| 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] | Bupa 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 approves the distribution of the 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 on insurance operations is transferred to the shareholders’ operations in full. | 1 |
| Disclosure of basis of preparation of financial statements [text block] | The interim condensed financial statements of the Company have been prepared in accordance with ‘International Accounting Standard 34 - Interim Financial Reporting ("IAS 34") as endorsed in the Kingdom of Saudi Arabia and other standards and pronouncement issued by Saudi Organisation for Certified Public Accountants (“SOCPA”). | 2.A |
| 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 20 to these interim financial statements provides the interim statement of financial position, interim statements of income, interim comprehensive income and interim cash flows of the insurance operations and shareholders operations, separately.The interim condensed financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with the annual financial statements as of and for the year ended 31 December 2020. The interim condensed financial statements may not be considered indicative of the expected results for the full year.These interim condensed financial statements are expressed in Saudi Arabian Riyals (SAR) and are rounded off to the nearest thousand. | 2.A |
| Disclosure of new standards and amendments in standards [text block] | New IFRS Standards, IFRIC interpretations and amendments thereof, adopted by the Company Interest Rate Benchmark Reform – Phase 2: Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16The amendments provide temporary reliefs which address the financial reporting effects when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR). The amendments include the following practical expedients: A practical expedient to require contractual changes, or changes to cash flows that are directly required by the reform, to be treated as changes to a floating interest rate, equivalent to a movement in a marketrate of interest Permit changes required by IBOR reform to be made to hedge designations and hedge documentation without the hedging relationship being discontinued Provide temporary relief to entities from having to meet the separately identifiable requirement when an RFR instrument is designated as a hedge of a risk componentThese amendments had no impact on the interim condensed financial statements of the Company.The Company intends to use the practical expedients in future periods if they become applicable. | 3.A |
| Disclosure of issued IFRS not yet adopted [text block] | Standards issued but not yet effective up to the date of issuance of the Company’s interim condensed 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 date IFRS 17 Insurance Contracts See note belowIFRS 9Amendments to IAS 37 Financial InstrumentsOnerous contracts – Cost of Fulfilling a contract See note below1 January 2023 IFRS 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 consists of: 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 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 of consists of the FCF related to future services and the CSM of the group at that date; and 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;1) changes in the entity’s share of the fair value of underlying items, and2) 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 1 January 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 select either a modified retrospective approach or a fair value approach.Presentation and DisclosuresThe Company expects that the new standard will result in a change to the accounting policies for insurance contracts together with amendments to presentation and disclosures.ImpactThe Company 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 Area Summary of Impact Financial Impact The financial impact of applying IFRS 17 compared to IFRS 4 was not significant 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 will need to establish new processes to ensure that required line items and additional breakdowns are fed into downstream systems to create the required presentations and disclosures. Impact on RI Arrangements The Company’s reinsurance arrangements are 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 internal control functions. IFRS 9 - Financial Instruments This standard was published on 24 July 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:1) the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and2) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding (“SPPI”).The financial asset is measured at fair value through other comprehensive income and realized gains or losses would be recycled through profit or loss upon sale, if both conditions are met:1) the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows and for sale; and2) 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 1 January 2018. However, amendments to IFRS 4 – Insurance Contracts: Applying IFRS 9 – Financial Instruments with IFRS 4 – Insurance Contracts, published on 12 September 2016, changes the existing IFRS 4 to allow entities issuing insurance contracts within the scope of IFRS 4 to mitigate certain effects of applying IFRS 9 before the IASB’s new insurance contract standard (IFRS 17 – Insurance Contracts) becomes effective. The amendments introduce two alternative options:1) apply a temporary exemption from implementing IFRS 9 until the earlier of:A- the effective date of a new insurance contract standard; orB- annual reporting periods beginning on or after 1 January 2023. Additional disclosures related to financial assets are required during the deferral period. This option is only available to entities whose activities are predominately connected with insurance and have not applied IFRS 9 previously; or;2) adopt IFRS 9 but, for designated financial assets, remove from profit or loss the effects of some of the accounting mismatches that may occur before the new insurance contract standard is implemented. During the interim period, additional disclosures are required.The Company has performed a detailed assessment beginning 1 January 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.Impact assessmentAs at June 30, 2021, the Company has total financial assets and insurance related assets amounting to SR 8,683 million and SR 3,487 million, respectively. Financial assets mainly represent: Cash and cash equivalents, Held to maturity investments, Term deposits and designated sukuks amounting to SR 2,255 million (2020: SR 2,854 million). FVIS amounting to SR 4,257 million (2020: SR 3,695 million). Other financial assets, including available for sale investments amounting to SR 2,171 million (2020: SR 2,203 million). The Company is still finalizing its assessment to measure the impact of applying and implementing IFRS 9. The Company, however, doesn’t expect IFRS 9 to have a material impact on the classification and measurement of financial assets. | 3.B |
| Disclosure of critical accounting judgements, estimates and assumptions, general [text block] | The preparation of interim condensed financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses and the accompanying notes disclosures including disclosure of contingent liabilities. Actual results may differ from these estimates.In preparing these interim condensed financial statements, the significant judgments made by management in applying the Company’s accounting policies, and the key sources of estimating uncertainty including the risk management policies, were the same as those that applied to the annual financial statements as at and for the year ended 31 December 2020. However, the Company has reviewed the key sources of estimating uncertainties disclosed in the last annual financial statements against the backdrop of the COVID-19 pandemic and implications of the Council of Cooperative Health Insurance’s (“CCHI”) recently issued Circular 895 of article 11. For further details, please see note 22 to these interim condensed financial statements. Management will continue to assess the situation, and reflect any required changes in future reporting periods. | 2.B |
| Disclosure of going concern [text block] | The interim condensed financial statements are prepared under the going concern basis and the historical cost convention, except for the measurement of investments at their fair value through statement of income (FVSI) and available-for-sale investments and liabilities for cash-settled-share based payments and defined benefit obligations [Employees’ end of service benefits (“EOSBs”)] recorded at the present value. The Company’s interim statement of financial position is presented in order of liquidity. Except for available-for-sale investments, fixtures, furniture and Right-of-use assets, intangible assets, goodwill, statutory deposit, accrued income on statutory deposit, provision for end-of-service benefits and accrued income payable to SAMA, all other assets and liabilities are of short-term nature, unless, stated otherwise. | 2.A |
| Disclosure of other general disclosures about reporting entity [text block] | During the year ended 31 December 2018, after obtaining SAMA’s approvals, the Company entered into a Third Party Administration agreement (TPA) with a customer under which the Company facilitates healthcare services to its employees 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 interim statement of financial position. The assets and liabilities held in fiduciary capacity amounted to SR 114 million as of 30 June 2021 (31 December 2020: SR 317.1 million). | 10 |
| Disclosure of summary of significant accounting policies [abstract] | | |
| Description of accounting policy for seasonality of operations [text block] | Due to the seasonality of operations, operating profits are expected to fluctuate from one period to another. | 2.C |
| Disclosure of notes forming part of accounts [abstract] | | |
| Disclosure of investments [text block] | Investments are classified as follows: 30 June 2021 (Unaudited) 31 December 2020 (Audited) Insurance operations Shareholders’ operations Total Insurance operations Shareholders’ operations Total SAR’000 Held as FVSI 3,108,375 1,148,337 4,256,712 2,869,628 825,133 3,694,761Available-for-sale 725,864 1,444,943 2,170,807 698,553 1,504,882 2,203,435Held to maturity 100,000 231,250 331,250 -- 131,250 131,250 3,934,239 2,824,530 6,758,769 3,568,181 2,461,265 6,029,446(i) Investments held as FVSI comprise of the following: 30 June 2021 (Unaudited) Insurance operations Shareholders’ operations Domestic International Domestic International Total SR’000 Sukuks 18,025 -- 55,079 -- 73,104 Funds 3,082,970 7,380 1,071,118 22,140 4,183,608 3,100,995 7,380 1,126,197 22,140 4,256,712 31 December 2020 (Audited) 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(ii) Available-for-sale investments comprise of the following: 30 June 2021 (Unaudited) Insurance operations Shareholders’ operations Domestic International Domestic International Total SR’000 Sukuks 475,520 213,057 757,315 122,965 1,568,857Funds -- 37,287 109,635 11,628 158,550Equities -- -- 331,130 5,625 336,755Investments in discretionary portfolios -- -- 106,645 -- 106,645 475,520 250,344 1,304,725 140,218 2,170,807 31 December 2020 (Audited) Insurance operations Shareholders’ operations Domestic International Domestic International Total SR’000 Sukuks 422,351 238,029 900,236 147,710 1,708,326Funds -- 38,173 107,501 7,111 152,785Equities -- -- 228,716 5,625 234,341Investments in discretionary portfolios -- -- 107,983 -- 107,983 422,351 276,202 1,344,436 160,446 2,203,435(iii) Held to maturity investments comprise of the following: 30 June 2021 (Unaudited) Insurance operations Shareholders’ operations Domestic International Domestic International Total SR’000 Sukuks 100,000 -- 231,250 -- 331,250 100,000 -- 231,250 -- 331,250 31 December 2020 (Audited) 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: 30 June 2021 (Unaudited) Insurance operations Shareholders’operations Total SAR‘000 Balance at the beginning of the period 3,568,181 2,461,265 6,029,446Purchased during the period 4,844,337 4,387,830 9,232,167Disposed during the period (4,472,687) (4,110,822) (8,583,509)Unrealized (losses) / gain during the period, net (5,592) 86,257 80,665 3,934,239 2,824,530 6,758,769 31 December 2020 (Audited) Insurance operations Shareholders’operations Total SAR‘000 Balance at the beginning of the year 725,551 1,115,281 1,840,832Purchased during the year 9,765,721 3,983,139 13,748,860Disposed during the year (6,935,704) (2,793,785) (9,729,489)Unrealized gain during the year, net 12,613 156,630 169,243 3,568,181 2,461,265 6,029,446 | 6 |
| Disclosure of investments held-to-maturity [text block] | Term deposits are held with reputable commercial banks and financial institutions. These deposits are predominately in Murabaha structure with a small allocation in Mudaraba structure. They are mostly denominated in Saudi Arabian Riyals and have an original maturity ranging from more than three months to more than one year (2020: three months to more than one year) and yield financial income at rates ranging from 0.30% to 4.30% per annum (2020: 1.20% to 4.30% per annum). The movement in term deposits during the period ended 30 June 2021 is as follows: 30 June 2021 (Unaudited) Insurance operations Shareholders’operations Total SAR‘000 Balance at the beginning of the period 1,598,055 1,125,118 2,723,173Matured during the period (1,003,055) (332,000) (1,335,055)Placed during the period 436,000 100,000 536,000 1,031,000 893,118 1,924,118 31 December 2020 (Audited) Insurance operations Shareholders’operations Total SAR‘000 Balance at the 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 | 7 |
| Disclosure of premiums/ contributions and insurance/ reinsurance or takaful/ retakaful balance receivables [text block] | Receivable amounts are due from the following: 30 June 2021 (Unaudited) 31 December 2020(Audited) SAR’000 SAR’000 Policyholders 1,503,124 1,159,253Brokers 962,274 383,314Related parties (note 14) 2,393 -- 2,467,791 1,542,567Provision for doubtful receivables (246,193) (222,524)Premiums receivable – net 2,221,598 1,320,043 | 5 |
| Disclosure of cash and cash equivalents [text block] | Cash and cash equivalents consists of the following: 30 June 2021 (Unaudited) Insurance operations Shareholders’ operations Total SAR‘000Bank balances 62,962 667,602 730,564 62,962 667,602 730,564 31 December 2020 (Audited) Insurance operations Shareholders’ operations Total SAR‘000 Bank balances 195,232 438,019 633,251 195,232 438,019 633,251The amount payable to/receivable from shareholders’ operations is settled by transfer of cash at each reporting date. During the six-months period ended 30 June 2021, the insurance operations transferred cash of SR 238.7 million to the shareholders’ operations (31 December 2020: SR 142 million). | 4 |
| Disclosure of statutory deposit [text block] | As required by SAMA Insurance Regulations, the Company deposited an amount equivalent to 10% of its paid-up share capital, amounting to SR 120 million, in a bank designated by SAMA. Accrued income on this deposit is payable to SAMA amounting to SR 14.4 million (2020: SR 13.8 million) and this deposit cannot be withdrawn without approval from SAMA. | 8 |
| Disclosure of zakat [text block] | Breakup of zakat and income tax charge for the six-month period ended 30 June 2021 and 2020 are as follows: six-months period ended 30 June 2021 (Unaudited) six-months period ended 30 June 2020 (Unaudited) SAR’000 SAR’000 Current zakat charge 35,633 35,465 Current tax charge 46,660 45,635Deferred tax charge (note 15.a) (1,125) (27) 45,535 45,608 81,168 81,073a) The reconciliation of deferred tax is as follows: 30 June 2021 31 December 2020 30 June 2020 SAR’000 SAR’000 SAR’000 Opening deferred tax asset 37,941 30,216 30,216Deferred tax (charge) / income 1,125 7,725 27 39,066 37,941 30,243Movements in the Zakat and income tax accrued during the period ended 30 June 2021 and year ended 31 December 2020 respectively are as follows: Zakat payable Income taxpayable Total 30 June 2021 (Unaudited) Total31 December2020 (Audited) SAR’000 SAR’000 SAR’000 SAR’000 Balance at beginning of the period/year 285,448 31,751 317,199 274,709Provided during the period/year 35,633 46,660 82,293 135,266Payments during the period/year (123,765) (45,865) (169,630) (92,776)Balance at end of the period/year 197,316 32,546 229,862 317,199Status of assessments The Company has filed its zakat and income tax returns for the financial years up to and including the year 2020 with the Zakat, Tax and Custom Authority. 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 reached a settlement with Zakat, Tax and Custom Authority 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 year, and, hence, there is no significant financial impact on the company. For the year 2017 assessments, the company has escalated the matter to the General Secretariat of Tax Committees (the “GSTC”). | 15 |
| Disclosure of income tax [text block] | Breakup of zakat and income tax charge for the six-month period ended 30 June 2021 and 2020 are as follows: six-months period ended 30 June 2021 (Unaudited) six-months period ended 30 June 2020 (Unaudited) SAR’000 SAR’000 Current zakat charge 35,633 35,465 Current tax charge 46,660 45,635Deferred tax charge (note 15.a) (1,125) (27) 45,535 45,608 81,168 81,073a) The reconciliation of deferred tax is as follows: 30 June 2021 31 December 2020 30 June 2020 SAR’000 SAR’000 SAR’000 Opening deferred tax asset 37,941 30,216 30,216Deferred tax (charge) / income 1,125 7,725 27 39,066 37,941 30,243Movements in the Zakat and income tax accrued during the period ended 30 June 2021 and year ended 31 December 2020 respectively are as follows: Zakat payable Income taxpayable Total 30 June 2021 (Unaudited) Total31 December2020 (Audited) SAR’000 SAR’000 SAR’000 SAR’000 Balance at beginning of the period/year 285,448 31,751 317,199 274,709Provided during the period/year 35,633 46,660 82,293 135,266Payments during the period/year (123,765) (45,865) (169,630) (92,776)Balance at end of the period/year 197,316 32,546 229,862 317,199Status of assessments The Company has filed its zakat and income tax returns for the financial years up to and including the year 2020 with the Zakat, Tax and Custom Authority. 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 reached a settlement with Zakat, Tax and Custom Authority 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 year, and, hence, there is no significant financial impact on the company. For the year 2017 assessments, the company has escalated the matter to the General Secretariat of Tax Committees (the “GSTC”). | 15 |
| Disclosure of classes of share capital [text block] | The authorised, issued and paid-up capital of the Company is SAR 1,200 at 30 June 2021 (31 December 2020: SAR 1,200 million) consisting of 120 million shares (31 December 2020: 120 million shares) of SAR 10 each. Shareholding structure of the Company is as below: 30 June 2021 (Unaudited) 31 December 2020(Audited) 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% 1,200,000 100.0% 1,200,000 | 16 |
| 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 carry out this transfer on an annual basis at 31 December. As at 30 June 2021, SR 867.1 million (31 December 2020: SR 867.1 million) had been set aside as a statutory reserve, representing 72% (31 December 2020: 72%) of the paid-up share capital. | 17 |
| Disclosure of technical reserve for insurance/takaful/reinsurance/retakaful operations [text block] | 1 Movement in unearned premiumsMovements in unearned premiums are as follows: Six-month ended 30 June 2021 (Unaudited) Gross Reinsurance Net SAR‘000 Balance at 1 January 2021 4,023,331 (20,108) 4,003,223Premium written/(ceded) during the period 5,822,498 (41,456) 5,781,042Premium earned during the period (5,103,905) 36,969 (5,066,936) 4,741,924 (24,595) 4,717,329 Year ended 31 December 2020 (Audited) Gross Reinsurance Net SAR‘000 Balance at 1 January 2020 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) 4,003,2232 Net outstanding claims and reservesNet outstanding claims and other technical reserves consist of the following: 30 June 2021(Unaudited) 31 December 2020(Audited) SAR’000 SAR’000 Outstanding claims 555,834 446,519 Claims incurred but not reported 1,247,882 1,378,294 Premium deficiency reserve 178,041 263,751Claims handling reserves 20,216 20,755 2,001,973 2,109,319Less: - Reinsurers’ share of outstanding claims (4,370) (1,475)- Reinsurers’ share of claims incurred but not reported (6,540) (6,461) (10,910) (7,936)Net outstanding claims and reserves 1,991,063 2,101,383 | 9 |
| Disclosure of earnings per share [text block] | The basic and diluted earnings per share has been calculated by dividing net income after zakat and income tax for the period by the weighted average number of ordinary shares issued and outstanding at the period end. | 19 |
| Disclosure of related party transactions [text block] | Related 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 are 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 period and their related balances:Related party Nature of transaction Amount of transactions for the period ended Receivable/(payable) balance as at 30 June 2021(Unaudited)SR’000 30 June 2020(Unaudited)SR’000 30 June 2021(Unaudited)SR’000 31 December 2020(Audited)SR’000Shareholdersand others Insurance premium written 156,722 372,145 2,393** (536)**Shareholders Reinsurance Premium ceded (28,701) (19,103) (14,255)* (79,803)*Shareholders and others Claims paid 76,247 12,926 (8,599)*** (20,997)***Shareholders Medical costs charged by providers 70,843 11,921 (7,793)*** (15,303)***Shareholders Expenses charged to/from a related party - net -- 268 332* 966*Shareholders Tax equalisation - net -- (1,873) (1,873)* (1,873)*Shareholders Board members fees 390 503 (390)* (915)*Bupa Middle East Holdings Two W.L.L. (Related party) Trade mark fee 12,700 13,448 (12,700)* (26,896)** Amounts due to related parties amounted to SR 28,886 thousand (2020: SR 108,521 thousand).** Amounts included in premium receivables (note 5).*** Amounts are included in outstanding claims.The remuneration of the key management personnel during the period ended 30 June is as follows: 30 June 2021 (Unaudited) 30 June 2020 (Unaudited) SAR’000 SAR’000 Short-term benefits 14,690 12,267Long-term benefits 8,676 5,124 23,366 17,391 Short-term benefits include salaries, allowances, annual bonuses and incentives whilst long-term benefits include employees’ end of service benefits and the Long Term Incentive Plan (“LTIP”). | 14 |
| Disclosure of entity's operating segments [text block] | The 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. No inter-segment transactions occurred during the periodOperating 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, and 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: As at 30 June 2021 (Unaudited) Insurance operations Operating segments Major customers Non-Major customers Total Insurance operations Shareholders’ operations Total SAR’000 SAR’000 SAR’000Assets Premiums receivable – net 1,305,125 916,473 2,221,598 -- 2,221,598Reinsurers’ share of unearned premiums 13,461 11,134 24,595 -- 24,595Reinsurers’ share of outstanding claims 1,366 3,004 4,370 -- 4,370Reinsurers’ share of claims incurred but not reported 2,070 4,470 6,540 -- 6,540Deferred policy acquisition costs 126,369 103,374 229,743 -- 229,743Unallocated assets 5,116,811 4,960,935 10,077,746Total assets 7,603,657 4,960,935 12,564,592 LiabilitiesUnearned premiums 2,595,245 2,146,679 4,741,924 -- 4,741,924Outstanding claims 396,286 159,548 555,834 -- 555,834Claims incurred but not reported 875,931 371,951 1,247,882 -- 1,247,882Premium deficiency Reserve 97,441 80,600 178,041 -- 178,041Claims handling reserve 14,302 5,914 20,216 -- 20,216Unallocated liabilities 842,809 965,231 1,808,040Total liabilities 7,586,706 965,231 8,551,937 At 31 December 2020 (Audited) 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 Three-month period ended 30 June 2021(Unaudited) Operating segments Major customers Non-Major customers Total SAR’000 REVENUES Gross written premium 1,571,240 998,477 2,569,717 Reinsurance premiums ceded – Local (790) (503) (1,293)Reinsurance premiums ceded – International (9,509) (6,042) (15,551)Net premiums written 1,560,941 991,932 2,552,873 Changes in unearned premiums – net 160,384 (144,183) 16,201 Net premiums earned 1,721,325 847,749 2,569,074 UNDERWRITING COSTS AND EXPENSES Gross claims paid (1,527,182) (594,301) (2,121,483)Reinsurers’ share of claims paid 4,499 1,751 6,250 Net claims paid (1,522,683) (592,550) (2,115,233)Changes in outstanding claims (27,375) (14,888) (42,263)Changes in claims incurred but not reported 75,409 5,232 80,641 Changes in Premium deficiency Reserve 20,133 4,784 24,917 Changes in claims handling reserves 518 (71) 447 Reinsurance share of changes in outstanding claims 645 1,413 2,058 Reinsurance share of changes in claims incurred but not reported (217) (346) (563)Net claims incurred (1,453,570) (596,426) (2,049,996)Policy acquisition costs (40,428) (26,952) (67,380)TOTAL UNDERWRITING COSTS AND EXPENSES (1,493,998) (623,378) (2,117,376) NET UNDERWRITING INCOME 227,327 224,371 451,698 OTHER OPERATING INCOME/(EXPENSES) Allowance for doubtful receivables (9,342)Unallocated income 83,759 Unallocated expenses (162,089)TOTAL OTHER OPERATING INCOME/(EXPENSES) (87,672) Income before Surplus, Zakat & Income Tax 364,026Income attributed to insurance operations (transfer to surplus payable) (30,414)Income attributed to the shareholders before zakat and income tax 333,612Zakat charge (17,315)Income tax charge (28,338)NET INCOME ATTRIBUTABLE TO THE SHAREHOLDERS AFTER ZAKAT AND INCOME TAX 287,959 Gross Written Premium details Three-month period ended 30 June 2021SAR’000 Corporates 1,824,595 Medium Enterprises 550,003 Small Enterprises 175,782 Micro Enterprises 14,828 Individuals 4,509 Total Gross Written Premium 2,569,717 Three-month period ended 30 June 2020(Unaudited) Operating segments Major customers Non-Major customers Total SAR’000 REVENUES Gross written premium 1,357,956 885,262 2,243,218 Reinsurance premiums ceded – Local (690) (450) (1,140)Reinsurance premiums ceded – International (5,737) (3,741) (9,478)Net premiums written 1,351,529 881,071 2,232,600 Changes in unearned premiums – net 474,585 (10,638) 463,947Net premiums earned 1,826,114 870,433 2,696,547 UNDERWRITING COSTS AND EXPENSES Gross claims paid (1,148,197) (449,621) (1,597,818) Reinsurers’ share of claims paid 1,917 751 2,668 Net claims paid (1,146,280) (448,870) (1,595,150)Changes in outstanding claims 142,880 54,199 197,079 Changes in claims incurred but not reported (70,403) (45,275) (115,678)Changes in Premium deficiency Reserve (202,600) (83,053) (285,653)Changes in claims handling reserves (203) (318) (521)Reinsurance share of changes in outstanding claims (176) (184) (360)Reinsurance share of changes in claims incurred but not reported 36 115 151Net claims incurred (1,276,746) (523,386) (1,800,132)Policy acquisition costs (171,298) (114,199) (285,497)TOTAL UNDERWRITING COSTS AND EXPENSES (1,448,044) (637,585) (2,085,629) NET UNDERWRITING INCOME 378,070 232,848 610,918 OTHER OPERATING (EXPENSES)/ INCOME Allowance for doubtful receivables (26,049)Unallocated income 57,954Unallocated expenses (153,428)TOTAL OTHER OPERATING (EXPENSES)/INCOME (121,523) Income before Surplus, Zakat & Income Tax 489,395Income attributed to insurance operations (transfer to surplus payable) (46,337)Income attributed to the shareholders before zakat and income tax 443,058Zakat charge (20,495) Income tax charge (34,656)NET INCOME ATTRIBUTABLE TO THE SHAREHOLDERS AFTER ZAKAT AND INCOME TAX 387,907 Gross Written Premium details Three-month period ended 30 June 2020SAR’000 Corporates 1,620,432Medium Enterprises 444,667Small Enterprises 163,745Micro Enterprises 12,586Individuals 1,788Total Gross Written Premium 2,243,218 Six-month period ended 30 June 2021(Unaudited) Operating segments Major customers Non-Major customers Total SAR’000 REVENUES Gross written premium 3,670,283 2,152,215 5,822,498 Reinsurance premiums ceded – Local (1,611) (940) (2,551)Reinsurance premiums ceded – International (24,570) (14,335) (38,905)Net premiums written 3,644,102 2,136,940 5,781,042 Changes in unearned premiums – net (240,659) (473,447) (714,106)Net premiums earned 3,403,443 1,663,493 5,066,936 UNDERWRITING COSTS AND EXPENSES Gross claims paid (3,099,489) (1,214,834) (4,314,323)Reinsurers’ share of claims paid 8,981 3,519 12,500 Net claims paid (3,090,508) (1,211,315) (4,301,823)Changes in outstanding claims (76,617) (32,698) (109,315)Changes in claims incurred but not reported 112,158 18,254 130,412 Changes in Premium deficiency Reserve 91,576 (5,866) 85,710 Changes in claims handling reserves 567 (28) 539 Reinsurance share of changes in outstanding claims 876 2,019 2,895 Reinsurance share of changes in claims incurred but not reported 111 (32) 79 Net claims incurred (2,961,837) (1,229,666) )4,191,503)Policy acquisition costs (74,429) (49,619) (124,048)TOTAL UNDERWRITING COSTS AND EXPENSES (3,036,266) (1,279,285) (4,315,551) NET UNDERWRITING INCOME 367,177 384,208 751,385 OTHER OPERATING INCOME/(EXPENSES) Allowance for doubtful receivables (26,361)Unallocated income 153,986 Unallocated expenses (325,078)TOTAL OTHER OPERATING INCOME/(EXPENSES) (197,453) Income before Surplus, Zakat & Income Tax 553,932Income attributed to insurance operations (transfer to surplus payable) (44,903)Income attributed to the shareholders before zakat and income tax 509,029Zakat charge (35,633)Income tax charge (45,535)NET INCOME ATTRIBUTABLE TO THE SHAREHOLDERS AFTER ZAKAT AND INCOME TAX (427,861) Gross Written Premium details Six-month period ended 30 June 2021SAR’000 Corporates 4,213,803 Medium Enterprises 1,170,458 Small Enterprises 394,236 Micro Enterprises 34,859 Individuals 9,142 Total Gross Written Premium 5,822,498 Six-month period ended 30 June 2020(Unaudited) Operating segments Major customers Non-Major customers Total SAR’000 REVENUES Gross written premium 3,673,163 2,040,033 5,713,196 Reinsurance premiums ceded – Local (1,462) (808) (2,270)Reinsurance premiums ceded – International (16,684) (9,228) (25,912)Net premiums written 3,655,017 2,029,997 5,685,014 Changes in unearned premiums – net (22,191) (293,920) (316,111)Net premiums earned 3,632,826 1,736,077 5,368,903 UNDERWRITING COSTS AND EXPENSES Gross claims paid (2,819,152) (1,116,716) (3,935,868) Reinsurers’ share of claims paid 3,823 1,512 5,335Net claims paid (2,815,329) (1,115,204) (3,930,533)Changes in outstanding claims 154,309 52,747 207,056 Changes in claims incurred but not reported (58,180) (51,634) (109,814)Changes in Premium deficiency Reserve (202,600) (83,053) (285,653)Changes in claims handling reserves 8 (446) (438)Reinsurance share of changes in outstanding claims (152) (134) (286)Reinsurance share of changes in claims incurred but not reported 974 431 1,405Net claims incurred (2,920,970) (1,197,293) (4,118,263)Policy acquisition costs (253,392) (168,928) (422,320)TOTAL UNDERWRITING COSTS AND EXPENSES (3,174,362) (1,366,221) (4,540,583) NET UNDERWRITING INCOME 458,464 369,856 828,320 OTHER OPERATING (EXPENSES)/ INCOME Allowance for doubtful receivables (4,478)Unallocated income 125,105Unallocated expenses (323,380)TOTAL OTHER OPERATING (EXPENSES)/INCOME (202,753) Income before Surplus, Zakat & Income Tax 625,567Income attributed to insurance operations (transfer to surplus payable) (56,853)Income attributed to the shareholders before zakat and income tax 568,714Zakat charge (35,465)Income tax charge (45,608)NET INCOME ATTRIBUTABLE TO THE SHAREHOLDERS AFTER ZAKAT AND INCOME TAX 487,641 Gross Written Premium details Six-month period ended 30 June 2020SAR’000 Corporates 4,235,362Medium Enterprises 1,071,359Small Enterprises 368,175Micro Enterprises 30,666Individuals 7,634Total Gross Written Premium 5,713,196 | 13 |
| Disclosure of capital management [text block] | 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. In the opinion of the Board of Directors, the Company has fully complied with the regulatory capital requirements during the reported financial period. | 18 |
| Disclosure of commitments and contingencies, general [text block] | a) The Company’s commitments and contingencies are as follows: 30 June 2021(Unaudited) 31 December 2020(Audited) SAR’000 SAR’000 Letters of guarantee* -- --Total -- -- As of 30 June 2021, total Letters of Guarantee issued by banks amounted to SR 138.5million (2020: 138 million), of which Nil (31 December 2020: Nil) are issued against restricted deposits with banks and have been recorded under prepaid expenses and other assets.b) The Company is subject to legal proceedings in the ordinary course of business. There was no material change in the status of legal proceedings from 31 December 2020. | 11 |
| Disclosure of fair value of financial assets and liabilities [text block] | Fair 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 and financial liabilities, including their levels in the fair value hierarchy for financial instruments measured at fair value. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation to fair value. Fair value Level 1 Level 2 Level 3 Total Carrying value SAR’000 SAR’000 SAR’00030 June 2021 (Unaudited) Financial assets measured at fair value - Investments held as FVSI -- 4,256,712 -- 4,256,712 4,256,712- Available-for-sale investments 1,545,262 615,420 10,125 2,170,807 2,170,807 1,545,262 4,872,132 10,125 6,427,519 6,427,519 Fair value Level 1 Level 2 Level 3 Total Carrying value SAR’000 SAR’000 SAR’00031 December 2020 (Audited) 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 5,898,196c) Measurement of fair valueValuation technique and significant unobservable inputsThe following table shows the valuation techniques used in measuring Level 2 fair value at 30 June 2021 and 31 December 2020, 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 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 | 12 |
| Disclosure of comparative figures [text block] | Certain comparative figures have been restated and regrouped to conform with the current period’s presentation in these interim condensed financial statements. These restatements have no impact on the net income for the three-month and six-month periods ended June 30, 2020 and retained earnings as at June 30, 2020. For the six-month period ended June 30, 2020, an amount of SR 132.282 million has been reclassified from ‘Selling and marketing expenses’ to ‘Policy acquisition costs’. Similarly for the three-month ended June 30, 2020, an amount of SR 58.370 million has been reclassified from ‘Selling and marketing expenses’ to ‘Policy acquisition costs’. | 21 |
| Disclosure of board of director's approval of the financial statements [text block] | The interim condensed financial statements have been approved by the Board of Directors, on 03.Muharram.1443H corresponding to 11.August.2021. | 24 |
| Disclosure of other notes relevant to understanding of financial statements [text block] | Interim financial position 30 June 2021 (Unaudited) 31 December 2020 (Audited) Insurance operations Shareholders’ operations Total Insurance operations Shareholders’ operations Total SAR‘000 SAR‘000 SAR‘000 SAR‘000 SAR‘000 SAR‘000ASSETS Cash and cash equivalents 62,962 667,602 730,564 195,232 438,019 633,251Premiums receivables – net 2,221,598 -- 2,221,598 1,320,043 -- 1,320,043Reinsurers’ share of unearned premiums 24,595 -- 24,595 20,108 -- 20,108Reinsurers’ share of outstanding claims 4,370 -- 4,370 1,475 -- 1,475Reinsurers’ share of claims Incurred but not reported 6,540 -- 6,540 6,461 -- 6,461Deferred policy acquisition costs 229,743 -- 229,743 68,214 -- 68,214Investments 3,934,239 2,824,530 6,758,769 3,568,181 2,461,265 6,029,446Prepaid expenses and other assets 88,610 42,202 130,812 118,404 40,056 158,460Term deposits 1,031,000 893,118 1,924,118 1,598,055 1,125,118 2,723,173Fixtures, Furniture and Right-of-use assets – net -- 196,190 196,190 -- 204,019 204,019Intangible assets – net -- 65,822 65,822 -- 61,958 61,958Deferred tax asset -- 39,066 39,066 -- 37,941 37,941Goodwill -- 98,000 98,000 -- 98,000 98,000Statutory deposit -- 120,000 120,000 -- 120,000 120,000Accrued income on statutory deposit -- 14,405 14,405 -- 13,806 13,806TOTAL ASSETS 7,603,657 4,960,935 12,564,592 6,896,173 4,600,182 11,496,355 30 June 2021 (Unaudited) 31 December 2020 (Audited) Insurance operations Shareholders’ operations Total Insurance operations Shareholders’ operations Total SAR‘000 SAR‘000 SAR‘000 SAR‘000 SAR‘000 SAR‘000LIABILITIES Accrued and other liabilities 601,653 546,289 1,147,942 534,201 141,849 676,050Insurance operations’ surplus payable 229,728 -- 229,728 200,391 -- 200,391Reinsurers’ balances payable 11,428 -- 11,428 4,873 -- 4,873Unearned premiums 4,741,924 -- 4,741,924 4,023,331 -- 4,023,331Outstanding claims 555,834 -- 555,834 446,519 -- 446,519Claims incurred but not reported 1,247,882 -- 1,247,882 1,378,294 -- 1,378,294Premium deficiency Reserve 178,041 -- 178,041 263,751 -- 263,751Claims handling reserve 20,216 -- 20,216 20,755 -- 20,755Due to related parties -- 28,886 28,886 -- 108,521 108,521Provision for end-of-service benefits (EOSB) -- 145,789 145,789 -- 140,012 140,012Provision for zakat and income tax -- 229,862 229,862 -- 317,199 317,199Accrued income payable to SAMA -- 14,405 14,405 -- 13,806 13,806TOTAL LIABILITIES 7,586,706 965,231 8,551,937 6,872,115 721,387 7,593,502 EQUITY Share capital -- 1,200,000 1,200,000 -- 1,200,000 1,200,000Statutory reserve -- 867,096 867,096 -- 867,096 867,096Share based payments reserve -- 33,587 33,587 -- 32,800 32,800Shares held under employees share scheme -- (39,258) (39,258) -- (48,779) (48,779)Retained earnings -- 1,703,864 1,703,864 -- 1,684,003 1,684,003Re-measurement reserve for employees’ EOSB -- (31,173) (31,173) -- (31,173) (31,173)Investments fair value reserve 16,951 261,588 278,539 24,058 174,848 198,906TOTAL EQUITY 16,951 3,995,704 4,012,655 24,058 3,878,795 3,902,853TOTAL LIABILITIES AND EQUITY 7,603,657 4,960,935 12,564,592 6,896,173 4,600,182 11,496,355 Interim statement of income Three-month period ended 30 June (Unaudited) Six-month period ended 30 June (Unaudited) 2021 2020 2021 2020 Insurance operations Share-holders’ operations Total Insurance operations Share-holders’ operations Total Insurance operations Share-holders’ operations Total Insurance operations Share-holders’ operations Total SAR‘000 SAR‘000 SAR‘000 SAR‘000 SAR‘000 SAR‘000 SAR‘000 SAR‘000 SAR‘000 SAR‘000 SAR‘000 SAR‘000REVENUES Gross premiums written 2,569,717 -- 2,569,717 2,243,218 -- 2,243,218 5,822,498 -- 5,822,498 5,713,196 -- 5,713,196 Reinsurance premiums ceded – Local (1,293) -- (1,293) (1,140) -- (1,140) (2,551) -- (2,551) (2,270) -- (2,270)Reinsurance premiums ceded – International (15,551) -- (15,551) (9,478) -- (9,478) (38,905) -- (38,905) (25,912) -- (25,912)Net premiums written 2,552,873 -- 2,552,873 2,232,600 -- 2,232,600 5,781,042 -- 5,781,042 5,685,014 -- 5,685,014 Changes in unearned premiums – net 16,201 -- 16,201 463,947 -- 463,947 (714,106) -- (714,106) (316,111) -- (316,111)Net premiums earned 2,569,074 -- 2,569,074 2,696,547 -- 2,696,547 5,066,936 -- 5,066,936 5,368,903 -- 5,368,903 UNDERWRITING COSTS AND EXPENSES Gross claims paid (2,121,483) -- (2,121,483) (1,597,818) -- (1,597,818) (4,314,323) -- (4,314,323) (3,935,868) -- (3,935,868) Reinsurers’ share of claims paid 6,250 -- 6,250 2,668 -- 2,668 12,500 -- 12,500 5,335 -- 5,335Net claims paid (2,115,233) -- (2,115,233) (1,595,150) -- (1,595,150) (4,301,823) (4,301,823) (3,930,533) (3,930,533)Changes in outstanding claims (42,263) -- (42,263) 197,079 -- 197,079 (109,315) -- (109,315) 207,056 -- 207,056 Changes in claims incurred but not reported 80,641 -- 80,641 (115,678) -- (115,678) 130,412 -- 130,412 (109,814) -- (109,814)Changes in Premium deficiency Reserve 24,917 -- 24,917 (285,653) -- (285,653) 85,710 -- 85,710 (285,653) -- (285,653)Changes in claims handling reserves 447 -- 447 (521) -- (521) 539 -- 539 (438) -- (438)Reinsurance share of changes in outstanding claims 2,058 -- 2,058 (360) -- (360) 2,895 -- 2,895 (286) -- (286)Reinsurance share of changes in claims incurred but not reported (563) -- (563) 151 -- 151 79 -- 79 1,405 -- 1,405 Net claims incurred (2,049,996) -- (2,049,996) (1,800,132) -- (1,800,132) (4,191,503) -- (4,191,503) (4,118,263) -- (4,118,263)Policy acquisition costs (67,380) -- (67,380) (285,497) -- (285,497) (124,048) -- (124,048) (422,320) -- (422,320)TOTAL UNDERWRITING COSTS AND EXPENSES (2,117,376) -- (2,117,376) (2,085,629) -- (2,085,629) (4,315,551) -- (4,315,551) (4,540,583) -- (4,540,583) NET UNDERWRITING INCOME 451,698 -- 451,698 610,918 -- 610,918 751,385 -- 751,385 828,320 -- 828,320OTHER OPERATING INCOME/(EXPENSES) Allowance for doubtful receivables (9,342) -- (9,342) (26,049) -- (26,049) (26,361) -- (26,361) (4,478) -- (4,478)General and administrative expenses (135,341) (3,258) (138,599) (124,531) (2,944) (127,475) (264,790) (5,831) (270,621) (263,663) (6,039) (269,702)Selling and marketing expenses (23,490) -- (23,490) (25,953) -- (25,953) (54,457) -- (54,457) (53,678) -- (53,678)Investment income – net 21,935 51,941 73,876 28,994 21,297 50,291 45,570 88,182 133,752 63,244 47,852 111,096Other income – net (1,320) 11,203 9,883 (4) 7,667 7,663 (2,320) 22,554 20,234 (1,216) 15,225 14,009TOTAL OTHER OPERATING INCOME/(EXPENSES) (147,558) 59,886 (87,672) (147,543) 26,020 (121,523) (302,358) 104,905 (197,453) (259,791) 57,038 (202,753) Income before Surplus, Zakat & Income Tax 304,140 59,886 364,026 463,375 26,020 489,395 449,027 104,905 553,932 568,529 57,038 625,567 Transfer of surplus to shareholders (273,726) 273,726 -- (417,038) 417,038 -- (404,124) 404,124 -- (511,676) 511,676 -- NET RESULTS FROM OPERATIONS 30,414 333,612 364,026 46,337 443,058 489,395 44,903 509,029 553,932 56,853 568,714 625,567Zakat charge -- (17,315) (17,315) -- (20,495) (20,495) -- (35,633) (35,633) -- (35,465) (35,465)Income tax charge -- (28,338) (28,338) -- (34,656) (34,656) -- (45,535) (45,535) -- (45,608) (45,608)NET INCOME ATTRIBUTED TO THE SHAREHOLDERS AFTER ZAKAT AND INCOME TAX 30,414 287,959 318,373 46,337 387,907 434,244 44,903 427,861 472,764 56,853 487,641 544,494 Weighted average number of ordinary outstanding shares (in thousands) 119,611 119,446 119,531 119,396 Basic and diluted earnings per share (Expressed in SAR per share) 2.41 3.25 3.58 4.08 Interim statement of comprehensive income Three month period ended 30 June (Unaudited) Six month period ended 30 June (Unaudited) 2021 2020 2021 2020 Insurance operations Share-holders’ operations Total Insurance operations Share-holders’ operations Total Insurance operations Share-holders’ operations Total Insurance operations Share-holders’ operations Total SAR‘000 SAR‘000 SAR‘000 SAR‘000 SAR‘000 SAR‘000 SAR‘000 SAR‘000 SAR‘000 SAR‘000 SAR‘000 SAR‘000Net income attributed after zakat and income tax 30,414 287,959 318,373 46,337 387,907 434,244 44,903 427,861 472,764 56,853 487,641 544,494 Other comprehensive (loss) /income Items that are or may be reclassified to interim condensed statement of income in subsequent periods - Net change in fair value of available-for-sale investments (3,373) 73,189 69,816 16,933 89,296 106,229 (7,107) 86,740 79,633 1,490 50,878 52,368 TOTAL COMPREHENSIVE INCOME 27,041 361,148 388,189 63,270 477,203 540,473 37,796 514,601 552,397 58,343 538,519 596,862 Reconciliation: Less: Net income attributable to insurance operations transferred to surplus payable (30,414) (46,337) (44,903) (56,853) TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 357,775 494,136 507,494 540,009Interim statement of cash flows six-month period ended 30 June (Unaudited) 2021 2020 Insurance operations Share-holders’ operations Total Insurance operations Share-holders’ operations Total SAR‘000 SAR‘000 SAR‘000 SAR‘000 SAR‘000 SAR‘000CASH FLOWS FROM OPERATING ACTIVITIES Net income attributed to the shareholders before zakat and income tax -- 509,029 509,029 -- 568,714 568,714Adjustments for non-cash items: Net income attributed to the insurance operations 44,903 -- 44,903 56,853 -- 56,853 Depreciation and amortization of Fixtures, Furniture and Right-of-use assets 15,457 -- 15,457 15,998 -- 15,998Amortization of intangible assets 6,839 -- 6,839 8,102 -- 8,102Provision for LTIP -- 10,308 10,308 -- 6,499 6,499 Allowance for doubtful receivables 26,361 -- 26,361 4,478 -- 4,478 Unrealized loss / (gains) on investments held as FVIS (1,515) 483 (1,032) 726 (252) 474 Realized gains on investments (3,287) (10,550) (13,837) (5,101) 547 (4,554)Provision for employees EOSB -- 9,271 9,271 -- 11,242 11,242 Finance cost -- 3,155 3,155 -- 2,698 2,698 88,758 521,696 610,454 81,056 589,448 670,504 Changes in operating assets and liabilities: Premiums receivable (927,916) -- (927,916) (668,911) -- (668,911)Reinsurers’ share of unearned premiums (4,487) -- (4,487) 598 -- 598 Reinsurers’ share of outstanding claims (2,895) -- (2,895) 286 -- 286 Reinsurers’ share of claims incurred but not reported (79) -- (79) (1,405) -- (1,405)Deferred policy acquisition costs (161,529) -- (161,529) 134,022 -- 134,022 Prepaid expenses and other assets 29,794 (2,146) 27,648 28,534 20,060 48,594 Accrued and other liabilities 67,452 2,545 69,997 51,857 (3,406) 48,451Reinsurers’ balances payable 6,555 -- 6,555 9,079 -- 9,079 Unearned premiums 718,593 -- 718,593 315,513 -- 315,513 Outstanding claims 109,315 -- 109,315 (207,056) -- (207,056)Claims incurred but not reported (130,412) -- (130,412) 109,814 -- 109,814 Claims Premium deficiency reserve (85,710) -- (85,710) 285,653 -- 285,653 Claims handling reserve (539) -- (539) 438 -- 438 Due to related parties -- (79,635) (79,635) -- (4,344) (4,344) (293,100) 442,460 149,360 139,478 601,758 741,236Due to shareholders’ operations (22,296) 22,296 -- (28,053) 28,053 --Employees’ EOSBs paid -- (3,494) (3,494) -- (2,569) (2,569)Surplus paid to policyholders (15,566) -- (15,566) (13,842) -- (13,842)Zakat and income tax paid -- (169,630) (169,630) -- (10,574) (10,574)Net cash (used in)/generated from operating activities (330,962) 291,632 (39,330) 97,583 616,668 714,251 CASH FLOWS FROM INVESTING ACTIVITIES Placement in term deposits (436,000) (100,000) (536,000) (369,045) (300,000) (669,045)Proceeds from maturity of term deposits 1,003,055 332,000 1,335,055 1,205,565 840,894 2,046,459 Additions in investments (4,844,337) (4,387,830) (9,232,167) (2,507,618) (1,678,256) (4,185,874)Disposals of investments 4,475,974 4,121,372 8,597,346 1,204,028 577,456 1,781,484 Additions to Fixtures, Furniture and Right-of-use assets -- (7,628) (7,628) -- (5,101) (5,101)Intangible assets acquired -- (10,703) (10,703) -- (7,971) (7,971)Net cash generated from/(used in) investing activities 198,692 (52,789) 145,903 (467,070) (572,978) (1,040,048) CASH FLOWS FROM FINANCING ACTIVITY Lease liability paid -- (9,260) (9,260) -- (6,651) (6,651)Net cash used in financing activity -- (9,260) (9,260) -- (6,651) (6,651) Net change in cash and cash equivalents (132,270) 229,583 97,313 (369,487) 37,039 (332,448)Cash and cash equivalents at the beginning of the period 195,232 438,019 633,251 446,942 218,767 665,709 Cash and cash equivalents at the end of the period 62,962 667,602 730,564 77,455 255,806 333,261IMPACT OF COVID-19 & COMPENSATION FOR GOVERNMENT PROVIDERSAs many world economies grapple with the resurge of coronavirus (“COVID-19”), Bupa Arabia continues to monitor the situation closely and refresh its business continuity and risk management plans to ensure sustainability of its current service levels and operational activities under different scenarios while preserving the safety and health of its employees. COVID-19 is having a profound impact on many facets of the health insurance sector, including medical claim patterns as explained below. Given the many uncertainties surrounding the duration and severity of the pandemic, management continues reassessing and updating its estimates and judgments on a regular basis. Actual outcomes may differ from those projected. The liquidity and solvency positions of the Company remain strong as at the date of issuing these interim condensed financial statements.After Saudi Arabia eased 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 2020 and continued throughout the first half of 2021. This resulted in a noticeable increase in incurred claims from June 2020 through June 2021, 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, unless another COVID-19 wave is witnessed. 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”) 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. During the first quarter of 2021, following the implementation of Article 11, the company started to witness a surge in claims received from government providers. This trend continued during Q2 as more government medical providers submitted their claims. 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 continued to hold a PDR of SR 178 million as at 30 June 2021 (31 December 2020: 263.75 million).DIVIDENDS DECLAREDOn 25 April 2021, the Company’s Board of Directors proposed to pay a dividend, for the year ended 31 December 2020, of SR 3.4 per share totalling SR 408 million to its shareholders. The dividend was and approved by the shareholders in the Extraordinary General Assembly meeting, held on 24 June 2021, and accordingly the dividend payment was executed in July 2021. | 20 + 22 + 23 |
