| 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 ACTIVITIESBupa Arabia for Cooperative Insurance Company (the “Company”) is a Saudi Joint Stock Company incorporated in the Kingdom of Saudi Arabia as per the Ministry of Commerce and Investment’s Resolution number 138/K dated 24 Rabi Thani 1429H (corresponding to 1 May 2008). The Commercial Registration number of the Company is 4030178881 dated 5 Jumad Awwal 1429H (corresponding to 11 May 2008). The Registered Office of the Company is situated at:Al-Khalediyah District, Prince Saud Al Faisal Street,Front of Saudi Airlines Cargo Building,P.O. Box 23807, Jeddah 21436, Kingdom of Saudi Arabia.The Company is licensed to conduct insurance business in the Kingdom of Saudi Arabia under cooperative principles in accordance with Royal Decree No. M/74 dated 29 Shabaan 1428H (corresponding to 11 September 2007) pursuant to the Council of Ministers’ Resolution No 279 dated 28 Shabaan 1428H (corresponding to 10 September 2007).The objective of the Company is to transact cooperative insurance operations and related activities in the Kingdom of Saudi Arabia in accordance with its articles of association, and applicable regulations in the Kingdom of Saudi Arabia. The Company underwrites medical insurance only. The Board of Directors approve the distribution of surplus from insurance operations in accordance with the Implementing Regulations issued by the Saudi Central Bank (“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 in insurance operations is transferred to the shareholders’ operations in full. | |
| Disclosure of basis of preparation of financial statements [text block] | These financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRSs) as endorsed in the Kingdom of Saudi Arabia, and other standards and pronouncements as endorsed by Saudi organization for Certified Public Accountants (‘SOCPA”) (referred to as “IFRS as endorsed in KSA”). | |
| Disclosure of accounting framework used in preparation of financial statements [text block] | As required by the Saudi Arabian Insurance Regulations "the Implementation Regulations", the Company maintains separate books of accounts for "Insurance Operations" and "Shareholders' Operations". Accordingly, assets, liabilities, revenues and expenses attributable to either operation are recorded in the respective accounts. Note 36 to these annual financial statements provides the statement of financial position, statements of income, comprehensive income and cash flows of the insurance operations and shareholders operations, separately.During 2018, SAMA issued illustrative financial statements for the insurance sector in the Kingdom of Saudi Arabia. In preparing the Company level financial statements in compliance with IFRS as endorsed in the Kingdom of Saudi Arabia, the balances and transactions of insurance operations are combined with those of shareholders' operations. Inter-operation balances and transactions, if any, are eliminated in full. The accounting policies adopted for the insurance and shareholders' operations are uniform for like transactions and events in similar circumstances. | |
| Disclosure of new standards and amendments in standards [text block] | Standards issued but not yet effective: Standards issued but not yet effective up to the date of issuance of the Company’s annual financial statements are listed below. The Company intends to adopt these standards when they become effective.Standard/Interpretation Description Effective from periods beginning on or after the following dateIFRS 17Insurance Contracts See note belowIFRS 9 Financial Instruments See note belowAmendments to IAS 37 Onerous contracts – Cost of Fulfilling a contract 1 January 2023 | |
| Disclosure of issued IFRS not yet adopted [text block] | Standards issued but not yet effective: Standards issued but not yet effective up to the date of issuance of the Company’s annual financial statements are listed below. The Company intends to adopt these standards when they become effective.Standard/Interpretation Description Effective from periods beginning on or after the following dateIFRS 17 Insurance Contracts See note belowIFRS 9 Financial Instruments See note belowAmendments to IAS 37 Onerous contracts – Cost of Fulfilling a contract 1 January 2023IFRS 17 – Insurance ContractsOverviewThis standard has been published on May 18, 2017, 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 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 model 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.b) the Contractual Service Margin (CSM). The CSM represents the unearned profit for a group of insurance contracts and will be recognized 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 profit or loss 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 but the CSM cannot be negative, so changes in future cash flows that are greater than the remaining CSM are recognized in statement of income. Interest is also accreted on the CSM at rates locked in at initial recognition of a contract (i.e. discount rate used at inception to determine the present value of the estimated cash flows). Moreover, the CSM will be released into statement of income based on coverage units, reflecting the quantity of the benefits provided and the expected coverage duration of the remaining contracts in the group.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, the CSM is also adjusted for in addition to adjustment under general model.i) changes in the entity’s share of the fair value of underlying items; andii) changes in the effect of the time value of money and 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 the remaining coverage if it provides a measurement that is not materially different from the general 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, unless the Company chooses to recognise the payments as an expense. The general model remains applicable for the measurement of 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 and the deferral of the IFRS 9 temporary exemption in IFRS 4, is currently January 1, 2023. Earlier application is permitted if both IFRS 15 – Revenue from Contracts with Customers and IFRS 9 – Financial Instruments have also been applied. The Company intend to apply the standard on its effective date.TransitionRetrospective application is required. However, if full retrospective application for a group of insurance contracts is impracticable, then the entity is required to apply either a modified retrospective approach or a fair value approach.Presentation and DisclosuresThe Company expects that the new standard will result in a change in accounting policies for insurance contracts together with amendments to presentation and disclosures.ImpactThe Company is currently assessing the impact of the application and implementation of IFRS 17. As of the date of the publication of these financial statements, the Company expects the implementation of IFRS 17 to have impact on the following areas:Impact (continued)The Company expects the Implementation of IFRS 17 to have impact on the following areas:Impact Area Summary of ImpactFinancial Impact No Significant impact based on the assessment conducted in 2020. Data Impact Management is assessing data storage and infrastructure considering systems interfaces and data integrity. However, management believes that the data impact is not likely to be significant. IT Systems Management is assessing the current IT systems and considering the migration to a new system in phases by utilizing the current system capabilities before the migration is carried out ensuring IFRS17 disclosure and reconciliation requirements are met.Process Impact The Company is assessing the implication on process and need to establish new process to ensure that required line items and additional breakdowns are fed into the downstream systems to create the required presentations and disclosures. Impact on RI Arrangements The Company’s held reinsurance is not material (less than 1% of GWP is reinsured). New/enhanced systems should be flexible to account for any changes in the Company’s reinsurance strategy.Impact on Policies & Control Frameworks The Company needs to update the actuarial and accounting policies and develop guidance papers; From governance perspective, management needs to make sure all IFRS17 key decisions and results are appropriately reviewed and signed off by the auditors, appointed actuary, audit committee as well as the board of directors and the required control functions. The Company has started with their implementation process and have set up an implementation committee.IFRS 9 – Financial InstrumentsThis standard was published on July 24, 2014 and has replaced IAS 39. The new standard addresses the following items related to financial instruments:Classification and measurementIFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss. A financial asset is measured at amortized cost if both:i) the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows and;ii) 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 debt financial asset is measured at fair value through other comprehensive income and realized gains or losses would flow through profit or loss upon sale, if both conditions are met:i) 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;ii) the contractual terms of cash flows are SPPI.Assets not meeting either of these categories are measured at fair value through profit or loss. Additionally, at initial recognition, an entity can use the option to designate a financial asset at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch.For equity instruments that are not held for trading, an entity can also make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of the instruments (including realized gains and losses), dividends being recognized in profit or loss.Additionally, for financial liabilities that are designated as at fair value through profit or loss, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognized in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss.ImpairmentThe impairment model under IFRS 9 reflects expected credit losses, as opposed to incurred credit losses under IAS 39. Under the IFRS 9 approach, it is no longer necessary for a credit event to have occurred before credit losses are recognized. Instead, an entity always accounts for expected credit losses and changes in those expected credit losses. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition.Hedge accountingIFRS 9 introduces new requirements for hedge accounting that align hedge accounting more closely with Risk Management. The requirements establish a more principles-based approach to the general hedge accounting model. The amendments apply to all hedge accounting with the exception of portfolio fair value hedges of interest rate risk (commonly referred to as “fair value macro hedges”). For these, an entity may continue to apply the hedge accounting requirements currently in IAS 39. This exception was granted largely because the IASB is addressing macro hedge accounting as a separate project.Effective dateThe published effective date of IFRS 9 was January 1, 2018. However, amendments to IFRS 4 – Insurance Contracts: Applying IFRS 9 – Financial Instruments with IFRS 4 – Insurance Contracts, published on September 12, 2016, changes the existing IFRS 4 to allow entities issuing insurance contracts within the scope of IFRS 4 to mitigate certain effects of applying IFRS 9 before the IASB’s new insurance contract standard (IFRS 17 – Insurance Contracts) becomes effective. The amendments introduce two alternative options:1) apply a temporary exemption from implementing IFRS 9 until the earlier ofa) the effective date of a new insurance contract standard; orb) annual reporting periods beginning on or after January 1, 2023. This option is only available to entities whose activities are predominately connected with insurance and have not applied IFRS 9 previously; or2) adopt IFRS 9 but, for designated financial assets, remove from profit or loss the effects of some of the accounting mismatches that may occur before the new insurance contract standard is implemented. During the interim period, additional disclosures are required.iii) The Company has performed a detailed assessment beginning Jan 1, 2017: (1) The carrying amount of the Company’s liabilities arising from contracts within the scope of IFRS 4 (including deposit components or embedded derivatives unbundled from insurance contracts) were compared to the total carrying amount of all its liabilities; and (2) the total carrying amount of the Company’s liabilities connected with insurance were compared to the total carrying amount of all its liabilities. Based on these assessments the Company determined that it is eligible for the temporary exemption. Consequently, the Company has decided to defer the implementation of IFRS 9 until the effective date of the new insurance contracts standard. Disclosures related to financial assets required during the deferral period are included in the Company’s financial statements.iv) v) Impact assessment vi) vii) As at December 31, 2020, the Company has total financial assets and insurance related assets amounting to SR 8,752 million and SR 2,373 million, respectively. Financial assets mainly represent investments held to maturity which consist of cash and cash equivalents, term deposits and designated sukuk amounting to SR 2,854 million (2019: SR 5,511 million). Fair value investments held at fair value through statement of income as at December 31, 2020 is SR 3,695 million (2019: SR 270 million). Other financial assets consist of available for sale investments amounting to SR 2,203 million (2019: SR 1,440 million). The Company is currently assessing the impact on application and implementation of IFRS 9, however the Company expects the classification and measurement of financial assets to be impacted by the implementation of IFRS 9. | |
| Disclosure of critical accounting judgements, estimates and assumptions, general [text block] | Critical accounting judgments, estimates and assumptionsThe preparation of the Company’s financial statements requires management to make judgments, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities, and the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require material adjustment to the carrying amount of assets or liabilities affected in future years. 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. The following are the accounting judgments and estimates that are critical in the preparation of these financial statements:i) The ultimate liability arising from claims made under insurance contractsJudgment by management is required in the estimation of amounts due to medical providers and third parties arising from claims made under insurance contracts. Such estimates are necessary based on assumptions derived from several factors involving varying degrees of judgment and uncertainty as well as actual results may differ from management’s estimates resulting in future changes in estimated liabilities. The Company estimates its claims based on its previous experience of its insurance portfolio. 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. Claims requiring court or arbitration decisions, if any, are estimated individually. The Management reviews its provisions for claims incurred, and claims incurred but not reported, on a monthly basis. Any difference between the provisions at the statement of financial position date and actual settlement is included in provisions in the following year in the statement of income for that year. The provision for outstanding claims, as at 31 December, is also verified by an independent actuary.A range of methods such as the Chain Ladder Method, the Bornhuetter-Ferguson Method and the Expected Loss Ratio Method are used by the actuaries to determine these provisions. Also, the Actuaries have used a segmentation approach which includes analyzing the costs per member per year for the medical line of business. Underlying these methods are also a number of explicit or implicit assumptions relating to the expected settlement amount and the settlement patterns of the claims.Estimation of premium deficiency for medical insurance 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 active written policies. To arrive at the estimate of the expected loss ratio, the company’s actuarial team, and also the independent actuary, consider the claims and premiums relationship which is expected to apply on a month-to-month basis, and ascertain, at the end of the financial period, whether a premium deficiency reserve is required.ii) Impairment of receivablesA provision for impairment of receivables and reinsurance receivables is established when there is an 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 debtors, probability that the debtors will enter into bankruptcy or financial reorganisation, and default or delinquency in payments are considered indicators that the receivable is impaired.iii) Deferred acquisition costs Acquisition costs related to the sale of new policies are recorded as deferred acquisition costs and are amortised in the statement of income over the period of policy coverage. If the assumptions relating to future profitability of these policies are not realised, the amortisation of these costs could be accelerated and this may also require additional impairment write-offs in the statement of income.iv) Useful lives of Fixtures, Furniture and Right-of-use assets The Company's management determines the estimated useful lives of its Fixtures, Furniture and Right-of-use assets for calculating depreciation. These estimates are determined after considering the expected usage of the assets or physical wear and tear. Management reviews residual values and useful lives annually and future depreciation charges are adjusted where management believes the useful lives differ from previous estimates.v) Fair value of financial instrumentsThe fair value for financial instruments traded in active markets at the reporting date is based on their quoted market price. Where the fair values of financial assets and financial liabilities recorded on the statement of financial position cannot be derived from active markets, they are determined using a variety of valuation techniques that include the use of mathematical models. The inputs to these models are derived from observable market data where possible, but if this is not available, judgment is required to establish fair values.vi) Impairment of available for sale investments The Company exercises judgment to consider impairment on the available for sale investments at each reporting date. This includes determination of a significant or a prolonged decline in the fair value of equity securities below cost. The determination of what is 'significant' or 'prolonged' requires judgment. In making this judgment, the Company evaluates among other factors, the normal volatility in share prices. In addition, the Company considers impairment to be appropriate when there is evidence of deterioration in the financial health of the investee, industry and sector performance, changes in technology, and operational & financing cash flows. The Company considers 30% or more, as a reasonable measure for significant decline below its cost, irrespective of the duration of the decline, which is recognised in the statement of income as an impairment charge on investments. A prolonged decline represents a decline below cost that persists for 1 year or longer irrespective of the amount and is recognised in the statement of income accordingly as an impairment charge on investments. The previously recognised impairment loss in respect of equity investments cannot be reversed through the statement of income. The Company reviews its debt securities classified as available for sale at each reporting date to assess whether they are impaired. vii) Going concernThe Company’s management has made an assessment of its ability to continue as a going concern and is satisfied that it has the resources to continue in business for the foreseeable future. Furthermore, management is not aware of any material uncertainties that may cast significant doubt upon the Company’s ability to continue as a going concern. Therefore, the financial statements continue to be prepared on the going concern basis.viii) Impairment of GoodwillThe Company tests whether goodwill has suffered any impairment on an annual basis. For the 2020 and 2019 reporting periods, the recoverable amount of the cash-generating units (CGUs) was determined based on value-in-use calculations which require the use of assumptions. The calculations use cash flow projections based on financial budgets approved by management covering a three-year period. Cash flows beyond the three-year period are extrapolated using the estimated growth rates stated in note 4. These growth rates are consistent with forecasts included in industry reports specific to the industry in which each CGU operates.Goodwill is initially measured at cost being the excess of the net fair value of the identifiable assets and liabilities acquired. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Impairment for goodwill is determined by assessing the recoverable amount of the cash generating unit (or a group of cash generating units) to which the goodwill is related. When the recoverable amount of the cash-generating unit (or a group of cash generating units) is less than the carrying amount of the cash generating unit (or a group of cash generating units) to which goodwill has been allocated, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods. The recoverable amount is the greater of its value in use or fair value less cost to sell. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk specific to the asset. | |
| Disclosure of functional and presentation currency [text block] | These financial statements are presented in Saudi Arabian Riyals (SR), which is the Company’s functional currency. All financial information presented in SR has been rounded off to the nearest thousand except where otherwise indicated. | |
| Disclosure of going concern [text block] | The financial statements are prepared under the going concern basis and the historical cost convention, except for the measurement at fair value of investments held at fair value through statement of income (FVSI), available for sale investments, measurement of ultimate liability arising form claims made under insurance contracts and measurement of employees end-of-service benefits (EOSB) and liabilities for cash settled share based payments at present value. The Company’s statement of financial position is not presented using a current/non-current classification. However, the following balances would generally be classified as non-current: available for sale investments, held to maturity investments, fixtures, furniture and right-of-use assets, intangible assets, goodwill, statutory deposit, accrued income on statutory deposit, provision for employees’ EOSB and accrued income payable to SAMA. All other financial statement line items would generally be classified as current, unless stated otherwise. | |
| Disclosure of other general disclosures about reporting entity [text block] | The Company follows a fiscal year ending on 31 December. | |
| Disclosure of summary of significant accounting policies [abstract] | | |
| Disclosure of summary of significant accounting policies, general comment [text block] | The significant accounting policies applied in the preparation of these financial statements are summarised below. These policies have been consistently applied to each of the years presented except new IFRS standards, IFRIC interpretations and amendments thereof, adopted by the Company as explained below: | |
| Description of changes in accounting policy [text block] | a) New IFRS Standards, IFRIC interpretations and amendments thereof, adopted by the Company: The following new standards, amendments and revisions to existing standards, which were issued by the International Accounting Standards Board (IASB), have been effective from 1 January 2020 and accordingly adopted by the Company. The Company has assessed that the amendments have no significant impact on the Company’s financial statements., as applicable:, as applicable:Standard / Amendments DescriptionAmendments to IFRS 3Amendments to IFRS 3 Definition of businessDefinition of business 1 January 20201 January 2020Amendments to References to the Conceptual Framework in IFRS Standards. The revised Conceptual Framework includes some new concepts, updated definitions and recognition criteria for assets and liabilities and clarifies some important concepts. 1 January 2020Amendments to IFRS 9, IAS 39 and& IFRS 7 Interest Rate Benchmark Reform 1 January 2020Amendments to IAS 1 & IAS 8 Definition of material 1 January 2020Amendments to IAS 1 & IAS 8 Definition of material 1 January 2020 | |
| Description of accounting policy for cash and cash equivalents [text block] | Cash and cash equivalents consist of bank balances and term deposits that have original maturity periods not exceeding three months from the date of acquisition. | |
| Description of accounting policy for premiums/ contributions and insurance/ reinsurance or takaful/ retakaful balance receivables [text block] | Premiums receivable are stated at gross written premiums receivable from insurance contracts, less an allowance for any uncollectible amounts. An allowance for uncollectible amount is established when there is an objective evidence that the Company will not be able to collect all amounts due according to their original terms. Bad debts are written off as incurred. Subsequent recoveries of amounts previously written off are credited in the statement of income. | |
| Description of accounting policy for deferred policy acquisition costs [text block] | Commission and incremental direct costs incurred in relation to the acquisition and renewal of insurance contracts are deferred. The deferred acquisition costs are subsequently amortised over the terms of the insurance contract as premiums are earned and reported in the statement of income. Changes in the contractual 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. If the assumptions relating to future profitability of these policies are not realised, 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 for each reporting year. | |
| Description of accounting policy for income and other taxes including deferred taxes [text block] | xxvi) Zakat and income tax The income tax expense or credit for the year is the tax payable on the current year’s taxable income, based on the applicable income tax rate, 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 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.Deferred 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 taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation 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 recognised only to the extent that it is probable that future taxable profits will be available and the credits can be utilised. Deferred tax asset is reduced to the extent that it is no longer probable that the related tax benefits will be realised. Deferred tax assets and liabilities 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. | |
| Description of accounting policy for intangible assets and goodwill [text block] | Intangible assets Separately acquired intangible assets (software) are shown at historical cost. They have a finite useful life and are subsequently 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 periods: Years IT development and software 3 to 7GoodwillGoodwill is initially measured at excess of the fair value of the consideration paid over the fair value of the identifiable assets and liabilities acquired. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Impairment for goodwill is determined by assessing the recoverable amount of the cash generating unit (or a group of cash generating units) to which the goodwill is related. When the recoverable amount of the cash-generating unit (or a group of cash generating units) is less than the carrying amount of the cash generating unit (or a group of cash generating units) to which goodwill has been allocated, an impairment loss is recognised in the statement of income. Impairment losses relating to goodwill cannot be reversed in future periods. | |
| Description of accounting policy for property and equipment [text block] | Fixtures and Furnitures are initially recorded in the statement of financial position at cost. Subsequent measurement is carried out at cost less accumulated depreciation and any impairment in value. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets. The estimated useful lives of the assets for the calculation of depreciation are as follows: YearsLeasehold Improvements (civil, construction work and fixtures) 15 years or lease termFixtures, Furniture and Right-of-use assets 5 to 20 Computer and IT equipment and infra-structure 2.5 to 7Motor vehicles 4Residual values, useful lives and the methods of depreciation are reviewed and adjusted as appropriate at each financial year end. Impairment reviews take place when events or changes in circumstances indicate that the carrying value may not be recoverable. The depreciation charge for the year is recognised in the statement of income on an actual basis. Similarly, impairment losses, if any, are recognised in the statement of income. Expenditure for repairs and maintenance is charged to the statement of income. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company. Gain / loss on sale of Fixtures, Furniture and Right-of-use assets is included in statement of income. | |
| Description of accounting policy for liability adequacy test [text block] | Liability adequacy test At each reporting date the Company assesses annually whether its recognised insurance liabilities are adequate using current estimates of future cash flows under its insurance contracts. If that assessment shows that the carrying amount of its insurance liabilities is inadequate in the light of estimated future cash flows, the entire deficiency is immediately recognised in the statement of income and an unexpired risk provision is created. | |
| Description of accounting policy for accounts payable and accruals [text block] | Accounts payable and accruals Liabilities are recognised for amounts to be paid in the future for goods or services received, whether billed by the supplier or not. | |
| Description of accounting policy for provisions [text block] | Provisions Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the obligation amount. | |
| Description of accounting policy for statutory reserve [text block] | Statutory reserve In accordance with the Company’s by-laws, 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. | |
| Description of accounting policy for employees end of service benefits [text block] | Employee-end-of-service benefits (EOSB)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 the expected future wages 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 of high-quality corporate bonds with terms and currencies that match, as closely as possible, the estimated future cash outflows. The benefit payments obligation is discharged as it falls due. Re-measurement (actuarial gains / losses) as a result of experience adjustments and changes in actuarial assumptions are recognised in the statement of other comprehensive income. | |
| Description of accounting policy for impairment and uncollectibiity of financial assets [text block] | Impairment of financial assets The Company assesses at each reporting date, whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is an objective evidence of impairment as a result of one or more events that have occurred after the initial recognition of the asset (an incurred loss event) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. If such evidence exists, an impairment loss is recognised in the statement of income. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing a significant financial difficulty, default or delinquency in repayments, the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. Impairment is determined as follows:(a) For assets carried at cost, impairment is the difference between carrying value and the present value of future cash flows discounted at the current market rate of return for a similar financial asset; and(b) For assets carried at amortised cost, impairment is the difference between the carrying amount and the present value of future cash flows discounted at the original effective commission rate.For impaired available for sale securities any subsequent increase in fair value of these impaired securities is recognised in the statement of other comprehensive income and recorded in the investment fair value reserve unless this increase represents a decrease in the impairment loss that can be objectively related to an event occurring after the impairment loss was recognised in the statement of income. In such an event, the reversal of the impairment loss is recognised as a gain in the statement of income. Impairment relating to investments in available-for-sale equity instruments are not reversed through profit or loss. | |
| Description of accounting policy for cash dividend and non-cash distribution to equity holders [text block] | Cash dividend to shareholders The Company recognises a liability to make cash distributions to shareholders of the Company when the distribution is authorised and is no longer at the discretion of the Company. A distribution is authorised when it is approved by the shareholders and SAMA. A corresponding amount is recognised directly in equity. | |
| Description of accounting policy for reinsurance premium/ retakaful contributions [text block] | Reinsurance premiums (ceded)Reinsurance premiums ceded are recognised as a reduction in net written premium when payable. Reinsurance premiums are charged to income over the terms of the policies to which they relate on a pro-rata basis. | |
| Description of accounting policy for reinsurance/ retakaful activities [text block] | Reinsurance contracts held In order to optimise financial exposure from large claims, the Company enters into reinsurance agreements with local and internationally reputable reinsurers. Claims receivable from reinsurers are estimated in a manner consistent with the claim liability and in accordance with the reinsurance contracts. These amounts, if any, are shown as “Reinsurers’ share of outstanding claims” in the statement of financial position until the claim is agreed and paid by the Company. Once the claim is paid, the amount due from the reinsurers in connection with the paid claim is transferred to amounts due from / (to) reinsurers.At each reporting date, the Company assesses whether there is any indication that a reinsurance asset may be impaired. Where an indicator of impairment exists, the Company makes a formal estimate of recoverable amount. Where the carrying amount of a reinsurance asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. | |
| Description of accounting policy for investment income [text block] | (a) Financial assets at fair value through statement of income Investments are classified as at fair value through statement of income if they are classified as held-for-trading or are designated as such on initial recognition. The investments in sukuks, equities and mutual funds are held for trading and accordingly are classified as FVSI. Directly attributable transaction costs are recognised in the statement of income as incurred. Subsequently, such investments are re-measured at fair value, with all changes in fair value being recorded in the statement of income. (b) Available for sale investmentsAvailable for sale investments are non-derivative investments that are designated as available for sale or not classified as another category of financial assets, and are intended to be held for an unspecified period of time, which may be sold in response to needs for liquidity or changes in special commission rates, exchange rates or equity prices.Investments which are classified as available for sale are initially recognised at fair value including direct and incremental transaction costs and subsequently measured at fair value except for unquoted equity securities where fair value cannot be reliably measured are carried at cost. Any unrealised gains or losses arising from changes in fair value are recognised through the statement of comprehensive income until the investments are derecognised or impaired whereupon any cumulative gains or losses previously recognised in equity are reclassified to statement of income for the period and are disclosed as gains/(losses) on non-trading investments.(c) Held to maturity investmentsHeld to maturity investments are investments having fixed or determinable payments and fixed maturity that the management has the positive intention and ability to hold to maturity are classified as held to maturity. Investments are initially recognised at fair value including direct and incremental transaction cost. Subsequent to initial measurement, these are measured at amortised cost less impairment losses, if any. | |
| Description of accounting policy for claims/ benefits [text block] | Claims Claims, comprising amounts payable to medical providers and other third parties are charged to income as incurred. Claims comprise the estimated amounts payable, in respect of claims reported to the Company and those not reported at each reporting date.The Company estimates its claims based on previous experience. In addition, a provision based on the management’s judgment and the Company’s prior experience is maintained for the cost of settling claims incurred but not reported at each reporting date. Any difference between the provisions at the statement of financial position date and actual settlement is included in provisions in the following year in the statement of income for that year. 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. | |
| Description of accounting policy for general insurance/ takaful contracts [text block] | Insurance contracts Insurance contracts are those contracts where the Company (the insurer) has accepted significant insurance risk from another party (the policyholders) by agreeing to compensate the policyholders if a specified uncertain future event (the insured event) adversely affects the policyholders. As a general guideline, the Company determines whether it has significant insurance risk by comparing benefits paid with benefits payable if the insured event did not occur.Once a contract has been classified as an insurance contract, it remains an insurance contract for the remainder of its lifetime, even if the insurance risk reduces significantly during this period, unless all rights and obligations are extinguished or expired. | |
| Description of accounting policy for impairment of non-financial assets [text block] | Impairment of non-financial assets The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices or other available fair value indicators. The Company bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Company’s CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of three to five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year.Impairment losses of continuing operations are recognised in the statement of income.For assets, excluding goodwill, an assessment is made at each reporting date whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the asset’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the statement of income. | |
| Description of accounting policy for other revenue recognition [text block] | Revenue recognition Premiums earnedThe Company only issues short-term insurance contracts for providing health care services (‘medical insurance’) in Saudi Arabia. Premiums are taken to income over the terms of the policies to which they relate on a pro-rata basis based on 365th method. Unearned premiums represent the portion of premiums written relating to the unexpired period of coverage. The change in the provision for unearned premiums is taken to the statement of income.Investment and commission income Investment income or loss comprises of unrealised and realised gains and losses on investments. Commission income on term deposits is recognised using the effective interest method in the statement of income. | |
| Description of accounting policy for expenses [text block] | Expenses Selling and marketing expenses are those which specifically relate to salesmen, sales promotion, advertisements, regulatory levies, trademark fees and fulfillment costs. All other expenses are classified as general and administration expenses. | |
| Description of accounting policy for share based payments [text block] | Share based payments (LTIP)The cost of equity-settled transactions with employees is measured by reference to the fair value at the date on which they are granted. Grant date is the date at which the entity and an employee agree to a share based payment arrangement, being when the entity and the counterparty have a shared understanding of the terms and conditions of the arrangement. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity as a reserve for a share based payment, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (‘the vesting date’). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company's best estimate of the number of equity instruments that will ultimately vest. The charge or credit in the statement of income for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.In cases where an award is forfeited (i.e. when the vesting conditions relating to an award are not satisfied), the Company reverses the expense relating to such awards previously recognised in the statement of income. Where an equity-settled award is cancelled (other than forfeiture), it is treated as if it vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately.Shares held under employee share scheme (LTIP)The Company purchases shares held under employee share scheme to hedge itself against adverse changes in fair value of its shares between the grant date and the date on which these shares are transferred to employees. When shares recognised as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognised as a deduction from equity. Repurchased shares are classified as shares held under employee share scheme and are presented in the statement of changes in equity. | |
| Description of accounting policy for segment reporting [text block] | Segment reporting An operating segment is a component of an entity:- that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity); and- whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance; and- for which discrete financial information is available. | |
| Description of accounting policy for accounting of leases [text block] | Leases "Right of Use AssetsThe Company recognises Right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use).Company applies cost model, and measure right of use asset at cost;1. less any accumulated depreciation and any accumulated impairment losses; and 2. adjusted for any re-measurement of the lease liability for lease modificationsUnless the Company is reasonably certain to obtain ownership of the leased asset at the end of the lease term, Generally, right of use 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. it needs to be added to the right of use asset value.The recognised Right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment. Lease LiabilitiesOn 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 Comapny'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:1. Increasing the carrying amount to reflect interest on the lease liability.2. Reducing the carrying amount to reflect the lease payments made and;3. Re-measuring the carrying amount to reflect any re-assessment or lease modification. The lease liability is measured at amortized cost using the effective interest method. It is re-measured 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 re-measured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss 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 recognize 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 recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term. | |
| Description of accounting policy for foreign currencies [text block] | Foreign currencies The accounting records of the Company are maintained in Saudi Riyals. Transactions in foreign currencies are recorded in Saudi Riyals at the approximate rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the spot rate at the reporting date. All differences are taken to the statement of income. | |
| Description of accounting policy for derivative financial instruments and hedges [text block] | Financial instruments – initial recognition and subsequent measurementFinancial instruments comprise financial assets and financial liabilities.Financial assets consist of cash and cash equivalents, premiums receivable , investments, term deposits, statutory deposit and other receivables. Financial liabilities consist of insurance operations surplus payable, amounts due to related parties, and certain other liabilities.Date of recognitionRegular way sale and purchase of financial instruments is recognised on the trade date, i.e., the date that the Company becomes a party to the contractual provisions of the instrument. Regular way purchases or sales are purchases or sales of financial instruments that require settlement of instrument within the time frame generally established by regulation or convention in the market place.Measurement of financial instrumentsAll financial instruments are measured initially at their fair value plus, in the case of financial assets and financial liabilities not at fair value through statement of income, any directly attributable incremental costs of acquisition or issue. The classification of financial instruments at initial recognition depends on the purpose for which the financial instruments were acquired and their characteristics. Subsequent to initial measurement, financial instruments are carried at amortised cost except for FVSI and AFS investments which are carried at fair value.De-recognition Financial assetA financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when: the rights to receive cash flows from the asset have expired; or the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.When the Company has transferred its rights to receive cash flows from an asset or has entered into a ‘pass-through’ arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the asset is recognised to the extent of the Company’s continuing involvement in the asset. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.Financial liabilityA financial liability is derecognised when the obligation under the liability is discharged, cancelled or expired. | |
| Description of accounting policy for off setting financial assets and liabilities [text block] | Offsetting Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position only when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously. Income and expenses are not offset in the statement of income unless required or permitted by any accounting standard or interpretation, as specifically disclosed in the accounting policies of the Company. | |
| Description of accounting policy for time (murabaha) deposit [text block] | Term deposits, with original maturity of more than three months, are initially recognised in the statement of financial position at fair value and are subsequently measured at amortised cost using the effective interest method, less any impairment in value. | |
| Disclosure of notes forming part of accounts [abstract] | | |
| Disclosure of property and equipment [text block] | 10. FIXTURES, FURNITURE AND RIGHT OF USE ASSETS - net10.1 FIXTURES, FURNITURE Office, furniture,and fixtures Computerequipment Motor vehicles Leasehold improvements Capital work in progress Total 2020 SR’000 Cost: At 1 January 2020 85,828 46,167 404 41,039 6,699 180,137Additions during the year -- 2,892 -- -- 8,948 11,840Transferred during the year 404 10,946 -- 1,533 (12,883) --At 31 December 2020 86,232 60,005 404 42,572 2,764 191,977 Accumulated depreciation: At 1 January 2020 (57,194) (35,703) (60) (5,361) -- (98,318)Charge for the year (5,972) (5,132) (101) (4,061) -- (15,266)At 31 December 2020 (63,166) (40,835) (161) (9,422) -- (113,584) Net book value: At 31 December 2020 23,066 19,170 243 33,150 2,764 78,393 2019 SR’000 Cost: At 1 January 2019 85,360 38,549 -- 38,571 3,084 165,564Additions during the year -- -- -- -- 15,765 15,765Disposal during the year (111) (1,068) -- (13) -- (1,192) Transferred during the year 579 8,686 404 2,481 (12,150) --At 31 December 2019 85,828 46,167 404 41,039 6,699 180,137 Accumulated depreciation: At 1 January 2019 (49,739) (32,866) -- (1,716) -- (84,321)Charge for the year (7,455) (3,905) (60) (3,645) -- (15,065)Disposal during the year -- 1,068-- -- -- 1,068At 31 December 2019 (57,194) (35,703) (60) (5,361) -- (98,318) Net book value: At 31 December 2019 28,634 10,464 344 35,678 6,699 81,81910.2 RIGHT-OF-USE ASSETS The movement of Right-of-use assets are as follows: 2020 2019 SAR’000 SAR’000 As at 1 January 87,622 103,196Additions during the year 54,245 --Amortisation during the year (16,241) (15,574)As at 31 December 125,626 87,622 Total Fixture, Furniture and Right-of-use assets as at 31 December 204,019 169,441 | |
| Disclosure of investments [text block] | Investments are classified as follows: 2020 2019 Insurance operations Shareholders’ operations Total Insurance operations Shareholders’ operations Total SR’000 Held as FVSI 2,869,628 825,133 3,694,761 161,548 107,968 269,516Available-for-sale 698,553 1,504,882 2,203,435 564,003 876,063 1,440,066Held to maturity -- 131,250 131,250 -- 131,250 131,250 3,568,181 2,461,265 6,029,446 725,551 1,115,281 1,840,832(i) Investments held as FVSI comprise of the following: 2020 Insurance operations Shareholders’ operations Domestic International Domestic International Total SR’000 Sukuks 18,025 -- 55,079 -- 73,104Funds 2,843,985 7,618 747,199 22,855 3,621,657 2,862,010 7,618 802,278 22,855 3,694,761 2019 Insurance operations Shareholders’ operations Domestic International Domestic International Total SR’000 Sukuks 25,025 -- 78,078 -- 103,103Funds 136,523 -- 29,890 -- 166,413 161,548 -- 107,968 -- 269,516(ii) Available for sale investments comprise of the following: 2020 Insurance operations Shareholders’ operations Domestic International Domestic International Total SR’000 Sukuks 422,351 238,029 900,236 147,710 1,708,326 Funds - 38,173 107,501 7,111 152,785 Equities - - 228,716 5,625 234,341 Investments in discretionary portfolios - - 107,983 - 107,983 422,351 276,202 1,344,436 160,446 2,203,435 2019 Insurance operations Shareholders’ operations Domestic International Domestic International Total SR’000 Sukuks 238,899 287,287 461,248 180,545 1,167,979Funds -- 37,817 112,314 7,782 157,913Investments in discretionary portfolios -- -- 114,174 -- 114,174 238,899 325,104 687,736 188,327 1,440,066(iii) Held to maturity investments comprise of the following: 2020 Insurance operations Shareholders’ operations Domestic International Domestic International Total SR’000 -- Sukuks -- -- 131,250 -- 131,250 -- -- 131,250 -- 131,250 2019 Insurance operations Shareholders’ operations Domestic International Domestic International Total SR’000 -- Sukuks -- -- 131,250 -- 131,250 -- -- 131,250 -- 131,250The movements in the investments balance are as follows: 2020 Insurance operations Shareholders’ operations Total SR’000 Balance at the beginning of the year 725,551 1,115,281 1,840,832Purchases during the year 9,765,721 3,983,139 13,748,860Disposals during the year (6,935,704) (2,793,785) (9,729,489)Unrealised gains during the year, net 12,613 156,630 169,243 3,568,181 2,461,265 6,029,446 2019 Insurance operations Shareholders’ operations Total SR’000 Balance at the beginning of the year 810,175 811,316 1,621,491Purchases during the year 2,037,449 1,664,712 3,702,161Disposals during the year (2,154,358) (1,402,277) (3,556,635)Unrealised gains during the year, net 32,285 41,530 73,815 725,551 1,115,281 1,840,832 | |
| Disclosure of investments held-to-maturity [text block] | TERM DEPOSITS The term deposits are held with reputable commercial banks and financial institutions. These deposits are predominantly in Murabaha structure with a small allocation in Mudaraba structure. They are mostly denominated in Saudi Arabian Riyals and have an original maturity of more than three months to more than one year (2019: three months to more than one year) and yield financial income at rates ranging from 1.2% to 4.30% per annum (2019: 2.15% to 4.30% per annum). The movements in term deposits during the year ended 31 December 2020 as follows: 2020 Insurance operations Shareholders’ operations Total SR’000Balance at beginning of the year 3,347,965 1,716,011 5,063,976Matured during the year (2,238,760) (890,893) (3,129,653)Placed during the year 488,850 300,000 788,850 1,598,055 1,125,118 2,723,173 2019 Insurance Operations Shareholders’ operations Total SR’000Balance at beginning of the year 3,033,743 1,681,538 4,715,281Matured during the year (2,162,343) (1,126,451) (3,288,794)Placed during the year 2,476,565 1,160,924 3,637,489 3,347,965 1,716,011 5,063,976 | |
| Disclosure of deferred policy acquisition costs [text block] | DEFERRED POLICY ACQUISITION COSTS 2020 2019 SR’000 SR’000 Balance at beginning of the year 134,022 118,323Deferred during the year564,926 479,240Amortisation for the year (630,734) (463,541) 68,214 134,022 | |
| Disclosure of premiums/ contributions and insurance/ reinsurance or takaful/ retakaful balance receivables [text block] | Receivables comprise of amounts due from the following: 2020 2019 SR’000 SR’000 Policyholders 1,159,253 1,287,810Brokers 383,314 598,754 1,542,567 1,886,564Provision for doubtful receivables (222,524) (197,187)Premiums receivable – net 1,320,043 1,689,377Movement in provision for doubtful debts during the year was as follows: 2020 2019 SR’000 SR’000 Balance at the beginning of the year 197,187 169,231Provision made during the year 28,770 31,907Write-offs during the year (3,433) (3,951)Balance at end of the year 222,524 197,187The gross amount of impaired receivables amounted to SR 378,107 thousand (31 December 2019: SR 713,617 thousand). The aging analysis of premiums receivable - net arising from insurance contracts is as follows: 2020 Past due butnot impaired Past due and impaired Total Neither past due nor impaired Up to three months Above three and up to six months Above six and up to twelve months Above twelve months SR’000 Policyholders 389,768 481,842 89,359 14,213 1,835 977,017Brokers 222,027 52,705 57,196 8,392 2,706 343,026 611,795 534,547 146,555 22,605 4,541 1,320,043 2019 Past due butnot impaired Past due and impaired Total Neither past due nor impaired Up to three months Above three and up to six months Above six and up to twelve months Above twelve months SR’000 Policyholders 560,671 182,607 231,736 138,370 20,485 1,133,869Brokers 9,924 424,710 70,148 45,114 5,612 555,508 570,595 607,317 301,884 183,484 26,097 1,689,377Unimpaired receivables are estimated, on the basis of past experience, to be fully recoverable. It is not the practice of the Company to obtain collateral over receivables.The Company only enters into insurance and reinsurance contracts with recognised, creditworthy 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.The five largest customers account for 18.8% (31 December 2019: 14.9%) of the premium’s receivable as at 31 December 2020. | |
| Disclosure of prepayments and other assets [text block] | Prepaid expenses and other assets comprise of the following: 2020 2019 Insurance operations Shareholders’ operations Total Insurance operations Shareholders’ operations Total SR’000 Prepayments 48,529 -- 48,529 68,839 -- 68,839Accrued income 53,359 40,05693,41563,439 54,219 117,658Restricted deposits (note 17) -- -- -- 34,818 -- 34,818Other receivables 16,516-- 16,51655,328 -- 55,328 118,40440,056158,460 222,424 54,219 276,643 | |
| Disclosure of cash and cash equivalents [text block] | Cash and cash equivalents comprise of the following: 2020 Insurance operations Shareholders’ operations Total SR’000 Bank balances 195,232 438,019 633,251 195,232 438,019 633,251 2019 Insurance operations Shareholders’ operations Total SR’000 Bank balances 230,946 118,767 349,713Term deposits 215,996 100,000 315,996 446,942 218,767 665,709The amount payable to / receivable from shareholders’ operations is settled by transfer of cash at each reporting date. During the year ended 31 December 2020, the insurance operations transferred cash of SR 142 million to shareholders’ operations (31 December 2019: SR 95 million). | |
| Disclosure of statutory deposit [text block] | STATUTORY DEPOSITAs required by SAMA Insurance Regulations, the Company deposited an amount equivalent to 10% of its paid-up share capital, amounting to SR 120 million (2019: SR 120 million), in a bank designated by SAMA. Accrued income on this deposit is payable to SAMA amounting to SR 13.8 million (2019: SR 10.8 million) and this deposit cannot be withdrawn without approval from SAMA. | |
| Disclosure of employees' end of service benefits [text block] | EMPLOYEES’ END OF SERVICE BENEFITS Accruals are made in accordance with the actuarial valuation under the projected unit credit method while the benefit payments obligation is discharged as and when it falls due. The amounts recognised in the statement of financial position and movement in the obligation during the year based on its present value are as follows:21.1 Movement of end-of-service benefits 2020 2019 SR’000 SR’000 Balance at the beginning of the year 96,341 81,395Current service costs 23,163 15,737Finance costs 4,131 3,744Actuarial losses 20,700 1,551Benefits paid during the year (4,323) (6,086)Balance at the end of the year 140,012 96,34121.2 Principal actuarial assumptionsThe following range of significant actuarial assumptions was used by the Company for the valuation of end-of-service benefits: 2020 2019 Valuation discount rate 2.45% 4.50%Expected rate of increase in salary level across different age bands 4.5% 6.50%The impact of changes in sensitivities on present value of employees’ end-of-service benefits is as follows: 2020 2019 SR’000 SR’000Valuation discount rate - Increase by 0.5% 6,5213,159- Decrease by 0.5% (7,046) (3,356)Expected rate of increase in salary level across different age bands - Increase by 1% (14,259) (6,866)- Decrease by 1% 12,4826,197Mortality rate - Increase by 50% (74) (96)- Decrease by 50% 74 96Employee turnover - Increase by 20% (3,501) (1,735)- Decrease by 20% 3,634 1,767The average duration of the employees’ end-of-service benefits at the end of the reporting period is 10.9 years, (2019: 7.7 years) | |
| Disclosure of reinsurance/ retakaful balance payable [text block] | REINSURERS’ BALANCE PAYABLE Reinsurance payable represents amounts payable to reinsurers of SR 4.873 million (2019: SR 54.4 million), for the excess of loss (XOL) reinsurance contract. | |
| Disclosure of accrued expenses and other liabilities [text block] | ACCRUED AND OTHER LIABILITIES Accrued and other liabilities comprise of the following: 2020 2019 Insurance operations Shareholders’ operations Total Insurance operations Shareholders’ operations Total SR’000 Accrued expenses* 282,902141,849424,751 153,762 95,889249,651VAT payable 23,254-- 23,25438,311 -- 38,311Advances from policyholders 52,583 -- 52,58347,826 -- 47,826VAT payable to providers 121,595-- 121,59565,359 -- 65,359Other liabilities 53,867 -- 53,86747,540-- 47,540 534,201141,849676,050 352,79895,889448,687*As of 31 December 2020, Lease liability amounting of SAR 135.6 million (2019: SR 90.3 million), below is the movement during the year: 2020 2019 SR’000 SR’000 Balance at the beginning of the year 90,329 112,096 Finance cost 5,244 5,223 Additions during the year 54,245 --Lease settlement (14,218) (26,990) 135,600 90,329 | |
| Disclosure of zakat [text block] | Zakat The Zakat payable by the Company has been calculated in accordance with Zakat regulations in Saudi Arabia.The Zakat provision for the year is based on the following: 2020 2019 SR’000 SR’000 Share capital (attributable to Saudi shareholders) 712,869 729,000Opening retained earnings, reserve and surplus 1,189,671 753,313Opening provisions 389,301 146,978Adjusted net income 519,284 475,771Fixtures, Furniture, Right-of-use assets and goodwill (211,407) (206,701)Investments (5,203,315) (4,386,639)Others -- (154,318)Zakat Base (2,603,597) (2,642,596)Adjusted net income attributable to Saudi shareholders and the general public (refer (*) below) 519,284 475,771Zakat at 2.5% 12,982 11,894*Adjusted net income has been computed on a pro-rata basis taking into consideration before and after shareholding change.The differences between the accounting profit and the Zakat base are mainly due to certain adjustments in accordance with the relevant fiscal regulations.The Zakat charge relating to the Saudi shareholders consists of: 2020 2019 SR’000 SR’000 Provision for zakat @ 2.5% of adjusted net income 12,982 11,894Adjustment for assessment of zakat 51,315 45,927 64,297 57,821The movements in the Zakat provision during the year were as follows: 2020 2019 SR’000 SR’000 Balance at beginning of the year 232,444 184,295Charge for the year 64,297 57,821Payments made during the year (11,293) (9,672) 285,448 232,444Provision for zakat and income tax 2020 2019 SR’000 SR’000 Zakat payable (note (a) above) 285,448 232,444Income tax payable (note (b) above) 31,751 42,265 317,199 274,709 Status of assessment The Company has filed its zakat and income tax returns for the financial years up to and including the year 2019 with the General Authority of Zakat and Tax (the “GAZT”). The Company has received assessments for the fiscal periods 2008 through 2018 of additional zakat, corporate income tax and withholding tax in addition to delay fines on various assessed items. In February 2021, the company has reached a settlement with GAZT on all zakat, corporate income tax and withholding tax for the years 2008 through 2016 and 2018. All settled liabilities were provided for previously in respective years and there is no significant financial impact on the company’s financial statements. For the year 2017 assessments, the company has escalated the matter to the General Secretariat of Tax Committees (the “GSTC”). | |
| Disclosure of income tax [text block] | Income Tax 2020 2019 SR’000 SR’000 Current tax charge 70,969 65,700Deferred tax income (7,725) (4,664) 63,244 61,036The reconciliation of deferred tax is as follows: 2020 2019 SR’000 SR’000 Opening deferred tax asset 30,216 25,552Deferred tax income 7,725 4,664 37,941 30,216The movement in the income tax provision during the year was as follows: 2020 2019 SR’000 SR’000 Balance at beginning of the year 42,265 15,489Charge for the year 70,969 60,966Adjustment for previous years -- 4,734Payments made during the year (81,483) (38,924) 31,751 42,265Provision for zakat and income tax 2020 2019 SR’000 SR’000 Zakat payable (note (a) above) 285,448 232,444Income tax payable (note (b) above) 31,751 42,265 317,199 274,709Status of assessment The Company has filed its zakat and income tax returns for the financial years up to and including the year 2019 with the General Authority of Zakat and Tax (the “GAZT”). The Company has received assessments for the fiscal periods 2008 through 2018 of additional zakat, corporate income tax and withholding tax in addition to delay fines on various assessed items. In February 2021, the company has reached a settlement with GAZT on all zakat, corporate income tax and withholding tax for the years 2008 through 2016 and 2018. All settled liabilities were provided for previously in respective years and there is no significant financial impact on the company’s financial statements. For the year 2017 assessments, the company has escalated the matter to the General Secretariat of Tax Committees (the “GSTC”). | |
| Disclosure of classes of share capital [text block] | The authorised, issued and paid-up capital of the Company was SR 1,200 million at 31 December 2020 (31 December 2019: SR 1,200 million) consisting of 120 million shares (31 December 2019: 120 million shares) of SR 10 each.The shareholding structure of the Company as at 31 December, was reflected as below: 2020 2019 Holding Percentage SR’000 Holding Percentage SR’000 Major shareholders 52.3% 628,066 52.3% 628,066General Public 47.7% 571,934 47.7% 571,934 100.0% 1,200,000 100.0% 1,200,000 | |
| Disclosure of statutory reserve [text block] | As required by the Saudi Arabian Insurance Regulations, 20% of the shareholders’ income shall be set aside as a statutory reserve until this reserve amounts to 100% of the paid-up share capital. The Company carries out this transfer on an annual basis at 31 December. As at 31 December 2020, SR 867.1 million (31 December 2019: SR 727.9 million) had been set aside as a statutory reserve, representing 72% (31 December 2019: 61%) of the paid-up share capital. | |
| Disclosure of general and administrative expense [text block] | GENERAL AND ADMINISTRATIVE EXPENSES 2020 2019 Insurance operations Shareholders’ operations Total Insurance operations Shareholders’ operations Total SR’000 Employees’ costs 393,903 -- 393,903 359,200 -- 359,200Rents and maintenance costs 51,377 -- 51,377 26,908 -- 26,908Travelling expenses 4,192 -- 4,192 9,295 -- 9,295Depreciation and amortisation 47,238-- 47,23848,216-- 48,216Communication expenses 11,151 -- 11,151 7,695 -- 7,695Board expenses -- 5,277 5,277 -- 4,612 4,612Others 57,33815,073 72,41129,1435,93235,075 565,199 20,350 585,549 480,45710,544491,001 | |
| Disclosure of selling and marketing expenses [text block] | SELLING AND MARKETING EXPENSES 2020 2019 SR’000 SR’000 Employees’ costs 47,875 46,163Marketing expenses 24,816 29,490Trade mark fee (see note 19) 26,896 23,608Others 6,880 10,595 106,467 109,856 | |
| Disclosure of investments income [text block] | INVESTMENT INCOME, NET 2020 2019 Insurance operations Shareholders’ operations Total Insurance operations Shareholders’ operations Total SR’000 Commission income 109,560 102,907 212,467 117,605 108,635 226,240Realised gains/(losses) on investment, net 11,170 (11,218) (48) 8,468 (12,448) (3,980)Unrealised gains on FVSI investments, net 1,058 (182) 876 11,191 1,554 12,745 121,788 91,507 213,295 137,264 97,741 235,005 | |
| Disclosure of technical reserve for insurance/takaful/reinsurance/retakaful operations [text block] | TECHNICAL RESERVES1 Net outstanding claims and reserves 2020 2019 SR’000 SR’000 Outstanding claims 446,519 451,788Claims incurred but not reported 1,378,294 1,157,428Premium deficiency reserve 263,751 -Claims handling reserve 20,755 18,492 2,109,319 1,627,708Less: Reinsurers’ share of outstanding claims (1,475) (1,218)Reinsurers’ share of claims incurred but not reported (6,461) (3,972) (7,936) (5,190)Net outstanding claims reserve 2,101,383 1,622,5182 Movement in unearned premiumsMovements in unearned premiums are as follows: 2020 Gross Reinsurance Net SR’000 Balance at beginning of the year 4,376,219 (20,625) 4,355,594Premium written/(ceded) during the year 10,447,353 (65,242) 10,382,111Premium earned during the year (10,800,241) 65,759 (10,734,482) 4,023,331 (20,108) 4,003,223 2019 Gross Reinsurance Net SR’000 Balance at beginning of the year 3,428,131 (6,320) 3,421,811Premium written/(ceded) during the year 10,410,868 (105,794) 10,305,074Premium earned during the year (9,462,780) 91,489 (9,371,291) 4,376,219 (20,625) 4,355,594 | |
| Disclosure of earnings per share [text block] | EARNINGS PER SHARE The basic and diluted earnings per share has been calculated by dividing net income after zakat and tax for the year by the weighted average number of ordinary shares issued and outstanding at year end. | |
| Disclosure of related party transactions [text block] | RELATED PARTIES TRANSACTIONS AND BALANCESRelated parties represent major shareholders, Board members and key management personnel of the Company, and companies of which they are principal owners and any other entities controlled, jointly controlled or significantly influenced by them. Contract pricing policies and terms are conducted on an arm’s length basis and transactions approved by the Company’s management, or where required and applicable the Company’s Board of Directors. The following are the details of the major related party transactions during the year and their related balances:Related party Nature of transaction Amount of transactionsIncome/ (Expense) Receivable/(payable) balance as at 2020 2019 2020 2019 SR’000 SR’000 SR’000 SR’000Shareholders Insurance premium written 392,020 266,165 (536)** (285)**Shareholders Reinsurance Premium ceded (41,431) (36,423) (79,803)* (55,319)*Shareholders Claims paid (274,591) (145,780) (20,997)*** (14,010)***Shareholders Medical costs charged by providers (140,333) (89,805) (15,303)*** (9,824)***Shareholders Expenses charged to/ (from) a related party-net 869 1,520 966* 779*Shareholders Tax equalisation – net (1,873) (2,988) (1,873)* --Shareholders Board and committee member remuneration fees (915) (700) (915)* (700)* Bupa Middle East Holdings Two W.L.L. (Group Company) Trade mark fee (26,896) (23,608) (26,896)* (23,608)* * Amounts due to related parties amounted to SR 108,521 thousand (2019: SR 78,848 thousand).** Amounts included in premium receivables.*** Amounts are included in the outstanding claims.a. Compensation to key management personnel: 2020 2019 SAR’000 SAR’000 Salaries and allowances (note (a) below) 17,836 17,146Incentives (note (b) below) 17,208 19,423End of Service benefits 1,088 1,028 36,132 37,597 a) Includes the members’ direct salary related expenses, other than the incentives’ and EOS expenses.b) Includes the costs of the bonuses and the long term incentive plan. b. Board of Directors’ remuneration and related expenses 2020 2019 SAR’000 SAR’000 Board of Directors’ remuneration 3,600 3,000Board attendance fees 300 195Other board and sub-committees’ expenses 1,377 1,417 5,277 4,612 | |
| Disclosure of entity's operating segments [text block] | 22. OPERATING SEGMENTSThe Company only issues short-term insurance contracts for providing health care services (‘medical insurance’). All the insurance operations of the Company are carried out in the Kingdom of Saudi Arabia. For management reporting purposes, the operations are monitored in two customer categories, based on the number of members covered. Major customers represent members of large corporations, and all others are considered as non-major. Operating segments are reported in a manner consistent with internal reporting provided to the chief operating decision maker, who is responsible for allocating resources and assessing the performance of operating segments in line with the strategic decisions, has been identified as the chief executive officer. No inter-segment transactions occurred during the year.Operating segments do not include shareholders’ operations of the Company.Segment results do not include investment and commission income, other income, selling and marketing expenses, and general and administration expenses.Segment assets do not include cash and cash equivalents, fixtures, furniture and right-of-use assets, term deposits, investments, prepaid expenses and other assets. Segment liabilities do not include reinsurance balance payable, accrued and other liabilities, due to shareholders’ operations, share based payment and policyholders’ share of surplus from insurance operations.Consistent with the Company’s internal reporting, operating segments have been approved by the management in respect of the Company’s activities, assets and liabilities as stated below: 31 December 2020 Insurance operations Operating segments Major customers Non-major customers Total - Insurance operations Shareholders’ operations Total SR’000 SR’000 SR’000ASSETS Premiums receivable – net 775,488 544,555 1,320,043 -- 1,320,043Reinsurers’ share of unearned premiums 11,759 8,349 20,108 -- 20,108Reinsurers’ share of outstanding claims 490 985 1,475 -- 1,475Reinsurers’ share of claims incurred but not reported 1,959 4,502 6,461 -- 6,461Deferred policy acquisition costs 28,520 39,694 68,214 -- 68,214Unallocated assets 5,479,872 4,600,182 10,080,054Total assets 6,896,173 4,600,182 11,496,355 LIABILITIES Unearned premiums 2,352,884 1,670,447 4,023,331 -- 4,023,331Outstanding claims 319,669 126,850 446,519 -- 446,519Claims incurred but not reported 988,089 390,205 1,378,294 -- 1,378,294Premium Deficiency Reserve 189,017 74,734 263,751 -- 263,751Claims handling reserve 14,869 5,886 20,755 -- 20,755Unallocated liabilities 739,465 721,387 1,460,852Total liabilities 6,872,115 721,387 7,593,502 31 December 2019 Insurance operations Operating segments Major customers Non-major customers Total - Insurance operations Shareholders’ operations Total SR’000 SR’000 SR’000ASSETS Premiums receivable – net 992,461 696,916 1,689,377 -- 1,689,377Reinsurers’ share of unearned premiums 10,819 9,806 20,625 -- 20,625Reinsurers’ share of outstanding claims 526 692 1,218 -- 1,218Reinsurers’ share of claims incurred but not reported 1,213 2,759 3,972 -- 3,972Deferred policy acquisition costs 81,753 52,269 134,022 -- 134,022Unallocated assets 4,742,882 3,589,000 8,331,882Total assets 6,592,096 3,589,000 10,181,096 LIABILITIES Unearned premiums 2,717,387 1,658,832 4,376,219 -- 4,376,219Outstanding claims 327,541 124,247 451,788 -- 451,788Claims incurred but not reported 845,862 311,566 1,157,428 -- 1,157,428Premium deficiency Reserve -- -- -- -- --Claims handling reserve 13,460 5,032 18,492 -- 18,492Unallocated liabilities 575,665 556,607 1,132,272Total liabilities 6,579,592 556,607 7,136,199 2020Operating segments Major customers Non-major customers Total SR’000 REVENUES Gross premiums written 6,972,563 3,474,790 10,447,353Reinsurance premiums ceded – Local (3,691) (2,262) (5,953)Reinsurance premiums ceded – International (36,756) (22,533) (59,289)Net premiums written 6,932,116 3,449,995 10,382,111Changes in unearned premiums – net 365,443 (13,072) 352,371Net premiums earned 7,297,559 3,436,923 10,734,482 UNDERWRITING COSTS AND EXPENSES Gross claims paid (5,878,457) (2,383,593) (8,262,050)Reinsurers’ share of claims paid 14,902 6,085 20,987Net claims paid (5,863,555) (2,377,508) (8,241,063)Changes in outstanding claims 7,872 (2,603) 5,269Changes in claims incurred but not reported (142,227) (78,639) (220,866)Changes in Premium deficiency Reserve (189,017) (74,734) (263,751)Changes in claims handling reserves (1,409) (854) (2,263)Reinsurance share of changes in outstanding claims (36) 293 257Reinsurance share of changes in claims incurred but not reported 746 1,743 2,489Net claims incurred (6,187,626) (2,532,302) (8,719,928)Policy acquisition costs (378,440) (252,294) (630,734)Total underwriting costs & expenses (6,566,066) (2,784,596) (9,350,662) NET UNDERWRITING INCOME 731,493 652,327 1,383,820 OTHER OPERATING (EXPENSES)/ INCOME Allowance for doubtful receivables (28,770)Unallocated income 240,776Unallocated expenses (692,016)Total other operating (expenses)/income (480,010) Income before Surplus, Zakat & Income Tax 903,810 Income attributed to the insurance operations (transfer to surplus payable) (80,141) Income attributed to the shareholders before zakat and income tax 823,669Zakat charge (64,297)Income tax charge (63,244)NET INCOME ATTRIBUTED TO SHAREHOLDERS AFTER ZAKAT AND INCOME TAX 696,128 Gross Written Premium details 2020SAR’000Corporates 7,904,182Medium Enterprises 1,770,054Small Enterprises 695,395Micro Enterprises 62,104Individuals 15,618Total 10,447,353 2019Operating segments Major customers Non-major customers Total SR’000 REVENUES Gross premiums written 6,848,097 3,562,771 10,410,868Reinsurance premiums ceded – Local (7,456) (2,921) (10,377)Reinsurance premiums ceded – International (68,558) (26,859) (95,417)Net premiums written 6,772,083 3,532,991 10,305,074Changes in unearned premiums – net (617,873) (315,910) (933,783)Net premiums earned 6,154,210 3,217,081 9,371,291 UNDERWRITING COSTS AND EXPENSES Gross claims paid (5,121,026) (2,534,052) (7,655,078)Reinsurers’ share of claims paid 39,126 19,506 58,632Net claims paid (5,081,900) (2,514,546) (7,596,446)Changes in outstanding claims 27,760 75,610 103,370Changes in claims incurred but not reported (271,063) 11,758 (259,305)Changes in claims handling reserves (1,044) 1,952 908Reinsurance share of changes in outstanding claims 220 662 882Reinsurance share of changes in claims incurred but not reported (1,224) 2,518 1,294Net claims incurred (5,327,251) (2,422,046) (7,749,297)Policy acquisition costs (278,125) (185,417) (463,542)Total underwriting costs & expenses (5,605,376) (2,607,463) (8,212,839) NET UNDERWRITING INCOME 548,834 609,618 1,158,452 OTHER OPERATING (EXPENSES)/ INCOME Allowance for doubtful receivables (31,907)Unallocated income 253,800Unallocated expenses (600,857)Total other operating (expenses)/income (378,964) Income before Surplus, Zakat & Income Tax 779,488 Income attributed to the insurance operations (transfer to surplus payable) (66,834) Income attributed to the shareholders before zakat and income tax 712,654Zakat charge (57,821)Income tax charge (61,036)NET INCOME ATTRIBUTED TO SHAREHOLDERS AFTER ZAKAT AND INCOME TAX 593,797 Gross Written Premium details 2019SAR’000Corporates 7,802,157Medium Enterprises 1,834,555Small Enterprises 700,490Micro Enterprises 56,930Individuals 16,736Total 10,410,868 | |
| Disclosure of capital management [text block] | CAPITAL MANAGEMENT For the purpose of the Company’s capital management, capital includes share capital and all other equity reserves attributable to the shareholders. Objectives are set by the Board of Directors of the Company to maintain healthy capital ratios to support its business objectives and maximise shareholders’ value. 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 the risk characteristics of the Company’s activities. To maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders or issue shares. Total capital amounted to SR 3,878,795 (31 December 2019: SR 3,032,393).In the opinion of the Board of Directors, the Company has fully complied with the regulatory capital requirements during the reported financial year. No changes were made in the objectives, policies or processes for managing capital during the years ended 31 December 2020 and 2019. | |
| Disclosure of insurance/ takaful operations surplus and dividends [text block] | INSURANCE OPERATIONS’ SURPLUS PAYABLE 2020 2019 SR’000 SR’000 Balance at the beginning of the year 168,454 139,755Income attributable to insurance operations during the year 80,141 66,834Surplus paid to policyholders during the year (48,204) (38,135)Net surplus payable to policyholders 200,391 168,454 | |
| Disclosure of equity incentive plan [text block] | The Company established a share-based compensation scheme for its key management that entitles them to Bupa Arabia shares subject to successfully meeting certain service and performance conditions. Under the share-based compensation scheme, the Company manages various plans. Significant features of these plans are as follows:Maturity dates Between December 2020 and December 2023Total number of shares granted on the grant date 519,411Vesting period 3-4 years Method of settlement EquityFair value per share on grant date Average SAR 97.21 | |
| Disclosure of gross premiums/ contributions and hold harmless agreements [text block] | | |
| Disclosure of claims/ benefits development table [text block] | CLAIMS DEVELOPMENT TABLE The following table reflects the estimated ultimate claim cost, including claims notified and incurred but not reported for each successive treatment year at each 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. As claims develop and the ultimate cost of claims becomes more certain, adverse claims experiences will be eliminated which results in the release of reserves from earlier treatment years. In order to maintain adequate reserves, the Company transfers much of this release to the current treatment year reserves when the development of claims is less mature and there is much greater uncertainty attached to the ultimate cost of claims.Treatment year – gross outstanding claims 2017 2018 2019 2020 TotalSR ‘000 Estimate of ultimate claims cost: At the end of treatment year 6,577,919 6,949,081 7,842,155 8,742,057 30,111,212 One year later 6,572,947 6,845,677 7,841,118 -- 21,259,742 Two years later 6,563,363 6,874,130 -- -- 13,437,493 Three years later 6,577,989 -- -- -- 6,577,989 Current estimate of ultimate claims 6,577,989 6,874,130 7,841,118 8,742,057 30,035,294Ultimate payments to date (6,561,091) (6,860,099) (7,823,274) (6,966,017) (28,210,481)Liability recognised in the statement of financial position 16,898 14,031 17,844 1,776,040 1,824,813Premium deficiency reserve 263,751 Claims handling provision 20,755 Balance at 31 December 2,109,319 Treatment year – net outstanding claims SR ‘000 Estimate of ultimate claims cost: At the end of treatment year 6,532,672 6,897,367 7,768,195 8,693,491 29,891,725 One year later 6,528,729 6,787,022 7,765,376 -- 21,081,127 Two years later 6,513,541 6,815,520 -- -- 13,329,061 Three years later 6,528,225 -- -- -- 6,528,225 Current estimate of ultimate claims 6,528,225 6,815,520 7,765,376 8,693,491 29,802,612Ultimate payments to date (6,511,328) (6,801,514) (7,747,783) (6,925,110) (27,985,735)Liability recognised in the statement of financial position 16,897 14,006 17,593 1,768,381 1,816,877Premium deficiency Reserve 263,751 Claims handling provision 20,755 Balance at 31 December 2,101,383 | |
| Disclosure of commitments and contingencies, general [text block] | COMMITMENTS AND CONTINGENCIESThe Company’s commitments and contingencies are as follows: 2020 2019 SR’000 SR’000 Letters of guarantee -- 34,818 -- 34,818i) The Company is subject to legal proceedings in the ordinary course of business. There was no material change in the status of legal proceedings as at 31 December 2020.ii) As of 31 December 2020, total Letters of Guarantee issued by banks amounted to SR 138 million (2019: SR 134.8 million), of which Nil (2019: SR 34.8 million) are issued against restricted deposits with banks and have been recorded under prepaid expenses and other assets. | |
| Disclosure of risk management [abstract] | | |
| Disclosure of insurance/ takaful risk [text block] | RISK MANAGEMENT a) Insurance risk The Company provides short-term health insurance contracts in Saudi Arabia. Accordingly, the main insurance Risk within the Company is the claims reserve risk resulting from fluctuations in the estimated ultimate claims. The Company seeks to manage this through close monitoring of the claims’ trend and payments’ pattern to ensure that sufficient reserves are available to cover claim liabilities. The Company also have an external actuary to perform quarterly independent reviews of the reserves adequacy.The Company has a reinsurance arrangement to reduce its exposure through transfer of risk. The reinsurance agreement is an excess of loss treaty per person per claim on losses occurring basis. i) The ultimate liability arising from claims made under insurance contractsClaims reserves which are key components of the Company’s ultimate liability are estimated amounts of the outstanding claims, incurred but not reported claims (“IBNR”) and claims handling provisions. These reserves do not represent exact calculations but rather expectations based on historical claims’ trend (frequency and severity), payments’ pattern, medical inflation, members’ behaviour, seasonality and other factors. The Company has a large insurance portfolio resulting in stable claims development patterns which relatively reduces the risk of fluctuations in the estimated ultimate claims. The short-tailed nature of the business is associated with higher consistency of the reserve estimates. The Company continually review the adequacy of claims reserves by conducting back-testing analysis, assessing the sufficiency of data, monitoring claims backlogs and settlement patterns. In addition, the external actuary runs independent valuation models after due reconciliation with financial statements to validate reserve adequacy.ii) Concentration of insurance risk The insurance risk exposure related to policyholders is mainly concentrated in Saudi Arabia. However, through its underwriting strategy, the Company ensures that the portfolio is well diversified and not concentrated within few large clients. Its business is proportionally spread across all regions in the Saudi Arabia, and the Company targets both corporate and retail business. The insurance portfolio is not concentrated in a specific benefit level (diverse medical providers, different deductibles, annual limits and sub-limits)iii) Process used to decide on assumptionsThe pricing team follows the Company’s underwriting guidelines (approved by the Board of Directors) in setting premiums taking into consideration credible claims experiences for both new business and renewals or medical declarations. Assumptions used in determining claims reserves are based on the best estimate. Ultimate claims are estimated using historical claim trends adjusted for inflation, seasonality, membership growth and any other external or internal factors that may have impact on claim costs. Given the nature of the business, the Company may still be exposed to risk of insufficiency of claim reserves for which actual claim cost may turn out to be higher than the initial estimated ultimate claims. The estimation of IBNR is generally subject to a greater degree of uncertainty than the estimation of the outstanding claims which are received but not yet settled with the providers. For the case of outstanding claims, the Company uses payment information of settled batches with providers to estimate the expected settlement amounts of recently submitted batches, while it uses mainly pre-authorization data to estimate IBNR. The Company seeks to avoid inadequate reserve levels by adopting established processes in determining claim reserve and using updated information from both claims received and pre-authorization data.The premium liabilities have been determined as such that the total premium liability provisions (unearned premium reserve and premium deficiency reserve, if applicable and required as per the result of the liability adequacy test) would be sufficient to service the future expected claims and expenses likely to occur on the unexpired policies. The expected future liability is determined using the Company’s loss ratio adjusted for seasonality and portfolio mix for the remaining unearned period. The details of estimation of the outstanding claims and premium deficiency reserves are given under Notes 2(d)(i).iv) Sensitivity analysis The Company believes that the claim liabilities under insurance contracts outstanding at year-end are adequate. However, these amounts are not certain and actual payments may differ from the claims liabilities provided in the 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. An assumed 5% change in the claims’ ratio, net of reinsurance, would impact net underwriting income as follows: 2020 2019 SR’000 SR’000 Impact of change in claims ratio by 5% 536,724 468,565 | |
| Disclosure of reinsurance/ retakaful risk [text block] | Reinsurance risk The Company has a reinsurance arrangement to reduce its exposure through transfer of insurance risk. The reinsurance agreement is an excess of loss treaty per person per claim on losses occurring basis. Such arrangement protects the Company from large claims with a reasonable ceded premium given the stable underwriting performance and the size of the insurance portfolio.The Reinsurers are selected based on the following criteria:- All reinsurers should meet SAMA’s minimum acceptable rating of BBB (S&P Rating). - The reinsurers’ panel and the agreement should be reviewed and approved by the Company’s Board of Directors.Reinsurance ceded business does not relieve the Company from its obligations 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 obligations under the reinsurance agreements. | |
| Disclosure of market risk [text block] | Market risk Market risk refers to the potential impact of various market dynamics on the fair value or the expected cash flows of financial instruments. The Company adopts asset allocation guidelines and diversification limits on asset classes, geographies, currencies and securities to ensure that market risk is contained and kept to minimal levels. The Board of Directors sets the overall risk appetite to a prudent level that does not impact the Company’s operating results. The management prepares monthly and quarterly reports, highlighting deployment activities and exposure limits to ensure that appropriate monitoring and compliance with the approved guidelines. Management performs continuous assessment of developments in relevant markets to ensure that market risk is monitored and mitigated at the asset class and securities levels. Market risk comprises three types: interest rate risk, price risk and currency risk. i) Interest rate risk Interest rate risk is the potential change in the fair value of financial instruments and expected cash flows as a result of changes in interest rates. Management constantly monitors developments in global and local interest rates and accordingly allocates the durations of its term deposits and sukuk investments. Investments in term deposits and sukuk instruments have various maturities in order to maximise investment returns while ensuring that liquidity requirements are continuously met. Details of maturities of interest bearing securities as at 31 December are as follows: 2020 Less than 3 months 3 months to 1 year 1 year to 3 years More than 3 years Total SR’000 Term deposits 668,555 1,011,500 650,094 393,024 2,723,173Investments in Sukuk 125,000 86,304 405,184 1,296,192 1,912,680 793,555 1,097,804 1,055,278 1,689,216 4,635,853 2019 Less than 3 months 3 months to 1 year 1 year to 3 years More than 3 years Total SR’000 Term deposits 1,109,087 1,899,771 1,662,000 393,118 5,063,976Investments in Sukuk 84,416 235,271 308,969 773,677 1,402,333 1,193,503 2,135,042 1,970,969 1,166,795 6,466,309ii) Price risk Price risk is the potential change in the fair value of financial instruments as a result of instrument-specific developments or systemic factors affecting the overall market in which the instrument is being traded.The total size of investments which are exposed to market price risk is SR 6,029 million (2019: SR 1,841 million). The Company manages this risk conducting thorough due diligence on each instrument prior to investing as well as maintaining exposure limits guidelines to minimise the potential impact of marking to market on the overall portfolio. The potential impact of a 10% increase or decrease in the market prices of investments on Company's profit would be as follows: Fair value change Effect on Company’s profit SR’0002020 10% 22,3782019 10% 26,952The above sensitivity analysis is only on FVSI investments which directly impact the Company’s profit. iii) Currency risk Currency risk is the potential fluctuation of the value of a financial instrument due to changes in foreign exchange rates. All Company’s transactions are in Saudi Arabian Riyals and US Dollar. Given the peg of Saudi Arabian Riyals and US Dollars, foreign exchange risk is minimal. | |
| Disclosure of credit risk [text block] | Credit risk Credit 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. 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 term deposits and investments with reputable financial institutions. The Company enters into reinsurance contracts with recognised, creditworthy third parties (rated A or above).The following table shows the maximum exposure to credit risk by class of financial asset: 2020 2019 SR’000 SR’000 Cash and cash equivalents 633,251 665,709Premiums receivable – net 1,320,043 1,689,377Reinsurers’ share of outstanding claims 1,475 1,218Reinsurers’ share of claims incurred but not reported 6,461 3,972Investments 6,029,446 1,840,832Other assets 109,931 207,804Term deposits 2,723,173 5,063,976Statutory deposit 120,000 120,000Accrued income on statutory deposit 13,806 10,820 10,957,586 9,603,708 The 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 AAA 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. 2020 Non-investment grade Investment grade Not impaired Impaired Total SR’000 Cash and cash equivalents 633,251 -- -- 633,251Premiums receivable – net -- 1,146,342 173,701 1,320,043Reinsurers’ share of outstanding claims 1,475 -- -- 1,475Reinsurers’ share of claims Incurred but not reported 6,461 -- -- 6,461Investments 6,029,446 -- -- 6,029,446Other receivables 109,931 -- -- 109,931Term deposits 2,723,173 -- -- 2,723,173Statutory deposit 120,000 -- -- 120,000Accrued income on statutory deposit 13,806 -- -- 13,806 9,637,543 1,146,342 173,701 10,957,586 2019 Non-investment grade Investment grade Not impaired Impaired Total SR’000 Cash and cash equivalents 665,709 -- -- 665,709Premiums receivable – net -- 1,177,912 511,465 1,689,377Reinsurers’ share of outstanding claims 1,218 -- -- 1,218Reinsurers’ share of claims Incurred but not reported 3,972 -- -- 3,972Investments 1,840,832 -- -- 1,840,832Other receivables 207,804 -- -- 207,804Term deposits 5,063,976 -- -- 5,063,976Statutory deposit 120,000 -- -- 120,000Accrued income on statutory deposit 10,820 -- -- 10,820 7,914,331 1,177,912 511,465 9,603,708 | |
| Disclosure of liquidity risk [text block] | Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its operational or financial obligations when they are due. Liquidity requirements are monitored on monthly basis and management ensures that sufficient liquid funds are available to meet any commitments as they arise.Unearned premiums have been excluded from the analysis as they are not contractual obligations. The table below summarises the maturity profile of the financial liabilities of the Company based on remaining expected undiscounted contractual obligations: 2020 Up toone year More thanone year Total SR’000 Accrued and other liabilities 540,450 135,600 676,050Insurance operations’ surplus payable 200,391 -- 200,391Reinsurers' balances payable 4,873 -- 4,873Outstanding claims 446,519 -- 446,519Claims incurred but not reported 1,378,294 -- 1,378,294Premium deficiency Reserve 263,751 -- 263,751Claims handling reserve 20,755 -- 20,755Due to related parties 108,521 -- 108,521Provision for end-of-service benefits (EOSB) 13,746 126,266 140,012Provision for zakat and income tax 83,951 233,248 317,199Accrued income payable to SAMA -- 13,806 13,806 3,061,251 508,920 3,570,171 2019 Up toone year More thanone year Total SR’000 Accrued and other liabilities 380,425 68,262 448,687Insurance operations’ surplus payable 168,454 -- 168,454Reinsurers' balances payable 54,413 -- 54,413Outstanding claims 451,788 -- 451,788Claims incurred but not reported 1,157,428 -- 1,157,428Claims handling reserve 18,492 -- 18,492Due to related parties 78,848 -- 78,848Provision for end-of-service benefits (EOSB) 16,043 80,298 96,341Provision for zakat and income tax 49,978 224,731 274,709Accrued income payable to SAMA -- 10,820 10,820 2,375,869 384,111 2,759,980Liquidity profile All assets excluding investments, Fixtures, Furniture and Right-of-use assets, intangible assets, goodwill, statutory deposit and accrued income on statutory deposit, are expected to be recovered or settled before one year. Term deposits amounting to SR 1,680 million (31 December 2019: SR 3,324 million) mature within one year and the remaining balance have maturities greater than one year.None of the financial liabilities on the statement of financial position are based on discounted cash flows, with exception of end-of-service benefits and are all payable on a basis as set out above. There are no differences between contractual and expected maturity of the financial liabilities of the Company. | |
| Disclosure of operational/ process risk [text block] | Operation risk Operational 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 factors other than credit, market and liquidity risks such as those arising from regulatory requirements. 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, and the adequacy of controls and procedures to address those risks;- Ethical and business standards; and- Risk mitigation policies and procedures. | |
| Disclosure of fair value of financial assets and liabilities [text block] | FAIR VALUE 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 between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction takes place either:- in the accessible principal market for the asset or liability, or- in the absence of a principal market, in the most advantageous accessible market for the asset or liability.a) 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 prices in active markets for the same or identical instrument that an entity can access at the measurement date;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; andLevel 3: valuation techniques for which any significant input is not based on observable market data.b) Carrying amounts and fair valueThe following table shows the carrying amount and fair value of financial assets, 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. There were no transfers in between levels during the year ended December 31, 2020 and 2019. Fair value Level 1 Level 2 Level 3 Total Carrying value SR’0002020 Financial assets measured at fair value - Investments held as FVSI -- 3,694,761 -- 3,694,761 3,694,761 - Available for sale investments 1,404,736 793,074 5,625 2,203,435 2,203,435 1,404,736 4,487,835 5,625 5,898,196 5,898,196 Fair value Level 1 Level 2 Level 3 Total Carrying value SR’0002019 Financial assets measured at fair value - Investments held as FVSI 990 268,526 -- 269,516 269,516- Available for sale investments 883,099 556,967 -- 1,440,066 1,440,066 884,089 825,493 -- 1,709,582 1,709,582c) Measurement of fair valueValuation technique and significant unobservable inputsThe following table shows the valuation techniques used in measuring Level 2 fair value at 31 December 2020 and 31 December 2019, as well as the significant unobservable inputs used. Type Valuation technique Significant unobservable inputs Inter-relationship between significant unobservable inputs and fair value measurement Floating rate sukuks and mutual funds Valuations are based on quotations as received by the custodians at the end of each period and on published net asset value (NAV) closing prices. Not applicable Not applicable | |
| Disclosure of comparative figures [text block] | COMPARATIVE FIGURESCertain comparative figures have been reclassified and regrouped to conform with the current year’s presentation to these financial statements | |
| Disclosure of board of director's approval of the financial statements [text block] | The financial statements have been approved by the Board of Directors, on 23 Rajab 1442H corresponding to 07 March 2021. | |
| Disclosure of other notes relevant to understanding of financial statements [text block] | GOODWILLOn 31 December 2008, the Company entered into an agreement with Bupa Middle East Limited E.C. (the “Seller”), a related party, pursuant to which it acquired the Seller’s insurance operations in the Kingdom of Saudi Arabia, effective from 1 January 2009. The acquisition transaction was approved by SAMA and resulted in goodwill of SR 98 million. The entire amount was paid in the previous years, to the Seller, after obtaining the required regulatory approvals.In accordance with the requirements of International Financial Reporting Standards, the Company’s management annually carry out an annual impairment test in respect of the above-mentioned goodwill. Management conducted the impairment exercise for the year ended 31 December 2020. The recoverable amount of operations has been determined based on value in use. The two key assumptions used in the test are the discount rate and estimated future cash flows from the business as follows: An average discount rate of 10.1 was used to discount future cash flows. EBTIDA growth rate of 10.8% was used for the first three years. Thereafter, a growth rate of 3% was used in the terminal value calculation. A change in discount rate by 300 basis point with other variables held constant would not result in impairment of goodwill. INTANGIBLE ASSETS Software Capital work in progress Total 2020 SR’000Cost: At 1 January 2020 128,316 8,262 136,578Additions during the year 1,453 19,991 21,444Transfers during the year 9,769 (9,769) --At 31 December 2020 139,538 18,484 158,022 Accumulated amortisation: At 1 January 2020 (80,333) -- (80,333)Charge for the year (15,731) -- (15,731)At 31 December 2020 (96,064) -- (96,064) Net book value: At 31 December 2020 43,474 18,484 61,958 2019 SR’000 Cost: At 1 January 2019 83,447 36,583 120,030Additions during the year -- 16,548 16,548Transfers during the year 44,869 (44,869) --At 31 December 2019 128,316 8,262 136,578 Accumulated amortisation: At 1 January 2019 (62,757) -- (62,757)Charge for the year (17,576) -- (17,576)Disposal during the year -- -- --At 31 December 2019 (80,333) -- (80,333) Net book value: At 31 December 2019 47,983 8,262 56,245FIDUCIARY ASSETS During the year ended 31 December 2018, after obtaining SAMA’s approval, the Company entered into a Third Party Administration agreement (TPA) with a customer under which the Company facilitates healthcare services to the employees of the customer with specific terms and conditions. The agreement is effective from 1 March 2018. The services are remunerated against administration fees. In order to fulfil the commitment relating to this agreement, the Company has received funds in advance from the customer to settle anticipated claims from medical service providers. As the Company acts as an agent, the relevant bank balance and outstanding claims at the reporting date are excluded from the statement of financial position. The assets and liabilities held in fiduciary capacity amounted to SR 317.1 million as of 31 December 2020 (2019: SR 272.9 million).Statement of Financial Position 2020 2019 Insurance operations Shareholders’ operations Total Insurance operations Shareholders’ operations Total SR’000 SR’000 SR’000 SR’000 SR’000 SR’000ASSETS Cash and cash equivalents 195,232 438,019 633,251 446,942 218,767 665,709 Premiums receivables – net 1,320,043 -- 1,320,043 1,689,377 -- 1,689,377Reinsurers’ share of unearned premiums 20,108 -- 20,108 20,625 -- 20,625Reinsurers’ share of outstanding claims 1,475 -- 1,475 1,218 -- 1,218Reinsurers’ share of claims Incurred but not reported 6,461 -- 6,461 3,972 -- 3,972Deferred policy acquisition costs 68,214 -- 68,214 134,022 -- 134,022Investments 3,568,181 2,461,265 6,029,446 725,551 1,115,281 1,840,832Prepaid expenses and other assets 118,404 40,056 158,460 222,424 54,219 276,643 Term deposits 1,598,055 1,125,118 2,723,173 3,347,965 1,716,011 5,063,976 Fixtures, Furniture and Right-of-use assets – net -- 204,019 204,019 -- 169,441 169,441 Intangible assets – net -- 61,958 61,958 -- 56,245 56,245Deferred tax asset -- 37,941 37,941 -- 30,216 30,216Goodwill -- 98,000 98,000 -- 98,000 98,000 Statutory deposit -- 120,000 120,000 -- 120,000 120,000 Accrued income on statutory deposit -- 13,806 13,806 -- 10,820 10,820 TOTAL ASSETS 6,896,173 4,600,182 11,496,355 6,592,096 3,589,000 10,181,096 . 2020 2019 Insurance operations Shareholders’ operations Total Insurance operations Shareholders’ operations Total SR’000 SR’000 SR’000 SR’000 SR’000 SR’000LIABILITIES Accrued and other liabilities 534,201 141,849 676,050 352,798 95,889 448,687Insurance operations’ surplus payable 200,391 -- 200,391 168,454 -- 168,454Reinsurers’ balances payable 4,873 -- 4,873 54,413 -- 54,413Unearned premiums 4,023,331 -- 4,023,331 4,376,219 -- 4,376,219Outstanding claims 446,519 -- 446,519 451,788 -- 451,788Claims incurred but not reported 1,378,294 -- 1,378,294 1,157,428 -- 1,157,428Premium deficiency Reserve 263,751 -- 263,751 -- -- --Claims handling reserve 20,755 -- 20,755 18,492 -- 18,492Due to related parties -- 108,521 108,521 -- 78,848 78,848Provision for end-of-service benefits (EOSB) -- 140,012 140,012 -- 96,341 96,341Provision for zakat and income tax -- 317,199 317,199 -- 274,709 274,709Accrued income payable to SAMA -- 13,806 13,806 -- 10,820 10,820TOTAL LIABILITIES 6,872,115 721,387 7,593,502 6,579,592 556,607 7,136,199 EQUITY Share capital -- 1,200,000 1,200,000 -- 1,200,000 1,200,000Statutory reserve -- 867,096 867,096 -- 727,871 727,871Share based payments -- 32,800 32,800 -- 25,525 25,525Shares held under employees share scheme -- (48,779) (48,779) -- (57,538) (57,538)Retained earnings -- 1,684,003 1,684,003 -- 1,128,973 1,128,973Re-measurement reserve of end-of-service benefits -- (31,173) (31,173) -- (10,473) (10,473)Investments fair value reserve 24,058 174,848 198,906 12,504 18,035 30,539TOTAL EQUITY 24,058 3,878,795 3,902,853 12,504 3,032,393 3,044,897TOTAL LIABILITIES AND EQUITY 6,896,173 4,600,182 11,496,355 6,592,096 3,589,000 10,181,096 Statement of Income 2020 2019 Insurance operations Share-holders’ operations Total Insurance operations Share-holders’ operations Total SR’000 SR’000 SR’000 SR’000 SR’000 SR’000REVENUES Gross premiums written 10,447,353 -- 10,447,353 10,410,868 -- 10,410,868Reinsurance premiums ceded – Local (5,953) -- (5,953) (10,377) -- (10,377)Reinsurance premiums ceded – International (59,289) -- (59,289) (95,417) -- (95,417)Net premiums written 10,382,111 -- 10,382,111 10,305,074 -- 10,305,074Changes in unearned premiums – net 352,371 -- 352,371 (933,783) -- (933,783)Net premiums earned 10,734,482 -- 10,734,482 9,371,291 -- 9,371,291 UNDERWRITING COSTS AND EXPENSES Gross claims paid (8,262,050) -- (8,262,050) (7,655,078) -- (7,655,078)Reinsurers’ share of claims paid 20,987 -- 20,987 58,632 -- 58,632Net claims paid (8,241,063) -- (8,241,063) (7,596,446) -- (7,596,446)Changes in outstanding claims 5,269 -- 5,269 103,370 -- 103,370Changes in claims incurred but not reported (220,866) -- (220,866) (259,305) -- (259,305)Changes in Premium deficiency Reserve (263,751) -- (263,751) -- -- --Changes in claims handling reserves (2,263) -- (2,263) 908 -- 908Reinsurance share of changes in outstanding claims 257 -- 257 882 -- 882Reinsurance share of changes in claims incurred but not reported 2,489 -- 2,489 1,294 -- 1,294Net claims incurred (8,719,928) -- (8,719,928) (7,749,297) -- (7,749,297)Policy acquisition costs (630,734) -- (630,734) (463,542) -- (463,542)TOTAL UNDERWRITING COSTS AND EXPENSES (9,350,662) -- (9,350,662) (8,212,839) -- (8,212,839) NET UNDERWRITING INCOME 1,383,820 -- 1,383,820 1,158,452 -- 1,158,452 2020 2019 Insurance operations Share-holders’ operations Total Insurance operations Share-holders’ operations Total SR’000 SR’000 SR’000 SR’000 SR’000 SR’000OTHER OPERATING (EXPENSES)/ INCOME Allowance for doubtful receivables (28,770) -- (28,770) (31,907) -- (31,907)General and administrative expenses (565,199) (20,350) (585,549) (480,457) (10,544) (491,001)Selling and marketing expenses (106,467) -- (106,467) (109,856) -- (109,856)Investment income – net 121,788 91,507 213,295 137,264 97,741 235,005 Other income/(loss) – net (3,762) 31,243 27,481 (5,155) 23,950 18,795Total Other Operating (Expenses)/ Income (582,410) 102,400 (480,010) (490,111) 111,147 (378,964) Income before Surplus, Zakat & Income Tax 801,410 102,400 903,810 668,341 111,147 779,488 Transfer of surplus to shareholders (721,269) 721,269 -- (601,507) 601,507 -- Income Attributed To The Shareholders Before Zakat And Income Tax 80,141 823,669 903,810 66,834 712,654 779,488Zakat charge -- (64,297) (64,297) -- (57,821) (57,821)Income tax charge -- (63,244) (63,244) -- (61,036) (61,036)NET INCOME ATTRIBUTED TO THE SHAREHOLDERS AFTER ZAKAT AND INCOME TAX 80,141 696,128 776,269 66,834 593,797 660,631 Weighted average number of ordinary outstanding shares (in thousands) 119,421 119,548 Basic and diluted earnings per share (Expressed in SR per Share) 5.83 4.97 Statement of Comprehensive Income 2020 2019 Insurance operations Share-holders’ operations Total Insurance operations Share-holders’ operations Total SR’000 SR’000 SR’000 SR’000 SR’000 SR’000 Net income attributed to the shareholders after zakat and income tax 80,141 696,128 776,269 66,834 593,797 660,631 Other comprehensive income Items that will not be reclassified to statements of income in subsequent years Re-measurement losses on employees’ EOSB -- (20,700) (20,700) -- (1,551) (1,551) Items that are or may be reclassified to statement of income in subsequent years Net movement in fair value of available for sale investments 11,554 156,813 168,367 21,093 39,977 61,070 TOTAL COMPREHENSIVE INCOME 91,695 832,241 923,936 87,927 632,223 720,150 Reconciliation: Less: Net income attributable to insurance operations transferred to surplus payable (80,141) (66,834) TOTAL COMPREHENSIVE INCOME FOR THE YEAR 843,795 653,316 2020 2019 Insurance operations Share-holders’ operations Total Insurance operations Share-holders’ operations Total SR’000 SR’000 SR’000 SR’000 SR’000 SR’000CASH FLOWS FROM OPERATING ACTIVITIES Net income attributed to the shareholders before zakat and income tax -- 823,669 823,669 -- 712,654 712,654 Adjustments for non-cash items: Net income attributed to the insurance operations 80,141 -- 80,141 66,834 -- 66,834Depreciation and amortisation of Fixtures, Furniture and Right-of-use assets 31,507 -- 31,507 30,640 -- 30,640Amortisation of intangible assets 15,731 -- 15,731 17,576 -- 17,576Gain on disposal of Fixtures and Furniture -- -- -- -- (1) (1)Provision for LTIP 16,034 16,034 -- 15,814 15,814Allowance of doubtful receivables provision 28,770 -- 28,770 31,907 -- 31,907Unrealised (gains) / losses on investments held as FVSI (1,058) 182 (876) (11,191) (1,554) (12,745)Provision for end-of-service benefits -- 27,294 27,294 -- 19,481 19,481Finance cost -- 5,244 5,244 -- 5,223 5,223Changes in operating assets and liabilities: Premiums receivable 340,564 -- 340,564 (770,613) -- (770,613)Reinsurers’ share of unearned premiums 517 -- 517 (14,305) -- (14,305)Reinsurers’ share of outstanding claims (257) -- (257) (882) -- (882)Reinsurers’ share of claims incurred but not reported (2,489) -- (2,489) (1,294) -- (1,294)Deferred policy acquisition costs 65,808 -- 65,808 (15,699) -- (15,699)Prepaid expenses and other assets 104,020 14,163 118,183 (53,558) (20,100) (73,658)Accrued and other liabilities 181,403 689 182,092 71,774 775 72,549Reinsurers’ balances payable (49,540) -- (49,540) 3,777 -- 3,777Unearned premiums (352,888) -- (352,888) 948,088 -- 948,088Outstanding claims (5,269) -- (5,269) (103,370) -- (103,370)Claims incurred but not reported 220,866 -- 220,866 259,305 -- 259,305Premium deficiency Reserve 263,751 -- 263,751 -- -- --Claims handling reserve 2,263 -- 2,263 (908) -- (908)Due to related parties -- 27,800 27,800 -- 43,884 43,884Due to shareholders’ operations (47,239) 47,239 -- (48,218) 48,218 -- 876,601 962,314 1,838,915 409,863 824,394 1,234,257End-of-service benefits paid -- (4,323) (4,323) -- (6,086) (6,086)Surplus paid to policyholders (48,204) -- (48,204) (38,135) -- (38,135)Zakat and income tax paid -- (92,776) (92,776) -- (48,596) (48,596)Net cash generated from operating activities 828,397 865,215 1,693,612 371,728 769,712 1,141,440 Statement of Cash flows 2020 2019 Insurance operations Share-holders’ operations Total Insurance operations Share-holders’ operations Total SR’000 SR’000 SR’000 SR’000 SR’000 SR’000 CASH FLOWS FROM INVESTING ACTIVITIES Placement in term deposits (488,850) (300,000) (788,850) (2,476,565) (1,160,924) (3,637,489)Proceeds from maturity of term deposits 2,238,760 890,893 3,129,653 2,162,343 1,126,451 3,288,794 Additions to investments (9,765,721) (3,983,139) (13,748,860) (2,037,449) (1,664,712) (3,702,161)Disposals of investments 6,935,704 2,793,785 9,729,489 2,154,358 1,402,277 3,556,635 Additions to Fixtures, Furniture and Right-of-use assets -- (11,840) (11,840) -- (15,765) (15,765)Disposal of Fixtures, Furniture and Right-of-use assets -- -- -- -- 124 124Intangible assets acquired -- (21,444) (21,444) -- (16,548) (16,548)Increase in statutory deposit -- -- -- -- -- --Net cash used in investing activities (1,080,107) (631,745) (1,711,852) (197,313) (329,097) (526,410) CASH FLOWS FROM FINANCING ACTIVITIES Dividends paid -- -- -- -- (180,000) (180,000)Lease liability paid -- (14,218) (14,218) -- (26,990) (26,990)Purchase of shares under LTIP -- -- -- -- (32,744) (32,744) Net cash used in financing activities -- (14,218) (14,218) -- (239,734) (239,734) Net change in cash and cash equivalents (251,710) 219,252 (32,458) 174,415 200,881 375,296Cash and cash equivalents at beginning of the year 446,942 218,767 665,709 272,527 17,886 290,413Cash and cash equivalents at end of the year 195,232 438,019 633,251 446,942 218,767 665,709IMPACT OF COVID-19 COMPENSATION FOR GOVERNMENT PROVIDERS (continued) After Saudi Arabia easing COVID-19 lockdown and curfew measures towards the end of second quarter of 2020, demand for healthcare services gradually recovered during the second half of the year after the substantial drop in the second quarter earlier in the year. This resulted in a noticeable increase in incurred claims from June through December, with current levels exceeding those that existed pre-Covid. The Company expects this pattern to persist over the next few months as more untreated and deferred medical conditions find their way through the provider network. The propensity of a particular type of claim to be deferred depends on the nature of the medical condition and the types of diagnostic investigations and treatments associated with it. Compensation for Government Providers The Council of Cooperative Health Insurance (“CCHI”) recently issued Circular 895, dated 17/12/2020, regarding the enforcement of Article 11 of the Cooperative Health Insurance Law, requesting medical insurance companies, effective 1/1/2021, to include all accredited government healthcare providers in their medical network while complying with the approved financial compensation structure. The circular is expected to have a material impact on future medical claims considering the mandated prices and protocols regulating the relationship between government health facilities and insurance companies. Given the many uncertainties surrounding the actual rollout and application of Circular 895, management continues monitoring the situation closely, while reassessing and updating its estimates and judgments on a regular basis. SAMA’s Circular 173SAMA’s circular 173, dated 16/01/2019, requires insurance companies to hold a Premium Deficiency Reserve (“PDR”) in case the relevant Unearned Premium Reserve (“UPR”) is insufficient to cover related projected claims and expenses. When a premium deficiency exists, the amount of the deficiency must first be offset against any Deferred Acquisition Costs (“DAC”). Any remaining deficiency not absorbed by DAC is accrued for as a separate premium deficiency reserve. To adequately meet the future insurance liabilities of the unexpired risk after considering the impact of COVID-19 and Circular 895, the Company recognized a PDR of SR 263.75 million as at 31 December 2020 (2019: Nil). | |
| Disclosure of fees and commission income [text block] | TRADEMARK FEES During 2010, the Company entered into an agreement with a related party (a Group Company) for obtaining a license to use the trademark (the word Bupa with or without logo) of the related party. As per the terms of the agreement, the trademark fee is payable at different rates linked to the results of the Company, subject to a maximum of 5% of the Company’s profits in any financial year, as trade-mark fees. Accordingly, a sum of SR 26.9 million (2019: SR 23.6 million) payable to a related party has been accrued for during the year (see notes 24 and 32). | |
