and expected to be matured / settled within 12 months from the consolidated statement of financial position date. Accrued investment income is expected to be realized within 1 to 3 months from consolidated statement of financial position’s date. Mudaraba / murabaha deposits are deposits placed with high credit rating financial institutions with maturity within six months from the date of placement. Cash and bank balances are available on demand. Reinsurers’ share of outstanding claims majorly pertain to property and casualty segment and are generally realized within three to six months based on settlement of balances with reinsurers.The liabilities with maturity less than one year are expected to settle as follows: Reinsurers’ balances payable are settled on a quarterly basis as per terms of reinsurance agreements. Majority of gross outstanding claims are expected to be settled within two months in accordance with statutory timelines for payment. Property and casualty policies due to the inherent nature are generally settled within one month from the date of receipt of loss adjustor report. The claims payable, accrued expenses and other liabilities are expected to settle within a period of three months from the period end date. Surplus distribution payable is to be settled within six months of annual general meeting in which consolidated financial statements are approved. | 33 (e ) |
| Disclosure of operational/ process risk [text block] | (f) Operational RiskOperational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the processes, technology and infrastructure supporting the Company’s operations either internally within the Company or externally at the Company’s service providers, and from external factors other than credit, market and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of investment management behavior. Operational risks arise from all of the Company’s activities.The Company’s objective is to manage operational risk so as to balance limiting of financial losses and damage to its reputation with achieving its investment objective of generating returns for investors. The primary responsibility for the development and implementation of controls over operational risk rests with the Board of Directors. This responsibility encompasses the controls in the following areas:- Requirements for appropriate segregation of duties between various functions, roles and responsibilities;- Requirements for the reconciliation and monitoring of transactions;- Compliance with regulatory and other legal requirements;- Documentation of controls and procedures;- Requirements for the periodic assessment of operational risks faced, and the adequacy of controls and procedures to address the risks identified;- Ethical and business standards; and- Risk mitigation policies and procedures.Senior Management ensures that the Company's staff has adequate training and experience and fosters effective communication related to operational risk management. | 33 (f) |
| Disclosure of comparative figures [text block] | 38. RECLASSIFICATION AND RESTATEMENT OF COMPARATIVE FIGURES Certain of the prior period amounts have been reclassified to conform to the presentation in the current period. These changes were made for better presentation of balances and transactions in the consolidated financial statements of the Group. These changes do not have impact on the consolidated statement of income and retained earnings.Financial statement line item Balance as previously stated SAR’000 Effect of restatementSAR’000 Balance as restatedSAR’000Prepaid expenses and other assets 616,895 159,368776,263Surplus distribution payable 84,893 167,193 252,086Claims payable, accrued expenses and other liabilities 1,737,352 (7,825)1,729,527The Company has reclassified SAR 8.1 million from ‘Policy acquisition costs’ to Other (expenses) / income, net for better presentation of transactions in the consolidated statement of income of the Group. | 38 |
| Disclosure of board of director's approval of the financial statements [text block] | APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTSThe consolidated financial statements have been approved by the Board of Directors, on Shaʻban 07, 1443H, corresponding to March 10, 2022. | 39 |
| Disclosure of other notes relevant to understanding of financial statements [text block] | 5. INTANGIBLE ASSETS2021 2020SAR’000Cost: January 1 27,211 22,417 Additions 13,938 4,794 December 31 41,149 27,211Accumulated Amortisation: January 1 19,503 18,446 Charge for the year 5,019 1,057 December 31 24,522 19,503Net book value 16,627 7,708Amortisation is charged to general and administrative expenses in the consolidated statement of income.22. SHORT-TERM BORROWINGSOn June 28, 2020, the Company had entered into a credit facility of SAR 400 million with Riyad Bank for SIBOR 3 months + 0.65% for a period of 360 days for its operations. During the year, the Company has settled the amount of SAR 400 million in full however, this credit facility is still subject to annual renewal.2021 2020SAR’000January 1 401,998 -Borrowing obtained during the year - 400,000 Finance cost accrued during the year 3,748 1,998Repayment during the year (405,746) -December 31 - 401,99824. INSURANCE SHARE DISTRIBUTION (i) Manafeth shared agreement:On January 13, 2015 the Company, together with 25 other insurance companies, signed the Manafeth shared agreement relating to third party liability motor insurance which is effective from January 1, 2015. The agreement relates to motor insurance for vehicles entering the Kingdom of Saudi Arabia. The agreement was subsequently renewed for two years from January 1, 2019 to December 31, 2020 with 25 other insurance companies.The main terms of the 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 shared equally by the Company and other insurers.Effective from January 1, 2021, in accordance with a new shared agreement signed together with 3 other insurance companies and Najm Insurance Services “Najm”, Najm would be in charge of managing the Manafeth (Outpost Offices) and will be acting as an agent on behalf of the insurers in the agreement. The purpose of this restructuring is to handle the sale of insurance policies for the foreign vehicles entering or crossing the borders of the Kingdom of Saudi Arabia, on behalf of the participating insurance companies. Najm will be sharing the insurance policies equally with the participating insurance companies and the accounting of premiums and related claims cost will be recorded separately by each of the participating insurance companies in their respective financial statements. (ii) Umrah shared agreement:On January 1, 2020 the Company, together with 28 other insurance companies, signed the Umrah shared agreement relating to medical and general accidents insurance which is effective from January 1, 2020. The agreement relates to insurance of pilgrims who enter the Kingdom of Saudi Arabia.The main terms of the 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 through 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 shared equally by the Company and other insurers.(iii) Travel and COVID-19 shared agreement:On April 6, 2021 the Company, together with 12 other insurance companies, signed the Travel and COVID-19 shared agreement relating to compulsory travel insurance in addition to coverages related to COVID-19 which is effective from April 6, 2021. The agreement relates to insurance of citizens traveling abroad.The main terms of the agreement are as follows:- The Company obtains 2.5% management fee of Travel and COVID-19 gross premiums written; and- The Company obtains 30% of net result of Travel & COVID-19 portfolio after deducting the above mentioned item and the remaining is shared equally with other insurers.35. REALIZED GAINS ON FINANCIAL ASSETS, NET2021 2020SAR'000INSURANCE OPERATIONS Realized gain on available-for-sale financial assets 58,559 52,336 Realized gain on financial assets, net 58,559 52,336 SHAREHOLDERS OPERATIONS Realized gain on available-for-sale financial assets 83,398 1,774 Realized gain on financial assets, net 83,398 1,774 37. DUE FROM SHAREHOLDERS/ DUE TO INSURANCE OPERATIONSDuring the year, shareholders have absorbed 90% of surplus from insurance operations amounting to SAR 201 million resulting in due from insurance operation balance as at December 31, 2021 amounting to SAR 227 million. | 5, 22, 24, 35, 37 |
