| 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] | Al Rajhi Company for Cooperative Insurance (a Saudi Joint Stock Company incorporated in Kingdom of Saudi Arabia), “the Company”, was formed pursuant to Royal Decree No. (M/35) dated Jumada al thani 27,1429. (January 1, 2008). The Company operates under Commercial Registration no. 1010270371 dated Rajab 5, 1430 corresponding to June 28, 2009. The registered address of the Company's head office is as follows: Al Rajhi Company for Cooperative InsuranceP.O. Box 67791 Riyadh 11517 Kingdom of Saudi Arabia. The purpose of the Company is to conduct takaful operations and all related activities including re-takaful / re-insurance and agency activities. Its principal lines of business include motor, medical, protection & savings, marine, fire, engineering and casualty insurance. On July 31, 2003, corresponding to Jumada al thani 2, 1424, the Saudi Arabian Monetary Authority (“SAMA”), as the principal authority responsible for the application and administration of the Insurance Law and its Implementing Regulations, granted the Company a license to transact insurance activities in the Kingdom of Saudi Arabia. On April 20, 2004, corresponding to Rabi' al-awwal 1, 1425, the Law on the Supervision of Cooperative Insurance Companies (“Insurance Law”) was promulgated by Royal Decree Number (M/32). As a commitment from the Company for its activities to be in compliance with Islamic Shari’a legislations, since its inception, the Company has established a Shari’a Authority to review and approve the activities and the products of the Company. | |
| Disclosure of statement of compliance [text block] | The interim condensed financial statements (interim condensed financial information) of the Company as at and for the three-month and six-months periods ended 30 June 2020 have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' (“IAS 34”), as endorsed in the Kingdom of Saudi Arabia ("KSA"), and other standards and pronouncements issued by the Saudi Organization of Certified Public Accountants ("SOCPA").” | |
| Disclosure of critical accounting judgements, estimates and assumptions, general [text block] | The interim condensed financial information does not include all of the information required and should be read in conjunction with the annual financial statement as of and for the year ended December 31, 2019. This interim condensed financial information is expressed in Saudi Arabian Riyals (SAR) and is rounded off to the nearest thousand. The interim condensed financial information is prepared under the going concern basis and the historical cost convention, except for financial assets measured at fair value through statement of income (FVSI), financial assets measured at fair value through other comprehensive income (FVOCI), financial liabilities measured at fair value through statement of income (FVSI), and end of service benefits (EOSB) at present value. The Company’s interim statement of financial position is not presented using a current / non-current classification. The following balances would generally be classified as non-current: financial assets at fair value through other comprehensive income, financial asset at amortised cost, property and equipment, statutory deposit, other assets, end of service benefits and payable to shareholders. All other assets and liabilities are classified as current. As required by the Saudi Arabian Insurance Regulations and guidelines of the sharia board, the Company maintains separate books of accounts for takaful operations and shareholders’ operations and presents the financial information accordingly (refer note 19). Assets, liabilities, revenues and expenses clearly attributable to either activity are recorded in the respective accounts. The basis of allocation of expenses from joint operations is determined and approved by the management and the Board of Directors. As per the Company’s policy, all general and administrative expenses of takaful operations are charged to shareholders’ operations. The Company in accordance with the Islamic Shariah provisions manages the co-operative insurance operations and calculates the management fee in the below manner and pays it in full shortly after at the end of the fiscal year. The first component of the management fee is calculated based on the net contributions written for the period after adjusting commission income and cost of production for motor and general at 40% and for health at 30% and is limited to the extent of general and administrative expenses charged in the interim statement of income – shareholders operations (refer note 19); and the other component of the management fee is determined up to 90% of the net surplus, if any, for the period from takaful operations remaining after computing the first component of management fee. The Company is required to distribute the remaining 10% of the net surplus from Takaful operations to policyholders in accordance with the Insurance Law and Implementation Regulations issued by the Saudi Arabian Monetary Authority (“SAMA”). The interim statement of financial position, statements of income, comprehensive income and cash flows of the takaful operations and shareholders’ operations which are presented in note 19 of the condensed interim financial information have been provided as supplementary financial information to comply with the requirements of the guidelines issued by SAMA implementing regulations. SAMA implementing regulations requires the clear segregation of the assets, liabilities, income and expenses of the takaful operations and the shareholders’ operations. Accordingly, the interim statements of financial position, statements of income, comprehensive income and cash flows prepared for the takaful operations and shareholders operations as referred to above, reflect only the assets, liabilities, income, expenses and comprehensive gains or losses of the respective operations. In preparing the Company-level financial information in compliance with IFRSs, the balances and transactions of the takaful operations are amalgamated and combined with those of the shareholders’ operations. Interoperation balances, transactions and unrealised gains or losses, if any, are eliminated in full during amalgamation. The accounting policies adopted for the takaful operations and shareholders’ operations are uniform for like transactions and events in similar circumstances. | |
| Disclosure of summary of significant accounting policies [abstract] | | |
| Disclosure of summary of significant accounting policies, general comment [text block] | The preparation of interim condensed financial information requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing this interim condensed financial information, the significant judgments made by the management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial statements for the year ended 31 December 2019. However, the Company has reviewed the key sources of estimation uncertainties disclosed in the last annual financial statements against the backdrop of the COVID-19 pandemic. Management will continue to assess the situation, and reflect any required changes in future reporting periods. On 11 March 2020, the World Health Organisation (“WHO”) declared the Coronavirus (“COVID-19”) outbreak as a pandemic in recognition of its rapid spread across the globe. This outbreak has also affected the GCC region including the Kingdom of Saudi Arabia. Governments all over the world took steps to contain the spread of the virus. Saudi Arabia in particular has implemented closure of borders, released social distancing guidelines and enforced country wide lockdowns and curfews. In response to the spread of the Covid-19 virus in the Country where the Company operates and its consequential disruption to the social and economic activities in those markets, the Company’s management has proactively assessed its impacts on its operations and has taken a series of proactive and preventative measures and processes to ensure: - the health and safety of its employees and the wider community where it is operating- the continuity of its business throughout the Kingdom is protected and kept intact. The major impact of Covid-19 pandemic is seen in medical and motor line of business as explained below. As with any estimate, the projections and likelihoods of occurrence are underpinned by significant judgment and rapidly evolving situation and uncertainties surrounding the duration and severity of the pandemic, and therefore, the actual outcomes may be different to those projected. The impact of such uncertain economic environment is judgmental, and the Company will continue to reassess its position and the related impact on a regular basis. Medical technical reserves Based on the management’s assessment, the management believes that the Government’s decision to assume the medical treatment costs for both Saudi citizens and expatriates has helped in reducing any unfavourable impact. During the lockdown, the Company saw a decline in medical reported claims (majorly elective and non-chronic treatment claims) which resulted in a drop in claims experience. However, subsequent to the lifting of lockdown since June 21, 2020, the Company is experiencing a surge in claims which is in line with the expectations of the Company’s management. The Company’s management has duly considered the impact of surge in claims in the current estimate of future contractual cashflows of the insurance contracts in force as at June 30, 2020 for its liability adequacy test. Based on the results, the Company has booked an amount of SR 6.7 mn (December 31, 2019: Nil ; March 31, 2020: Nil) as a contribution deficiency reserve. Motor technical reserves In response to the Covid-19 pandemic, SAMA issued a circular 189 (the “circular”) dated 08 May 2020 to all insurance companies in the Kingdom of Saudi Arabia. Amongst other things, the circular instructed insurance companies to extend the period of validity of all existing retail motor insurance policies by further two months as well as providing a two-month additional coverage for all new retail motor policies written within one month of this circular. The Management, in conjunction with its appointed actuary, deliberated on a variety of internal factors and concluded, that the Company considers the extension of two months in exiting motor policies as new policy and record a premium deficiency reserve based on the expected claims for the extended 2 months period. For new retail motor policies issued as per above circular, the premium is earned over the period of 12 month as the impact of earnings over the period of coverage. i.e 14 month are not considered significant by the management for the period ended June 30, 2020 and subsequent periods.Motor technical reserves (continued) The Company has performed a liability adequacy test using current estimates of future cash flows under its insurance contracts at an aggregated level for motor line of business and recorded a Contribution deficiency reserve amounting to SR 116 mn as at 30 June, 2020 Financial assets The Company has performed an assessment in accordance with its accounting policy due to the Covid-19 pandemic to determine the impact of expected credit losses (“ECL”) on its financial assets. These current events and the prevailing economic condition may require the Company to revise certain inputs and assumptions used for the determination of expected credit losses (“ECL”). These would primarily revolve around either adjusting macroeconomic factors used by the Company in estimation of expected credit losses (and or) revisions to the scenario probabilities currently being used by the Company in ECL estimation. However, the management believe these factors are not certain yet and will incorporate any such adjustment in Q2 2020 financial statements. Based on these assessments, the Company’s management believes that the Covid-19 pandemic has had no material effects on Company’s reported results for the three and six-month periods ended 30 June 2020. The Company’s management continues to monitor the situation closely. Credit risk management The Company has strengthened its credit risk management policies to address the fast changing and evolving risks posed by the current circumstances. These include review of credit concentrations at granular economic sector, region, counterparty level and take appropriate action where required. Based on the review, the Company has identified that certain sectors like government contractors, airlines, retail sector and hospitality industry being impacted significantly by the Covid-19 pandemic and lower oil prices. | |
| Description of changes in accounting policy [text block] | The accounting policies, estimates and assumptions adopted in the preparation of this interim condensed financial information are consistent with those described in the annual financial statements for the year ended December 31, 2019 Standards issued but not yet effective The following standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company’s interim condensed financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective. Further, the Company has chosen not to early adopt the amendments and revisions to the IFRS, which have been published and are mandatory for compliance for the Company with effect from future dates.IFRS 17 - Insurance ContractsIFRS 17 - “Insurance Contracts”, applicable for the period beginning on or after 1 January 2021, and will supersede IFRS 4 “Insurance Contracts”. Earlier adoption permitted if both IFRS 15 'Revenue from Contracts with Customers' and IFRS 9 'Financial Instruments' have also been applied. The Company expects a material impact on measurement and disclosure of insurance and reinsurance that will affect both the statement of income and the statement of financial position. The Company has decided not to early adopt this new standard. | |
| Description of accounting policy for cash and cash equivalents [text block] | Cash and cash equivalents comprise cash in hand and at bank and murabaha deposits with an original maturity of three months or less from the acquisition date. | |
| Description of accounting policy for premiums/ contributions and insurance/ reinsurance or takaful/ retakaful balance receivables [text block] | Contributions receivable are stated at gross written contributions receivable from insurance contracts, less an allowance for any uncollectible amounts. Contributions and re-takaful balances receivable are recognised when due and measured on initial recognition at the fair value of the consideration receivable. The carrying value of receivable is reviewed for impairment and whenever events or circumstances indicate that the carrying amount may not be recoverable, the impairment loss is recorded in the statement of income. Receivable balances are derecognised when the Company no longer controls the contractual rights that comprise the receivable balance, which is normally the case when the receivable balance is sold, or all the cash flows attributable to the balance are passed through to an independent third party. Receivables disclosed in note 6 fall under the scope of IFRS 4 “Insurance contracts”. | |
| Description of accounting policy for deferred policy acquisition costs [text block] | Commissions and other costs directly related to the acquisition and renewal of takaful contracts are deferred and amortised over the terms of the contract to which they relate, similar to contributions earned. Amortisation is recorded in the “policy acquisition cost” in the statement of income. All other indirect costs are recognised as an expense when incurred. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period and are treated as a change in accounting estimate.An assessment is performed of the policies at each reporting date or if circumstances exist which require assessment. If based on assessment, 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 write-off in the statement of income. DPAC is also considered in the liability adequacy test for each reporting period. | |
| Description of accounting policy for property and equipment [text block] | Property and equipment is measured at cost net of accumulated depreciation and accumulated impairment in value if any. Cost includes expenditure that is directly attributable to the acquisition of the assets. Expenditure for repair and maintenance is charged to the statement of income. Improvements that increase the value or materially extend the life of the related assets are capitalised. Depreciation is charged to the statement of income on a straight line basis over the estimated useful lives of the assets. The estimated useful lives of the assets are: Year Office and electrical equipment 5 Furniture and fixtures 6-7 Motor vehicles 5 Computer hardware and software 3 - 5 Any gain or loss on disposal of an item of property and equipment (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in statement of income. An item of property and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of income when the asset is derecognised. The carrying values of property and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets are written down to their recoverable amount. The residual values, useful lives and methods of depreciation of property, equipment are reviewed at each financial year end and adjusted prospectively, if appropriate. | |
| Description of accounting policy for statutory reserve [text block] | 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] | The Company operates an end of service benefit plan for its employees based on the prevailing Saudi Labor Laws. Accruals are made at the present value of expected future payments in respect of services provided by the employees up to the end of the reporting period using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the end of the reporting period 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 and when it falls due. Re-measurements (actuarial gains/ losses) as a result of experience adjustments and changes in actuarial assumptions are recognised in other comprehensive income. | |
| Description of accounting policy for statutory deposit [text block] | In accordance with the Cooperative Insurance Companies Control Law issued by the Saudi Arabian Monetary Authority (“SAMA”), the Company is required to maintain a deposit in a bank account equal to 10% of the paid up share capital of the Company. This statutory deposit cannot be withdrawn without the consent of SAMA. Statutory deposit is classified as a financial asset and is carried at amortized cost. | |
| Description of accounting policy for seasonality of operations [text block] | There are no seasonal changes that may affect insurance operations of the Company. | |
| Disclosure of notes forming part of accounts [abstract] | | |
| Disclosure of zakat [text block] | A summary of Movement in the Zakat and income tax accrued during the six month period ended 30 June 2020 and the year ended 31 December 2019 are as follows: June 30, 2020 December 31, 2019 (Unaudited) (Audited) SR '000 SR '000 Balance at beginning of the year 40,932 33,689 Provided during the period / year 12,650 22,700 Payments during the period / year - (15,457) Balance at end of the period / year 53,582 40,932 Status of assessments The company has submitted Zakat and income tax returns to the General Authority of Zakat and Income Tax for the years 2010 to 2019.The General Authority of Zakat and Income requested data from the company for the years from 2014 to 2018 and the data is being prepared | |
| Disclosure of compensation to key management personnel [text block] | For the period ended The compensation of key management personnel during the period is as follows: June 30, 2020(Unaudited) June 30, 2019 (Unaudited) SAR’000 Salaries and other allowances 3,582 3,571 End of service benefits 3,669 2,171 7,251 5,742 Shariah committee remuneration 105 128 | |
| Disclosure of earnings per share [text block] | Earnings per share for the period ended June 30, 2020 and year ended December 31, 2019 is calculated by dividing the net income for the period/year attributable to the equity holders by 40 million shares. There were no dilutive potential shares in issue as at June 30, 2020 and December 31, 2019. | |
| Disclosure of related party transactions [text block] | Related parties represent major shareholders, directors and key management personnel of the Company, and companies of which they are principal owners and any other entities controlled, jointly controlled or significantly influenced by them. Pricing policies and terms of these transactions are approved by the Company’s management and Board of Directors. The following are the details of the major related party transactions during the period and the related balances: Transactions for the period ended Balance receivable / (payable) as at June 30, June 30, June 30, December 31, 2020 2019 2020 2019 (Unaudited) (Unaudited) (Unaudited) (Audited) SAR’000Major shareholders Gross contribution written 426,991 444,884 343,604 142,152 Claims paid 224,217 324,445 (2,500) (3,348) Claims incurred and notified during the period 204,697 294,857 174,791 (194,312) Reimbursement from related party - - - - Bank Balance - - 395,482 332,713 Investment in shares of Al Rajhi Banking and Investment Corporation - - 25,775 29,783 Entities controlled, jointly controlled or significantly influenced by related parties Gross contribution written 7,902 1,327 7,945 1,559 Claims paid 459 985 - - Claims incurred and notified during the period 518 2,085 518 (568) Investments managed by affiliates 3,083 21,265 217,161 115,228 Income received from sale of investment in Al Rajhi Capital commodity fund 2,832 4,024 - - Investment management fee paid to Al Rajhi Capital Company 1,384 1,450 - - Cash balance with Al Rajhi Capital - - 9,737 - | |
| Disclosure of entity's operating segments [text block] | Operating segments are identified on the basis of internal reports about components of the Company that are regularly reviewed by the Company’s Board of directors in their function as chief operating decision maker in order to allocate resources to the segments and to assess their performance. Transactions between the operating segments are on normal commercial terms and conditions. The revenue from external parties reported to the Board is measured in a manner consistent with that in the interim income statement. Segment assets and liabilities comprise operating assets and liabilities. There have been no changes to the basis of segmentation or the measurement basis for the segment surplus or deficit since December 31, 2019. Segment assets do not include takaful operations’ bank balances and cash, net contributions receivable, investments etc., accordingly, they are included in unallocated assets. Segment liabilities do not include takaful operations’ payables accruals and other liabilities and re-takaful / re-insurance balances payable etc., accordingly, they are included in unallocated liabilities. These unallocated assets and liabilities are not reported to chief operating decision maker under related segments and are monitored on a centralized basis. The segment information provided to the Company’s Board of Directors for the reportable segments for the Company’s total assets and liabilities at June 30, 2020 and December 31, 2019, its total revenues, expenses, and net income for period ended, are as follows: For the three month period ended June 30, 2020(Unaudited) Customers' category Medical Motor Property & casualty Protection&Savings Total SAR’000GROSS CONTRIBUTION WRITTEN Retail 10,243 209,878 77 19,297 239,495 Very small 1,244 - - - 1,244 Small 5,293 2,011 - - 7,304 Medium 5,649 10,907 90 - 16,646 Corporate 21,023 186,355 178,362 18,587 404,327 TOTAL GROSS CONTRIBUTION WRITTEN 43,452 409,151 178,529 37,884 669,016 For the three month period ended June 30, 2019(Unaudited) Customers' category Medical Motor Property & casualty Protection&Savings Total SAR’000GROSS CONTRIBUTION WRITTEN Retail 10,527 119,022 1,567 11,128 142,244 Very small 20,247 - - - 20,247 Small 15,549 23,217 - - 38,766 Medium 29,455 44,634 - - 74,089 Corporate 29,466 205,598 22,214 12,034 269,312 TOTAL GROSS CONTRIBUTION WRITTEN 105,244 392,471 23,781 23,162 544,658 For the six month period ended June 30, 2020(Unaudited) Customers' category Medical Motor Property & casualty Protection&Savings Total SAR’000GROSS CONTRIBUTION WRITTEN Retail 16,997 367,608 3,447 36,296 424,348 Very small 4,524 - - - 4,524 Small 17,668 7,890 - - 25,558 Medium 19,673 37,199 90 - 56,962 Corporate 76,245 599,505 232,195 37,221 945,166 TOTAL GROSS CONTRIBUTION WRITTEN 135,107 1,012,202 235,732 73,517 1,456,558 For the six month period ended June 30, 2019(Unaudited) Customers' category Medical Motor Property & casualty Protection&Savings Total SAR’000GROSS CONTRIBUTION WRITTEN Retail 16,761 232,581 2,951 21,882 274,175 Very small 55,859 - - - 55,859 Small 42,899 27,255 - - 70,154 Medium 81,266 50,505 - - 131,771 Corporate 101,336 692,584 38,577 23,775 856,272 TOTAL GROSS CONTRIBUTION WRITTEN 298,121 1,002,925 41,528 45,657 1,388,231 | |
| Disclosure of insurance/ takaful operations surplus and dividends [text block] | Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s financial statements in the period in which the dividends are approved by the Company’s shareholders. | |
| Disclosure of board of director's approval of the financial statements [text block] | These Interim condensed financial information were approved by the Board of Directors of the Company, on Dhuʻl-Hijjah 5, 1441, corresponding July 26, 2020. | |
| Disclosure of other notes relevant to understanding of financial statements [text block] | In response to the Covid-19 pandemic, SAMA issued a decree 189 (the “decree”) dated 08 May 2020 to all insurance companies in the Kingdom of Saudi Arabia. Amongst other things, the decree instructs insurance companies to extend the period of validity of all existing retail motor insurance policies by further two months as well as providing a two-month additional coverage for all new retail motor policies written within one month of this decree. The management believes the requirements of the decree to be a non-adjusting event. | |
