| 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. ORGANIZATION AND PRINCIPAL ACTIVITIESThe Mediterranean and Gulf Cooperative Insurance and Reinsurance Company (the “Company”) is a Saudi Joint Stock Company registered in the Kingdom of Saudi Arabia under Commercial Registration No. 1010231925 dated 8 Rabi Thani 1428H (corresponding to 26 April 2007). The registered address of the Company's head office is as follows: Medgulf Insurance Futuro Tower King Saud Road P.O. Box 2302 Riyadh 11451, Saudi ArabiaThe objectives of the Company are to transact cooperative insurance and reinsurance business and related activities in the Kingdom of Saudi Arabia. Its principal lines of business include medical, motor and other general insurance. The Company was listed on the Saudi Arabian Stock Exchange (Tadawul) on 28 Rabi Al-Awal 1428H (corresponding to 16 April 2007). | |
| Disclosure of basis of preparation of financial statements [text block] | 2. BASIS OF PREPARATION (a) Basis of presentationThe interim condensed financial information has been prepared under the going concern basis on a historical cost basis except for the measurement at fair value of available for sale investments and end of service benefits of present value.The Company’s interim condensed statement of financial position is not presented using a current/non-current classification. The following balances would generally be classified as non-current: available for sale investments, property and equipment, land, intangible assets, statutory deposit, investment in an associate, accrued commission on statutory deposit, good will and employees end of service benefits. All other assets and liabilities are classified as current.Statement of complianceThe interim condensed financial information of the Company ("Company") has been prepared in accordance with International Accounting Standard 34 - Interim Financial Reporting ("IAS 34") as endorsed in the Kingdom of Saudi Arabia The financial statements of the Company as at and for the period and year ended 31 March 2019 and 31 December 2018, respectively, were prepared in compliance with the IAS 34 and the International Financial Reporting Standards (“IFRS”) respectively, ) as modified by Saudi Arabian Monetary Authority (SAMA) for the accounting of zakat and income tax, which requires, adoption of all IFRSs as issued by the International Accounting Standards Board (“IASB”) except for the application of International Accounting Standard (IAS) 12 - “Income Taxes” and IFRIC 21 - “Levies” so far as these relate to zakat and income tax.During July 2019, SAMA instructed the Insurance Companies in the Kingdom of Saudi Arabia to account for the zakat and income taxes in the statement of income. This aligns with the IFRS and its interpretations as issued by the International Accounting Standards Board (“IASB”) and as endorsed in the Kingdom of Saudi Arabia by the Saudi Organization for Certified Public Accountants (“SOCPA”).Accordingly, the Company changed its accounting treatment for zakat and income tax by retrospectively adjusting the impact in line with International Accounting Standard 8 Accounting Policies, Changes in Accounting Estimates and Errors (as disclosed in note 4) and the effects of this change are disclosed in note 4 to the interim condensed financial statements).As required by Saudi Arabian insurance regulations, the Company maintains separate accounts for Insurance Operations and Shareholders’ Operations and presents the interim condensed financial information accordingly (refer note 21). The physical custody of all assets related to the Insurance Operations and Shareholders’ Operations are held by the Company. Revenues and expenses clearly attributable to either activity are recorded in the respective accounts. The basis of allocation of other revenue and expenses from joint operations is as determined by the management and Board of Directors.Functional and presentation currencyThe functional and presentational currency of the Company is Saudi Arabian Riyals. The interim condensed financial information is presented in Saudi Riyal rounded to nearest thousand (SAR’000) unless otherwise stated.2. BASIS OF PREPARATION (Continued)Surplus distribution The Company is required to distribute 10% of the net surplus from insurance operations to policyholders and the remaining 90% to be allocated to the shareholders of the Company in accordance with the Insurance Law and Implementation Regulations issued by the Saudi Arabian Monetary Authority (“SAMA”). In case of losses, losses are absorbed by shareholders.The insurance operations' surplus for the six month period ended 30 June 2019 amounted to SR 5,886 thousand (30 June 2018: deficit of SR 33,271 thousand). Accordingly, 90% of the insurance operations' surplus amounting to SR 5,297 thousand was transferred to shareholders’ operations for the period, leaving a surplus payable to policyholders of SR 589 thousand (30 June 2018: the full amount of SR 33,271 thousand was transfer to shareholders because of the deficit).The interim condensed statement of financial position, statements of income, comprehensive income and cash flows of the insurance operations and shareholders’ operations which are presented in note 21 of the interim condensed financial information have been provided as supplementary financial information to comply with the requirements of the guidelines issued by SAMA implementing regulations. SAMA implementing regulations requires the clear segregation of the assets, liabilities, income and expenses of the insurance operations and the shareholders’ operations. Accordingly, the interim condensed statements of financial position, statements of income, comprehensive income and cash flows prepared for the insurance operations and shareholders operations as referred to above, reflect only the assets, liabilities, income, expenses and comprehensive gains or losses of the respective operations.In preparing the Company-level financial information in compliance with IFRS, the balances and transactions of the insurance operations are amalgamated and combined with those of the shareholders’ operations. Interoperation balances, transactions and unrealised gains or losses, if any, are eliminated in full during amalgamation. The accounting policies adopted for the insurance operations and shareholders’ operations are uniform for like transactions and events in similar circumstances.The accompanying interim condensed financial information do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Company’s annual financial statements as of and for the year ended 31 December 2018.In management’s opinion, the interim condensed financial information reflect all adjustments (which include normal recurring adjustments) necessary to present fairly the results of operations for the interim periods presented. The interim results may not be indicative of the Company’s annual results.(b) Critical accounting judgments, estimates and assumptionThe preparation of interim condensed financial information requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.Estimates and judgments are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.In preparing this condensed financial information, the significant judgments made by management in applying the Company`s accounting policies and the key sources of estimation uncertainty including the risk management policies were the same as those that applied to the annual financial statement as at and for the year ended 31 December 2018.(c) Seasonality of operationThere are no seasonal changes that may affect insurance operations of the Company.Going concernDue to the continuous decline in the financial performance of the Company, the Company did not meet the solvency margin requirements as at 31 December 2017 and consequently SAMA issued a letter number 391000054425 dated 29 January 2018, preventing the Company from writing any new policies and renewing the existing policies. SAMA, in its aforesaid letter, also instructed the Company to increase its share capital before 30 July 2018 to address the issue of its deteriorating solvency margin. The Company’s Board of Directors in their meeting held on 6 February 2018, recommended a rights issue amounting to SAR 400 million in order to improve the solvency margin and the Company’s future business activities. Such right issue was subject to approval of the regulatory authorities and general assembly of the Company. SAMA issued a letter dated 15 April 2018 allowing the Company to write new policies and renewing the existing policies starting from 17 April 2018 subject to certain conditions. The aforesaid conditions amongst others include, the Company’s commitment to increase its share capital before 31 October 2018. In addition SAMA instructed the Company to take necessary steps for continuous recovery of Company’s receivables, implementation of best governance practices by the Board of Directors and the executive management and submit weekly progress report on the measures taken by the management in this regard and intimated that in case of non-compliance of the above, SAMA will take necessary actions as required by the law. 2. BASIS OF PREPARATION (Continued)Going concern (Continued)Further, during the period ended 30 June 2018, the Company submitted its request to Capital Market Authority to proceed with the rights issue on 28 June 2018 and subsequently in the period ended 30 September 2018 Company obtained CMA approval to issue right shares as at 15 August 2018. The shareholders of the Company has approved the issue of right shares as at 10 September 2018. Subsequently, on 17 October 2018 Company has successfully right SR 400 million right shares.Management has performed an assessment of its going concern assumption under different scenarios. Based on the underlying cash flow projections under such scenarios, management believes that the Company will be able to continue the business and meet its obligations as and when they fall due over the next 12 months. As a result, the interim condensed financial information have been prepared on a going concern basis. Management`s assessment is based on number of estimates and assumptions including significant recoveries from major policyholders, reinsurers and related parties and other cost saving measures | |
| Disclosure of accounting framework used in preparation of financial statements [text block] | 3. SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS The preparation of the interim condensed financial information requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the reporting date. However, uncertainty about these estimates and assumptions could result in an outcome that could require a material adjustment to the carrying amount of the asset or liability affected in the future.The key assumptions concerning the future and other key sources of estimation uncertainty at the date of interim statement of financial position, that have a significant risk of causing a material adjustment to the carrying amounts of the assets and liabilities within the next financial period are discussed below.(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 and involves a significant degree of judgment. There are several sources of uncertainty that needed to be considered in estimating the liability that the Company will ultimately pay for such claims. 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 interim statement of financial position, for which the insured event has occurred prior to the date of interim 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 liabilities are based on the best-estimate of ultimate cost of all claims incurred but not settled at a given date, whether reported or not, together with the related claims handling costs. 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. Underlying these methods are a number of explicit or implicit assumptions relating to the expected settlement amount and settlement patterns of claims.The Company is exposed to disputes with, and possibility of defaults by, its reinsurers. The Company monitors on a quarterly basis the evolution of disputes with and the strength of its reinsurers. (ii) Premium deficiency reserveEstimation of the premium deficiency for medical and motor business is highly sensitive to a number of assumptions as to the future events and conditions. It is based on an expected loss ratio for the unexpired portion of the risks for written policies. To arrive at the estimate of the expected loss ratio, the actuary looks at the claims and premiums relationship which is expected to realize in the future.iii) Impairment losses on receivablesThe Company assesses receivables that are individually significant and receivables included in a group of financial assets with similar credit risk characteristics for impairment. Receivables that are individually assessed for impairment and for which an impairment loss is or continues to be recognised are not included in a collective assessment of impairment. This assessment of impairment requires judgment. In making this judgment, the Company evaluates credit risk characteristics that consider past-due status being indicative of the ability to pay all amounts due as per contractual terms. iv) GoodwillImpairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. Management believes that fair value less cost to sell analysis and value in use provides a higher value compared value of goodwill recorded in the books of accounts, and therefore, fair value less cost to sell analyses are used for impairment assessments. The fair value less cost to sell calculation is based on the quoted share price of the Company as of period close and subsequent events that occurred till measurement date. v) ReinsuranceThe Company accounts for its reinsurance transactions based on their understanding of the contractual terms of the reinsurance treaties. | |
| Disclosure of new standards and amendments in standards [text block] | 4. CHANGE IN ACCOUNTING POLICIESThe accounting policies and risk management policy used in the preparation of the interim condensed financial statement are consistent with those followed in the preparation of the Company’s annual financial statements for the year ended 31 December 2018, except as explained below:Standards issued and effectiveStandard/Interpretation Description Effective date IFRS 16 Leases 1 January 2019 IFRS 16 ‘Leases’ replaces IAS 17 ‘Leases’ along with three Interpretations (IFRIC 4 ‘Determining whether an Arrangement contains a Lease’, SIC 15 ‘Operating Leases-Incentives’ and SIC 27‘Evaluating the Substance of Transactions Involving the Legal Form of a Lease’). The new Standard has been applied using the modified retrospective approach, with the cumulative effect of adopting IFRS 16 being recognised in equity as an adjustment to the opening balance of retained earnings for the current period. Prior periods have not been restated. For contracts in place at the date of initial application, the Company has elected to apply the definition of a lease from IAS 17 and IFRIC 4 and has not applied IFRS 16 to arrangements that were previously not identified as lease under IAS 17 and IFRIC 4. The Company has elected not to include initial direct costs in the measurement of the right-of-use asset for operating leases in existence at the date of initial application of IFRS 16, being 1 January 2019. At this date, the Company has also elected to measure the right-of-use assets at an amount equal to the lease liability adjusted for any prepaid or accrued lease payments that existed at the date of transition. Instead of performing an impairment review on the right-of-use assets at the date of initial application, the Company has relied on its historic assessment as to whether leases were onerous immediately before the date of initial application of IFRS 16. On transition, for leases previously accounted for as operating leases with a remaining lease term of less than 12 months and for leases of low-value assets the Company has applied the optional exemptions to not recognise right-of-use assets but to account for the lease expense on a straight line basis over the remaining lease term. For those leases previously classified as finance leases, the right-of-use asset and lease liability are measured at the date of initial application at the same amounts as under IAS 17 immediately before the date of initial application. On transition to IFRS 16 the weighted average incremental borrowing rate applied to lease liabilities recognised under IFRS 16 was 4%. The Company has benefited from the use of hindsight for determining lease term when considering options to extend and terminate leases. The following is a reconciliation of total operating lease commitments at 31 December 2018 to the lease liabilities recognised at 1 January 2019: SAR’000Total operating lease commitments as at 31 December 2018 27,116Discounted using the lessee's incremental borrowing rate at date of initial application (2,620) Total lease liabilities recognised under IFRS 16 at 1 January 2019 24,496New IFRS, International Financial Reporting and Interpretations Committee’s interpretations (IFRIC) and amendments thereof, adopted by the Company The Company has adopted the following amendments and revisions to existing standards, which were issued by the International Accounting Standards Board (IASB):Standards issued but not yet effectiveIFRS 9, Financial Instruments (including amendments to IFRS 4, Insurance Contracts) In July 2014, the IASB published IFRS 9 Financial Instruments which will replace IAS 39 Financial Instruments: Recognition and Measurement. The standard incorporates new classification and measurements requirements for financial assets, the introduction of an expected credit loss impairment model which will replace the incurred loss model of IAS 39, and new hedge accounting requirements. Under IFRS 9, all financial assets will be measured at either amortised cost or fair value. The basis of classification will depend on the business model and the contractual cash flow characteristics of the financial assets. The standard retains most of IAS 39’s requirements for financial liabilities except for those designated at fair value through profit or loss whereby that part of the fair value changes attributable to own credit is to be recognised in other comprehensive income instead of the income statement. The hedge accounting requirements are more closely aligned with risk management practices and follow a more principle based approach. 4. CHANGE IN ACCOUNTING POLICIES (Continued)In September 2016, the IASB published amendments to IFRS 4 Insurance Contracts that address the accounting consequences of the application of IFRS 9 to insurers prior to the publication of the forthcoming accounting standard for insurance contracts. The amendments introduce two options for insurers: the deferral approach and the overlay approach. The deferral approach provides an entity, if eligible, with a temporary exemption from applying IFRS 9 until the earlier of the effective date of a new insurance contract standard or 2021 which was further delay for 1 year. The overlay approach allows an entity to remove from profit or loss the effects of some of the accounting mismatches that may occur before the new insurance contracts standard is applied.The Company is eligible and have chosen to apply the deferral approach under the amendments to IFRS 4. The impact of the adoption of IFRS 9 on the Company’s financial statement will, to a large extent, have to take into account the interaction with the forthcoming insurance contracts standard. As such, it is not possible to fully assess the effect that may occur before the new insurance contracts standard is applied.IFRS 17 - “Insurance Contracts”, applicable for the period beginning on or after 1 January 2022, and will supersede IFRS 4 “Insurance Contracts”. Earlier adoption permitted if both IFRS 15 'Revenue from Contracts with Customers' and IFRS 9 'Financial Instruments' have also been applied. The Company expects a material impact on measurement and disclosure of insurance and reinsurance that will affect both the income statement and the balance sheet. The Company has decided not to early adopt this new standard.Change in the accounting for zakat and income tax:As mentioned above, the basis of preparation has been changed for the period ended 30 June 2019 as a result of the issuance of latest instructions from SAMA. Previously, zakat and income tax were recognized in the statement of changes in equity as per the SAMA circular no 381000074519 dated April 11, 2017 and subsequent amendments through certain clarifications relating to the accounting for zakat and income tax (“SAMA Circular”). With the latest instructions issued by SAMA, the zakat and income tax shall be recognized in the statement of income. The Company has accounted for this change in the accounting for zakat and income tax retrospectively and the effects of the above change are disclosed in note 18 to the interim condensed financial statements. The change has resulted in restatement of reported income of the Company for the period ended 30 June 2018 by SR 2.930 million. The change has had no impact on the statement of cash flows for the period ended 30 June 2018.Accounting Policy:Income tax:The income tax expense or credit for the period is the tax payable on the current period’s taxableincome, based on the applicable income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the company and its subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions, where appropriate, on the basis of amounts expected to be paid to the tax authorities.Adjustments arising from the final income tax assessments are recorded in the period in which such assessments are made. The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate adjusted for the changes in deferred tax assets and liabilities attributable to the temporary differences and to the unused tax losses. IFRIC Interpretation 23 Uncertainty over Income Tax Treatment The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of IAS 12 Income Taxes. It does not apply to taxes or levies outside the scope of IAS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The Interpretation specifically addresses the following: Whether an entity considers uncertain tax treatments separately The assumptions an entity makes about the examination of tax treatments by taxation authorities How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates How an entity considers changes in facts and circumstances 4. CHANGE IN ACCOUNTING POLICIES (Continued)An entity has to determine whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments. The approach that better predicts the resolution of the uncertainty needs to be followed. The Company applies significant judgement in identifying uncertainties over income tax treatments. Deferred income tax:Deferred income tax is provided using the liability method on temporary differences arising between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for the taxation purposes. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amounts of assets and liabilities using the tax rates enacted or substantively enacted at the reporting date. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available and the credits can be utilized. Deferred tax asset is reduced to the extent that it is no longer probable that the related tax benefits will be realized. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognisedZakat:The Company is subject to Zakat in accordance with the regulations of the General Authority of Zakat and Income Tax (“GAZT”). Zakat expense is charged to the profit or loss. Zakat is not accounted for as income tax and as such no deferred tax is calculated relating to zakat. | |
| Disclosure of summary of significant accounting policies [abstract] | | |
| Description of accounting policy for statutory reserve [text block] | 17. STATUTORY RESERVE In accordance with its By-laws, the Company shall allocate 20% of its net income 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. Since there was accumulated deficit for the period ended 30 June 2019 and year ended 31 December 2018, no transfer was made to statutory reserve. | |
| Description of accounting policy for zakat [text block] | 19. COMMITMENTS AND CONTINGENCIES a) Legal proceedings The Company operates in the insurance industry and is subject to legal proceedings in the normal course of business. While it is not practicable to forecast or determine the final results of all pending or threatened legal proceedings, management does not believe that such proceedings (including litigations) will have a material effect on its results and financial position.b) Operating lease commitments The minimum future lease payments for the use of the Company office premises are as follows: SR’000 30 June 2019 (Unaudited) 31 December 2018 (Audited)Less than one year - -One to five years 6,611 16,057 6,611 16,057c) Contingencies and capital commitments As at 30 June 2019, the Company’s banker has issued letters of guarantee of SR 74,233 thousand (31 December 2018: SR 64,957 thousand) to various customers, motor agencies and workshops as per the terms of the agreements with them. The Company had no capital commitments during the period ended 30 June 2019 (31 December 2018: nil). | |
| Description of accounting policy for time (murabaha) deposit [text block] | 6. SHORT TERM DEPOSITSShort’ term deposits are placed with counterparties that have credit ratings equivalent to A+ to BBB+ ratings under Standard and Poor's, Fitch and Moody’s ratings methodology.Short term deposits are placed with local and licensed foreign banks’ branches in Kingdom of Saudi Arabia with a maturity of more than three months from the date of original acquisition and earned special commission income at an average rate of 1.36% per annum (2018: nil).The company does not have any short term deposit as at 31 December 2018. | |
| Description of accounting policy for statutory deposit [text block] | 12. STATUTORY DEPOSITIn accordance with the Law on Supervision of Cooperative Insurance Companies in the Kingdom of Saudi Arabia. The Company is required to maintain a statutory deposit at 10%. Further, SAMA has increased the statutory deposit by 5%, and accordingly, the Company has transferred the same to arrive at 15% statutory deposit. This statutory deposit cannot be withdrawn without the consent of SAMA. During the year 2018, the company increased its paid capital to SR 800 million by right issue shares. After the aforementioned amendments to the capital, the statutory deposit is currently maintained at 15% of the new paid up capital, SR 800 million, amounting to SR 120 million. The Statutory deposit is placed at the commission rate of 3.4% per Anum (31 December 2018: 2.05%) | |
| Disclosure of notes forming part of accounts [abstract] | | |
| Disclosure of investments in associates and joint ventures [text block] | 10. INVESTMENT IN AN ASSOCIATEInvestment in an associate comprises of an equity investment in Al-Waseel for Electronic Transportation amounting to SR 7,659 thousand (a 25% equity interest) (31 December 2018: SR 9,872), in an unquoted company (the “associate”), registered in the Kingdom of Saudi Arabia.Movement in investment in an associate is as follows: SAR’000 30 June 2019 (Unaudited) 31 December 2018 (Audited) 01 January 2018(Audited)At the beginning of the period / year 9,872 9,341 14,802Dividend received from investment in an associate (4,896) (4,486) (8,082)Change in investment in an associate 2,682 5,017 2,621At the end of the period / year 7,658 9,872 9,341Al-Waseel for Electronic Transportation SAR’000 As of date Country of Incorporation Assets Liabilities Revenue Profit % Interest Held31/03/2019 Saudi Arabia 65,913 15,695 38,590 9,525 25% | |
| Disclosure of investments in available-for-sale investments [text block] | 8. AVAILABLE FOR SALE INVESTMENTS Available for sale investments are classified as set out below: SAR’000 Insurance operations 30 June 2019 (Unaudited) 31 December 2018 (Audited) 01 January 2018(Audited) Mutual funds - - 3,358Sukuk - 25,000 25,000 - 25,000 28,3588. AVAILABLE FOR SALE INVESTMENTS (Continued) SAR’000 Shareholders’ operations 30 June 2019 (Unaudited) 31 December 2018 (Audited) 01 January 2018(Audited)Mutual funds - - 55,524Bond 37,567 47,228 47,571Sukuk 248,355 - 20,000Equities 1,923 1,923 1,923 287,845 49,151 125,018 Total 287,845 74,151 153,376Movement in available for sale investments balance is as follows: SAR’000 Insurance operations 30 June 2019 (Unaudited) 31 December 2018 (Audited) 01 January 2018(Audited)At the beginning of the period / year 25,000 28,358 28,308Sold during the period / year (25,000) (3,379) - - 24,979 28,308Net change in fair values - 21 50 At the end of the period / year - 25,000 28,358The cumulative change in fair values of available for sale investments for insurance operations amounting to nil (31 December 2018: SR 327 thousand) is presented within insurance operations’ surplus’ in the statement of financial position. The realised gain is transferred to interim statement of income under special commission income. SAR’000 Shareholders’ operations 30 June 2019 (Unaudited) 31 December 2018 (Audited) 01 January 2018(Audited)At the beginning of the period / year 49,151 125,018 146,076Purchase during the period 233,736 - -Sold during the period / year - (75,665) (21,000) 282,887 49,353 125,076Net change in fair values 4,958 (202) (58) At the end of the period / year 287,845 49,151 125,018The cumulative change in fair values of available for sale investments for shareholders’ operations amounting to SR 4,958 thousand (31 December 2018: SR (442) thousand) is presented within shareholders’ equity in the statement of financial position.Fair valueFair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or the most advantageous) market between market participants at the measurement date under current market conditions regardless of whether that price is directly observable or estimated using another valuation technique. The fair values of recognised financial instruments are not significantly different from the carrying values included in the interim condensed financial information. The estimated fair values of financial instruments are based on quoted market prices, when available. The fair values of these investments are disclosed below.For financial instruments that are recognised at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level of input that is significant to the fair value measurement as a whole) at the end of each reporting period.The unlisted security of SR1.92 million (31 December 2018: SR 1.92 million) held as part of Company’s shareholder operations, were stated at cost in the absence of active markets or other means of reliably measuring their fair value.During the period ended 30 June 2019, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfers into or out of level 3 fair value measurements.8. AVAILABLE FOR SALE INVESTMENTS (Continued)Fair value (continued)The following table shows an analysis of financial instruments recorded at fair value by level of the fair value hierarchy cumulatively for insurance and shareholders operations: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. SR’000 31 December 2018 (Audited) Insurance operations – Fair Value Level 1 Level 2 Level 3 Total Available for sale investments Sukuk - 25,000 - 25,000Total available for sale investments - 25,000 - 25,000 SR’000 01 January 2018 (Audited) Insurance operations – Fair Value Level 1 Level 2 Level 3 Total Available for sale investments Mutual funds 3,358 - - 3,358Sukuk - 25,000 - 25,000Total available for sale investments 3,358 25,000 - 28,358 SR’000 Shareholders’ operations – Fair Value 30 June 2019 (Unaudited) Level 1 Level 2 Level 3 Total Available for sale investments Mutual funds - - - -Bonds - 37,567 - 37,567Sukuk - 248,355 - 248,355Equities - - 1,923 1,923Total available for sale investments - 285,922 1,923 287,845 SR’000 Shareholders’ operations – Fair Value 31 December 2018 (Audited) Level 1 Level 2 Level 3 Total Available for sale investments Bonds - 37,228 - 37,228Sukuk - 10,000 - 10,000Equities - - 1,923 1,923Total available for sale investments - 47,228 1,923 49,1418. AVAILABLE FOR SALE INVESTMENTS (Continued)Fair value (continued) SR’000 Shareholders’ operations – Fair Value 01 January 2018 (Audited) Level 1 Level 2 Level 3 Total Available for sale investments Mutual funds 55,524 - - 55,524Bonds 9,998 37,573 - 47,571Sukuk - 20,000 - 20,000Equities - - 1,923 1,923Total available for sale investments 65,522 57,573 1,923 125,018 | |
| Disclosure of premiums/ contributions and insurance/ reinsurance or takaful/ retakaful balance receivables [text block] | . PREMIUIMS AND REINSURERS` RECEIVABLE - NETReceivables comprise amounts due from the following: SR’000 30 June 2019 (Unaudited) 31 December 2018 (Audited) 01 January 2018(Audited) Policyholders 465,341 450,663 518,982Brokers and agents 310,267 419,703 349,996Premiums receivables 775,608 870,366 868,978Less: Allowance for doubtful debts (289,301) (313,582) (290,942) 486,307 556,784 578,036 Reinsurers’ receivable 283,951 339,354 302,568Less: Allowance for doubtful debts (218,820) (215,060) (221,499) 65,131 124,294 81,069 Premium and reinsurers’ receivable – net 551,438 681,078 659,105As at 30 June 2019, the movement for provision for doubtful debts of premiums and reinsurers’ receivable was as follows: SR’000 30 June 2019 (Unaudited) 31 December 2018 (Audited) 01 January 2018(Audited) Balance at the beginning of the period 528,642 512,441 219,571(Reversal) / provision for the period / year (20,521) 27,074 292,870Write off during the period - (10,873) -Ending balance 508,121 528,642 512,441As disclosed in note 11, the Company, together with CRC, have now initiated an exercise to separate the Company’s transactions and balances with the respective reinsurers and brokers from those of other related parties. This exercise is still on-going and on completion certain parties included above in reinsurance balances receivable amounting to Saudi Riyals 115.3 million may be identified as receivable from related parties and therefore may need to be disclosed under due from related parties in note 11. | |
| Disclosure of cash and cash equivalents [text block] | 5. CASH AND CASH EQUIVALENTS SAR’000 Insurance operations 30 June 2019 (Unaudited) 31 December 2018 (Audited) 01 January 2018 (Audited) Cash and bank balances 206,364 208,789 97,035Deposits maturing within 3 months from the acquisition date 484,226 438,500 251,749Cash and cash equivalent in the statement of cash flows 690,590 647,289 348,784 Deposit against letter of guarantee 74,233 64,957 29,565 764,823 712,246 378,349 SAR’000 Shareholders’ operations 30 June 2019 (Unaudited) 31 December 2018 (Audited) 01 January 2018(Audited) Cash and bank balances 61,889 6,314 5,176Deposits maturing within 3 months from the acquisition date - 403,869 - 61,889 410,183 5,176 Cash and cash equivalent in the statement of cash flows 752,479 1,057,472 353,960Cash and bank balances 826,712 1,122,429 383,525Cash at banks and short-term deposits are placed with counterparties who have credit ratings equivalent to A+ to BBB ratings under Standard and Poor's, Fitch and Moody’s ratings methodology. Short-term deposits are placed with local and licensed foreign banks’ branches in Kingdom of Saudi Arabia with an original maturity of less than three months from the date of acquisition and earned special commission income at an average rate of 2.47% per annum (2018: 3.22% per annum). The carrying amounts disclosed above reasonably approximate the fair value at the statement of financial position date.Deposits against letters of guarantee comprise amounts placed with a local bank against issuance of payment guarantees in favour of the Company’s customers and service providers. Such deposits against letters of guarantee cannot be withdrawn before the expiration of guarantee (are restricted in nature). | |
| Disclosure of classes of share capital [text block] | 15. SHARE CAPITALThe authorized and paid up share capital of the Company was SR 1,000 million divided into 100 million shares of SR 10 each. The founding shareholders of the Company have subscribed and paid for 75 million shares (SR 750 million) with a nominal value of SR 10 each, which represent 75% of the shares of the Company and the remaining 25 million shares (SR 250 million) with a nominal value of SR 10 each which represent 25% of the shares of the Company, was subscribed by the general public. The Share capital represents foreign shareholders by 45.5% and Saudi shareholders by 54.5% as at the period end. The Company in its extra ordinary general meeting held on 22 September 2017 approved the reduction of share capital from Saudi Riyals 1 billion to Saudi Riyals 400 million by reducing the number of shares from 100 million to 40 million shares of SR 10 each to comply with the requirements of the Regulations for Companies. This resulted in accumulated losses to decline below one-half of Company’s share capital. The reduction of capital was approved by the regulatory authorities. During 2017, the Company incurred transaction cost of SR 691 thousand in respect of reduction in share capital, which has been charged directly to the Statement of changes in Shareholders' Equity.During the year-end 31 December 2018, the Company’s Board of Directors in their meeting held on 6 February 2018, recommended a rights issue amounting to SAR 400 million. Such rights issue has been approved by the regulatory authorities and general assembly of the Company and the current paid up capital of the company is SR 800 million. The Company incurred transaction cost of SR 9,677 thousand in respect to the increase in share capital, which has been charged directly to the Statement of changes in Shareholders' Equity. 30 June 2019 (Unaudited) 31 December 2018 (Audited) SR’000 SR’000 No. of shares Authorized and issued Paid up No. of shares Authorized and issued Paid upFounding shareholders 60,000 600,000 600,000 60,000 600,000 600,000General public 20,000 200,000 200,000 20,000 200,000 200,000 80,000 800,000 800,000 80,000 800,000 800,000 | |
| Disclosure of retained earnings (accumulated losses) [text block] | 14. BASIC AND DILUTED EARNINGS / (LOSSES) PER SHAREBasic and diluted earnings per share been calculated by dividing the net Income / (loss) after zakat and income tax for the period by the weighted average number of shares outstanding as of the reporting date amounting to 80 million shares SR’000 30 June 2019 (Unaudited) 30 June 2018 (Unaudited) Income / (Loss) for the year after zakat and income tax 3,791 (34,838)Weighted average number of ordinary shares 80,000 80,000Loss per share 0.05 (0.74) | |
| Disclosure of technical reserve for insurance/takaful/reinsurance/retakaful operations [text block] | 9. TECHNICAL RESERVESa) Net outstanding claims and reservesNet outstanding claims and reserves comprise of the following: SAR’000 30 June 2019 (Unaudited) 31 December 2018 (Audited) 01 January 2018(Audited) Outstanding claims 455,021 325,214 499,938Claims incurred but not reported 777,278 624,910 594,499Premium deficiency reserve 26,761 51,052 15,700Other technical reserves 15,017 9,759 10,596 1,274,077 1,010,935 1,120,733 Less: Reinsurers’ share of outstanding claims 322,655 294,162 366,647Reinsurers’ share of claims Incurred but not reported 203,643 126,644 114,493 526,298 420,806 481,140 Net outstanding claims and reserves 747,779 590,129 639,593b) Movement in unearned premiumsMovement in unearned premiums comprise of the following: SAR’000 Six month period ended 30 June 2019 (Unaudited) Gross Reinsurance NetBalance as at the beginning of the period 1,236,849 (282,901) 953,948Premium written during the period 1,367,701 (455,159) 912,542Premium earned during the period (1,356,597) 293,175 (1,063,422)Balance as at the end of the period 1,247,953 (444,885) 803,068 Year ended 31 December 2018 (Audited)Balance as at the beginning of the year 1,405,228 (464,063) 941,165Premium written during the year 2,069,473 (266,003) 1,803,470Premium earned during the year (2,237,852) 447,165 (1,790,687)Balance as at the end of the year 1,236,849 (282,901) 953,948 01 January 2018 (Audited)Balance as at the beginning of the year 1,629,251 (536,383) 1,092,868Premium written during the year 2,665,838 (494,679) 2,171,159Premium earned during the year (2,889,861) 566,999 (2,322,862)Balance as at the end of the year 1,405,228 (464,063) 941,165 | |
| Disclosure of related party transactions [text block] | 11. TRANSACTIONS AND BALANCES WITH RELATED PARTIESRelated parties Nature of transaction Amount of transaction for the period / year end Balance SR’000 30 June 2019 30 June 2018 30 June 2019 31 December 2018 01 January 2018 Unaudited Unaudited Unaudited Audited AuditedDue from a related party Medgulf BSC - Head office account (major shareholder) -Claims recoveries on behalf of major shareholder - - - - -Balance due from at year end - - 2,453 2,453 2,453 -Allowance for doubtful debts - - (2,390) (2,390) (2,390) -Net balance due from at year end - - 63 63 63Total due from related party 63 63 63Due to a related party Medivisa KSA (affiliate) -Insurance premium for employees of fellow subsidiary 2,916 2,868 - - - -Third party administration fees 27,914 15,261 - - - -Claim incurred 77 60 - - - -Payment received - 2 - - - -Premium refundable 138 192 - - - -Payment on third party administration fees 30,502 14,137 - - - -Balance due to at period / year end - - 12,311 17,600 3,886 Total due to related party 12,311 17,600 3,88611. TRANSACTIONS AND BALANCES WITH RELATED PARTIES (Continued)Related parties Nature of transaction Amount of transaction for the period / year end Balance SR’000 30 June 2019 30 June 2018 30 June 2019 31 December 2018 Unaudited Unaudited Unaudited AuditedOther related parties transactions and balances – due from / (due to) The Saudi Investment Bank, (Founding shareholder) -Current account and time deposits (29,127) (9) 6,323 35,450 -Statutory deposit (refer note 11.a (i)) 2,365 - 141,872 139,507 -Gross written premiums 519 (127) - - -Premiums (refundable) - - (382) (1,016) -Claims incurred / adjustment 92 - - - -Outstanding claims - - (1,432) (580)Medivisa KSA (affiliate) -Medical claim Jordan / balance 107 598 699 570 -Medical claim Lebanon / balance (345) 149 764 1,109 -Medical claim Egypt / balance 28 12 188 160Al Istithmar Capital (subsidiary of SIB-founding shareholder) -Discretionary portfolio arrangement (refer 11.a (ii)) - 142 - - -Current account 1,170 685 2,375 1,205 -Premiums refundable - - - (38)Batic Investments and Logistics Co (Under common directorship) -Gross written premiums - 24 - - -Premiums receivable - - 24 24 -Allowance for doubtful debts - - (18) (18) -Net Balance receivable period / year end - - 6 6 -Claims incurred (28) 318 - -Mohammed Saad Dawood (Under common directorship) -Gross written premiums - 1 - - -Premiums receivable - - 1 1Bayan Credit Bureau (Under common directorship) -Gross written premiums 32 29 - - -Premiums receivable - - (12) (38) -Claims incurred (213) (114) - - -Outstanding claims - - (6) -11. TRANSACTIONS AND BALANCES WITH RELATED PARTIES (Continued)Related parties Nature of transaction Amount of transaction for the period / year end Balance SR’000 30 June 2019 30 June 2018 30 June 2019 31 December 2018 Unaudited Unaudited Unaudited AuditedOther related parties transactions and balances – due from / (due to) Medgulf BSC (major shareholder) -Claim recoveries - 7 - - -Reinsurance recovery (refer 11.a(iii)) - - 5,962 5,962 -Allowance for doubtful debts - - (4,471) (4,471) -Net balance receivable at period / year end - - 1,491 1,491 Addison Bradley Overseas / Addison Bradley & Co. (ABO) (affiliate) -Balance receivable at year end - - 3,856 3,856 -Allowance for doubtful debts - - (3,856) (3,856) -Net balance due from at period / year end - - - -Saudi Fransi Capital (Under common directorship) -Gross written premiums - 3,746 - - -Premium receivable - - (13) 253 -Allowance for doubtful debts - - - (66) -Net balance receivable at period / year end - - (13) 187 -Claims incurred (1,009) (1,424) - - -Outstanding claims - - (2) -Falacon Plastic Production (Under common directorship) -Gross written premiums 1 17 - - -Premiums receivable - - 1 493 -Claims incurred (36) 264 - - -Outstanding claims - - - -Acwa Arabian Co. and Sasakura for Water and Power (Under common directorship) -Premiums receivable - - 138 13811. TRANSACTIONS AND BALANCES WITH RELATED PARTIES (Continued)Related parties Nature of transaction Amount of transaction for the year end Balance SR’000 30 June 2019 30 June 2018 30 June 2019 31 December 2018 Unaudited Unaudited Unaudited AuditedOther related parties transactions and balances – due from / (due to) Addison Bradley International / Medgulf Lebanon (ABI) (affiliate) -Reinsurance recovery - 22 - - -Balance receivable at period / year end - - 30,265 30,265 -Allowance for doubtful debts - - (30,242) (30,242) -Net balance due from at period / year end - - 23 23Addison Bradley Arabia-KSA (ABAYA) (affiliate) -Payment received during the period / year - 274 - - -Reinsurance recoveries (Refer 11.a (iv) 15 360 - - -Balance due from at period / year end - - 16,267 16,252 - Allowance for doubtful debts - - (10,466) (10,106) - Net balance due from at period / year end - - 5,801 6,146Addison Bradley Arabia Holding LLC (UAE) (affiliate) -Balance due from at period / year end - - 1,472 1,472 - Allowance for doubtful debts - - (1,472) (1,472) - Net balance due from at period / year end (Refer 11.a (v) - - - -11.a(i) Statutory deposit is placed with the Saudi Investment Bank, at the commission rate of 2.80% per annum 11.a(ii) Discretionary portfolio management agreement (DPM) was signed on 11 February 2011 and includes a mix of equity and debt investments.11. a (iii) This represent overpayment of premium ceded to Medgulf Bahrain for reinsurance placement.11. TRANSACTIONS AND BALANCES WITH RELATED PARTIES (Continued)11. a (iv) This represent reinsurance claims recoverable from Addison Bradley International. Most of the reinsurance claim recoveries in respect of run-off treaties for the underwriting years up to 2014 have been collected by the related party either directly or through a broker (refer note 11.c).11. a (v) Reinsurance placement was made by the said related party. There is a claim recovery from the reinsurer which related party needs to recover. 11.b Compensation of key management personnelThe remuneration of the Board of Directors and other key management personnel during the period / year is as follows: SR’000 30 June 2019 (Unaudited) BOD members (Executives) BOD members (Non-Executive) Top Executives including the CEO and CFO Salaries and compensation - - 9,996Allowances - 207 -Annual remuneration - 1,784 -End of service indemnities - - 2,239 - 1,991 12,235 SR’000 31 December 2018 (Audited) BOD members (Executives) BOD members (Non-Executive) Top Executives including the CEO and CFO Salaries and compensation - 85 7,260Allowances - 480 -Annual remuneration - 3,394 -End of service indemnities - - 1,863 - 3,959 9,12311.c. All reinsurance treaties up to the underwriting year 2014 were managed by the Medgulf Group Corporate Reinsurance Center (“CRC”), a related party, who dealt with the Company’s transactions, along with those of other related parties, on a consolidated basis with the reinsurers and brokers. All transactions with reinsurers and brokers were routed through CRC and the settlement of balances with these reinsurers and brokers were also made by CRC. The Company, together with CRC, have now initiated an exercise to separate the Company’s transactions and balances with the respective reinsurers and brokers from those of other related parties. This exercise is still on-going and on completion certain parties included in the policyholders’ and reinsurance balances receivable under note 7 amounting to Saudi Riyals 115.3 million may be identified as receivable from related parties and therefore may need to be disclosed under due from related parties. The underlying transactions with such related parties will then also require disclosure under related party transactions. | |
| Disclosure of entity's operating segments [text block] | 13. SEGMENTAL INFORMATIONConsistent with the Company’s internal reporting process, operating segments have been approved by management in respect of the Company’s activities, assets and liabilities as set out below. Segment results do not include allocation of general and administrative expenses, allowance for doubtful debt, special commission income and other income to operating segments as these are reported and monitored on an overall basis.Segment assets do not include allocation of cash and cash equivalents, time deposits, available for sale investments, premiums and reinsurance balances receivable, prepayments and other assets, due from a related party, intangible assets, statutory deposit and property and equipment, net, as these are reported and monitored on a total basis.Segment liabilities do not include allocation of accounts and commission payable, reinsurance balances payable, accrued expenses and other liabilities, surplus distribution payable, end of service benefits, account and commission payable, due to a related party, zakat and tax and commissions payable to SAMA. Shareholders’ operations is a non-operating segment. Certain direct operating expenses, other overhead expenses and surplus from the insurance operations are allocated to this segment on an appropriate basis as approved by management. SAR’000 As at 30 June 2019 (Unaudited) Insurance operations Operating segments Medical Motor Property & casualty Total - Insurance operations Shareholders’ operations TotalAssets Reinsurers’ share of unearned premiums 115,222 79,329 250,334 444,885 - 444,885Reinsurers’ share of outstanding claims 24,334 (22,291) 320,612 322,655 - 322,655Reinsurers’ share of claims Incurred but not reported 51,835 60,951 90,857 203,643 - 203,643Deferred policy acquisition costs 37,921 9,588 12,825 60,334 - 60,334Unallocated assets 1,786,885 1,185,593 2,972,478Total assets 2,818,402 1,185,593 4,003,995 SAR’000 As at 30 June 2019 (Unaudited) Insurance operations Operating segments Medical Motor Property & casualty Total - Insurance operations Shareholders’ operations TotalLiabilities Gross unearned premiums 753,991 213,451 280,511 1,247,953 - 1,247,953Unearned reinsurance commission 17,859 19,748 14,912 52,519 - 52,519Gross outstanding claims 271,454 (135,384) 318,951 455,021 - 455,021Claims incurred but not reported 412,561 265,651 99,066 777,278 - 777,278Premium deficiency reserves 25,036 - 1,725 26,761 - 26,761Other technical reserves 2,672 5,329 7,019 15,017 - 15,017Unallocated liabilities and insurance operations` surplus 711,612 27,283 738,895Total liabilities and insurance operations` surplus 3,286,161 27,283 3,313,44413. SEGMENTAL INFORMATION (Continued) SAR’000 As at 31 December 2018 (Audited) Insurance operations Operating segments Medical Motor Property & casualty Total - Insurance operations Shareholders’ operations TotalAssets Reinsurers’ share of unearned premiums - 50,680 232,221 282,901 - 282,901Reinsurers’ share of outstanding claims - (20,377) 314,539 294,162 - 294,162Reinsurers’ share of claims Incurred but not reported - 48,733 77,911 126,644 - 126,644Deferred policy acquisition costs 51,630 12,976 11,621 76,227 - 76,227Unallocated assets 1,571,780 1,135,158 2,706,938Total assets 2,351,714 1,135,158 3,486,872 SAR’000 As at 31 December 2018 (Audited) Insurance operations Operating segments Medical Motor Property & casualty Total - Insurance operations Shareholders’ operations TotalLiabilities Gross unearned premiums 736,330 241,343 259,176 1,236,849 - 1,236,849Unearned reinsurance commission - 10,136 12,069 22,205 - 22,205Gross outstanding claims 110,072 (123,352) 338,494 325,214 - 325,214Claims incurred but not reported 300,862 237,791 86,257 624,910 - 624,910Premium deficiency reserves 48,466 - 2,586 51,052 - 51,052Other technical reserves - 4,721 5,038 9,759 - 9,759Unallocated liabilities and insurance operations` surplus 485,570 49,511 535,081Total liabilities and insurance operations` surplus 2,755,559 49,511 2,805,07013. SEGMENTAL INFORMATION (Continued) SAR 000’s For the six month period ended 30 June 2019 (Unaudited) Insurance operations Operating segments Medical Motor Property & casualty Total Shareholders’ operations TotalRevenues Gross premiums written -Direct 1,009,666 192,453 165,582 1,367,701 - 1,367,701 -Reinsurance - - - - - 1,009,666 192,453 165,582 1,367,701 - 1,367,701Reinsurance premiums ceded -Local - - (2,716) (2,716) - (2,716) -Abroad (226,774) (86,217) (139,452) (452,443) - (452,443) (226,774) (86,217) (142,168) (455,159) - (455,159)Excess of loss premiums (17,300) (3,590) (3,108) (23,998) - (23,998)Net Premiums Written 765,592 102,646 20,306 888,544 - 888,544Changes in unearned premiums, net 97,561 56,541 (3,222) 150,880 - 150,880Net Premiums Earned 863,153 159,187 17,084 1,039,424 - 1,039,424Reinsurance commission income 17,291 13,202 13,562 44,055 - 44,055Total Revenues 880,444 172,389 30,646 1,083,479 - 1,083,479Underwriting Costs and Expenses Gross claims paid (662,549) (164,615) (63,577) (890,741) - (890,741)Expenses incurred related to claims - (11,230) (2,355) (13,585) - (13,585)Early settlement discount 42,296 - - 42,296 42,296Reinsurers’ share of claims paid 27,351 41,923 62,429 131,703 - 131,703Net claims and other benefits paid (592,902) (133,922) (3,503) (730,327) - (730,327)Change in outstanding claims, net (109,339) 10,119 (2,094) (101,314) - (101,314)Change in IBNR, net (59,865) (15,641) 137 (75,369) - (75,369)Net claims and other benefits incurred (762,106) (139,444) (5,460) (907,010) - (907,010)Premium deficiency reserve 23,431 - 860 24,291 - 24,291Other technical reserves (2,672) (608) (1,978) (5,258) - (5,258)Policy acquisition costs (38,529) (11,598) (7,008) (57,135) - (57,135)Total Underwriting Costs and Expenses (779,876) (151,650) (13,586) (945,112) - (945,112) NET UNDERWRITING INCOME 100,568 20,739 17,060 138,367 - 138,367 Other Operating (Expenses)/Income Reversal of doubtful debts 20,521 - 20,521Legal case provision (10,926) - (10,926)General and administrative expenses (140,868) (3,848) (144,716)Third party administration fees (30,344) - (30,344)Special commission income 10,558 9,715 20,273Other income 18,578 - 18,578Total Other Operating Expenses, net (132,481) 5,867 (126,614) Net income for the period before zakat and income tax 5,886 5,867 11,75313. SEGMENTAL INFORMATION (Continued) SAR 000’s For the three month period ended 30 June 2019 (Unaudited) Insurance operations Operating segments Medical Motor Property & casualty Total Shareholders’ operations TotalRevenues Gross premiums written -Direct 153,803 101,893 34,762 290,458 - 290,458 -Reinsurance - - - - - - 153,803 101,893 34,762 290,458 - 290,458Reinsurance premiums ceded -Local - - (879) (879) - (879) -Abroad 183 (46,122) (26,097) (72,036) - (72,036) 183 (46,122) (26,976) (72,915) - (72,915)Excess of loss premiums (8,800) (1,460) (1,796) (12,056) - (12,056)Net Premiums Written 145,186 54,311 5,990 205,487 - 205,487Changes in unearned premiums, net 296,643 25,457 3,108 325,208 - 325,208Net Premiums Earned 441,829 79,768 9,098 530,695 - 530,695Reinsurance commission income 8,618 7,486 6,581 22,685 - 22,685Total Revenues 450,447 87,254 15,679 553,380 - 553,380Underwriting Costs and Expenses Gross claims paid (351,905) (79,340) (10,472) (441,717) - (441,717)Expenses incurred related to claims - (7,434) (1,094) (8,528) - (8,528)Early settlement discount 21,299 - - 21,299 21,299Reinsurers’ share of claims paid 23,830 21,261 10,625 55,716 - 55,716Net claims and other benefits paid (306,776) (65,513) (941) (373,230) - (373,230)Change in outstanding claims, net (54,100) 3,729 (864) (51,235) - (51,235)Change in IBNR, net (28,059) (10,797) (592) (39,448) - (39,448)Net claims and other benefits incurred (388,935) (72,581) (2,397) (463,913) - (463,913)Premium deficiency reserve 13,132 - 1,934 15,066 - 15,066Other technical reserves (397) (377) (495) (1,269) - (1,269)Policy acquisition costs (27,421) (5,486) (2,967) (35,874) - (35,874)Total Underwriting Costs and Expenses (403,621) (78,444) (3,925) (485,990) - (485,990) NET UNDERWRITING INCOME 46,826 8,810 11,754 67,390 - 67,390 Other Operating (Expenses)/Income Reversal of doubtful debts 9,338 - 9,338Legal case provision (10,926) - (10,926)General and administrative expenses (72,997) (1,931) (74,928)Third party administration fees (15,464) - (15,464)Special commission income 5,589 6,174 11,763Other income 16,944 - 16,944Total Other Operating Expenses, net (67,516) 4,243 (63,273) Net (loss) / income for the period before zakat and income tax (126) 4,243 4,11713. SEGMENTAL INFORMATION (Continued) SAR 000’s For the six month period ended 30 June 2018 (Unaudited) Insurance operations Operating segments Medical Motor Property & casualty Total Shareholders’ operations TotalRevenues Gross premiums written -Direct 445,985 182,918 64,376 693,279 - 693,279 -Reinsurance - - (1,800) (1,800) - (1,800) 445,985 182,918 62,576 691,479 - 691,479Reinsurance premiums ceded -Local - - (3,065) (3,065) - (3,065) -Abroad - (40,169) (46,391) (86,560) - (86,560) - (40,169) (49,456) (89,625) - (89,625)Excess of loss premiums - (4,201) (4,130) (8,331) - (8,331)Net Premiums Written 445,985 138,548 8,990 593,523 - 593,523Changes in unearned premiums, net 252,653 50,132 13,455 316,240 - 316,240Net Premiums Earned 698,638 188,680 22,445 909,763 - 909,763Reinsurance commission income - 15,143 14,038 29,181 - 29,181Total Revenues 698,638 203,823 36,483 938,944 - 938,944Underwriting Costs and Expenses Gross claims paid (770,899) (157,949) (173,069) (1,101,917) - (1,101,917)Expenses incurred related to claims - (10,170) (2,325) (12,495) - (12,495)Early settlement discount 44,613 - - 44,613 - 44,613Reinsurers’ share of claims paid - 44,682 171,824 216,506 - 216,506Net claims and other benefits paid (726,286) (123,437) (3,570) (853,293) - (853,293)Change in outstanding claims, net (9,143) 20,610 6,790 18,257 - 18,257Change in IBNR, net 77,754 (12,203) 1,052 66,603 - 66,603Net claims and other benefits incurred (657,675) (115,030) 4,272 (768,433) - (768,433)Premium deficiency reserve (9,621) - - (9,621) - (9,621)Other technical reserves 2,270 (2,580) 3,127 2,817 - 2,817Policy acquisition costs (43,789) (19,083) (8,563) (71,435) - (71,435)Total Underwriting Costs and Expenses (708,815) (136,693) (1,164) (846,672) - (846,672) NET UNDERWRITING INCOME (10,177) 67,130 35,319 92,272 - 92,272 Other Operating (Expenses)/Income Allowance for doubtful debts 19,770 - 19,770General and administrative expenses (129,278) (3,058) (132,336)Third party administration fees (23,776) - (23,776)Special commission income 5,370 4,421 9,791Other income 2,371 - 2,371Total Other Operating Expenses, net (125,543) 1,363 (124,180) Net loss for the period before zakat and income tax (33,271) 1,363 (31,908)13. SEGMENTAL INFORMATION (Continued) SAR 000’s For the three month period ended 30 June 2018 (Unaudited) Insurance operations Operating segments Medical Motor Property & casualty Total Shareholders’ operations TotalRevenues Gross premiums written -Direct 163,329 105,146 12,699 281,174 - 281,174 -Reinsurance - - (3,311) (3,311) - (3,311) 163,329 105,146 9,388 277,863 - 277,863Reinsurance premiums ceded -Local - - (2,199) (2,199) - (2,199) -Abroad - (22,037) (4,687) (26,724) - (26,724) - (22,037) (6,886) (28,923) - (28,923)Excess of loss premiums - (2,100) (2,066) (4,166) - (4,166)Net Premiums Written 163,329 81,009 436 244,774 - 244,774Changes in unearned premiums, net 160,112 12,553 8,653 181,318 - 181,318Net Premiums Earned 323,441 93,562 9,089 426,092 - 426,092Reinsurance commission income - 6,930 6,259 13,189 - 13,189Total Revenues 323,441 100,492 15,348 439,281 - 439,281Underwriting Costs and Expenses Gross claims paid (344,696) (74,607) (135,821) (555,124) - (555,124)Expenses incurred related to claims - (5,483) (1,764) (7,247) - (7,247)Early settlement discount 23,809 - - 23,809 23,809Reinsurers’ share of claims paid - 20,970 135,756 156,726 - 156,726Net claims and other benefits paid (320,887) (59,120) (1,829) (381,836) - (381,836)Change in outstanding claims, net (9,131) 11,082 1,160 3,111 - 3,111Change in IBNR, net 40,351 (9,611) 186 30,926 - 30,926Net claims and other benefits incurred (289,667) (57,649) (483) (347,799) - (347,799)Premium deficiency reserve (9,621) - - (9,621) - (9,621)Other technical reserves - (375) 1,861 1,486 - 1,486Policy acquisition costs (21,164) (9,529) (3,794) (34,487) - (34,487)Total Underwriting Costs and Expenses (320,452) (67,553) (2,416) (390,421) - (390,421) NET UNDERWRITING INCOME 2,989 32,939 12,932 48,860 - 48,860 Other Operating (Expenses)/Income Allowance for doubtful debts 19,734 - 19,734General and administrative expenses (69,977) (2,085) (72,062)Third party administration fees (11,248) - (11,248)Special commission income 2,217 3,810 6,027Other income 55 - 55Total Other Operating Expenses, net (59,219) 1,725 (57,494) Net loss for the period before zakat and income tax (10,359) 1,725 (8,634) | |
| Disclosure of capital management [text block] | 16. CAPITAL MANAGEMENT The Company manages its capital requirements by assessing shortfalls between reported and required capital levels on a regular basis. Adjustments to current capital levels are made in light of changes in market conditions and risk characteristics of the Company’s activities. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders or issue shares.The company is not in compliance with the solvency margin required by SAMA (refer note 2). | |
| Disclosure of commitments and contingencies, general [text block] | 20. GOODWILLThe Company held an ordinary general assembly meeting on 22 December 2008 and approved the purchase of the insurance portfolio and the related net assets and liabilities of the Saudi Arabian Operations of the Mediterranean and Gulf Insurance and Reinsurance Company (MEDGULF) B.S.C (closed) (“Portfolio”) effective 1 January 2009. The acquisition resulted in goodwill of SR 480 million. Determining whether goodwill is impaired requires an estimation of the recoverable amount of cash-generating units (‘CGU’) to which goodwill has been allocated. To assess the Goodwill impairment impact as of 31 December 2018, the Company appointed a consultant and a report dated 11 February 2018 was issued. Considering the Company as a single CGU, the consultant applied ‘Share Price’ and ‘Market’ approach on the trading activity of the Company’s stock and the capitalization of the earnings using value metrics of broadly comparable listed companies and Mergers and Acquisitions transaction multiples. Accordingly, as of the date of the approval of the financial statements for the year ended 31 December 2018 based on the aforementioned approach, the valuation result concluded the recoverable amount of goodwill to be higher than the carrying value. During the year end December 31, 2018 the management revisited the assessment approach by using Value-In-Use (VIU) assessment for the goodwill impairment based on a detailed five year business plan, in addition to the ‘Share Price’ and ‘Market’ approach on the trading activity of the Company’s stock. This assessment was carried-out by a consultant appointed by the Company in their report dated February 20, 2019. As per the management’s assessment, the goodwill will be impaired if WACC (Weighted average cost of capital) will have to increase to over 30% and terminal value growth rate reduce to 1% for goodwill to be impaired. During 30 June 2019, there was no sign of goodwill impairment. | |
| Disclosure of other notes relevant to understanding of financial statements [text block] | 18. STATUS OF ZAKAT, WITHHOLDING AND INCOME TAXESa) Zakat Charge for the periodThe zakat charge for the period consists of the current period’s provision amounting to SR 7,373 thousand (31 December 2018: SR 6,323 thousand). The zakat provision is based on Saudi Shareholders’ share of capital at 54.5% (31 December 2018: 54.5%). b) Income tax charge for the periodThere was no income tax provision in the current period and for the year ended 31 December 2018. c) Appeal on assessment The Company has filed its zakat and income tax declarations for the year from 16 April 2007 to 31 December 2017 with the General Authority of Zakat and Income Tax (GAZT). Further, the Company has filed two appeal for zakat, income tax and withholding tax for assessment years 2008 to 2012 and another one for assessment year 2013 to 2016. The management has made appropriate provisions in this interim condensed financial information based on the advice of the Company’s zakat and tax consultant. During the period ended 30 June 2019, the company has reach an agreement with GAZT regarding the two appeal for zakat, income tax and withholding tax for assessment years 2008 to 2012 and 2013 to 2016 and agreed on the amount to be paid of SR 115,555 thousand. The company has booked a provision of SR 131,346 thousand as per the zakat and tax consultant, thus, the amount of SR 15,791 thousand, which represent the difference between the provision amount and the agreed amount, was transfer to other income. Subsequent to the period 30 June 2019, the company has successfully paid the full amount agreed. The change in the accounting treatment for zakat and income tax (as explained in notes 2 and 4) has the following impact on the line items of the statements of income, statement of financial position and changes in shareholders' equity:As at and for the six-month period ended 30 June 2018:Financial statement impacted Account Before the restatement for the six-month period ended 30 June 2018: Effect ofrestatement As restated as at and for the six-month period ended 30 June 2018:Statement of changes in Equity Provision for zakat and income tax (Accumulated Losses) 3,779 (3,779) -Statement of income Zakat and income tax expenses - (2,930) (2,930)Statement of income Earnings per share (0.80) 0.06 (0.74)Statement of financial position Deferred tax asset / liability - 849 849As at and for the three -month period ended 30 June 2018:Financial statement impacted Account Before the restatement for the three-month period ended 30 June 2018: Effect ofrestatement As restated as at and for the three-month period ended 30 June 2018:Statement of changes in Equity Provision for zakat and income tax (Accumulated Losses) 1,927 (1,927) -Statement of income Zakat and income tax expenses - (1,503) (1,503)Statement of income Earnings per share (0.22) - (0.22)Statement of financial position Deferred tax asset / liability - 424 424 18. STATUS OF ZAKAT, WITHHOLDING AND INCOME TAXES (Continued)As at 31 December 2018Financial statement impacted Account Before the restatement as at 31 December 2018: Effect ofrestatement As restated as at 31 December 2018:Statement of financial position Deferred tax asset / liability - 13,923 13,923Statement of financial position Accumulated Losses (273,529) 13,923 (259,606)As at 1 January 2018Financial statement impacted Account Before the restatement as at 1 January 2018: Effect ofrestatement As restated as at 1 January 2018:Statement of financial position Deferred tax asset / liability - 12,225 12,225Statement of financial position Retained earnings (53,002) 12,225 (40,777)d) Deferred TaxGiven this is the first time deferred tax will be disclosed, the source i.e. where the temporary differences are arising from for deferred tax and its movement should be disclosed. 30 June 2019 31 December 2018Opening deferred tax asset 13,923 12,225Origination or reversal of temporary differences (2,081) 1,698Deferred tax expense Closing 11,842 13,923This deferred tax arises on end of service benefits, impairment allowance, unrecognized losses etc. | |
