| Notes forming part of accounts [line items] | | |
| Disclosure of notes and other explanatory information [text block] | | |
| Disclosure of general information about reporting entity [abstract] | | |
| Disclosure of general information about reporting entity [text block] |
1 General
AXA Cooperative Insurance Company (a Joint Stock Company incorporated in Kingdom of Saudi Arabia), “the Company”, was formed pursuant to Royal Decree No. M/36 dated 27 Jumada II 1429H. (1 July 2008) (Date of inception). The Company was incorporated vide Ministerial Order number Q/192, dated 10 Jumada II 1430H, (3 June 2009) (date of incorporation). The Company is registered in the Kingdom of Saudi Arabia under commercial registration number 1010271203 issued in Riyadh on Rajab 20, 1430H (13 July 2009). The Company’s registered address is P.O. Box 753, Riyadh 11421, Kingdom of Saudi Arabia.
The purpose of the Company is to transact cooperative insurance operations and all related activities including reinsurance activities. Its principal lines of business include health, motor, marine, property, engineering, accident and liability and protection insurance.
The principal activities of the Company are to engage in cooperative insurance operations and related activities including reinsurance activities in accordance with the Law on Supervision of Cooperative Insurance (the “Law”), the Company’s by-laws and other regulations promulgated in the Kingdom of Saudi Arabia. The Company obtained licence from the Saudi Arabian Monetary Authority (“SAMA”) to practice general and health insurance and reinsurance business in the Kingdom of Saudi Arabia vide licence number TMN/25/20101, dated Safar 11, 1431H (corresponding to 26 January 2010). The Company has commenced insurance operations on 4 Rabi’ I 1431H (corresponding to 18 February 2010) after obtaining full product approval for certain products and temporary approval for the remaining products. During 2016, the Company obtained approval for the remaining products.
On 9 March 2020, the Company’s Board of Directors (“Board of Directors”) recommended to the Annual General Assembly (“AGM”) to distribute cash dividends of Saudi Riyals 0.70 per share (totalling Saudi Riyals 35.0 million). Such recommendation was withdrawn subsequent to 31 March 2020 by the Board of Directors. | 1 |
| Disclosure of basis of preparation of financial statements [text block] |
2 Basis of preparation
Basis of presentation
The interim condensed financial information of the Company has 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 pronouncements issued by the Saudi Organization for Certified Public Accountants (“SOCPA”).
The interim condensed financial information and financial statements of the Company as at and for the three-month period and year ended 31 March 2019 and 31 December 2019, respectively, were prepared in accordance with IAS 34 and International Financial Reporting Standards (“IFRS”), respectively, as modified by SAMA for the accounting of zakat and income tax (relating to the application IAS 12, ‘Income Taxes’ and IFRIC 21, ‘Levies’ so far as these relate to zakat and income tax).
During July 2019, SAMA instructed insurance companies in the Kingdom of Saudi Arabia to account for zakat and income taxes in the interim condensed statement of income. This aligns with IFRS and its interpretations as issued by the International Accounting Standards Board (“IASB”) and as endorsed in the Kingdom of Saudi Arabia and with the other standards and pronouncements that are issued by SOCPA (collectively referred to as “IFRS as endorsed in KSA”).
Accordingly, the Company changed its accounting treatment for zakat and income tax by retrospectively adjusting the impact in line with International Accounting Standard 8 - Accounting Policies, Changes in Accounting Estimates and Errors (as disclosed in Note 3.2 and the effects of this change are disclosed in Note 13 (a) to the interim condensed financial information).
2Basis of preparation (continued)
(a)Basis of presentation (continued)
The Company’s interim condensed statement of financial position is not presented using a current/non-current classification. However, the following balances would generally be classified as non-current: long-term deposits, deferred policy acquisition costs, investments, right-of-use assets, property and equipment, intangible assets, goodwill, statutory deposit and employee benefit obligations. All other financial statements line items would generally be classified as current.
As required by the Saudi Arabian Insurance Regulations, the Company maintains separate books of accounts for insurance operations and shareholders’ operations and presents the financial information accordingly. Assets, liabilities, revenues and expenses clearly attributable to either activity are recorded in the respective accounts. The basis of allocation of expenses from joint operations is determined and approved by the management and the Board of Directors.
The interim condensed statements of financial position, income, comprehensive income and cash flows of the insurance operations and shareholders operations which are presented on pages 39 to 49 of the financial information have been provided as supplementary financial information and to comply with the requirements of the guidelines issued by SAMA implementing regulations. SAMA implementing regulations requires the clear segregation of the assets, liabilities, income and expenses of the insurance operations and the shareholders operations. Accordingly, the interim condensed statements of financial position, income, comprehensive income and cash flows prepared for the insurance operations and shareholders operations as referred to above, reflect only the assets, liabilities, income, expenses and comprehensive gains or losses of the respective operations.
In preparing the Company’s interim condensed financial information in compliance with IFRS as endorsed in KSA, the balances and transactions of the insurance operations are amalgamated and combined with those of the shareholders’ operations. Interoperation balances, transactions and unrealized gains or losses, if any, are eliminated in full during amalgamation. The accounting policies adopted for the insurance operations and shareholders operations are uniform for like transactions and events in similar circumstances. | 2 |
| Disclosure of accounting framework used in preparation of financial statements [text block] |
3 Significant accounting policies
The accounting policies, estimates and assumptions used in the preparation of these interim condensed financial information are consistent with those used in the preparation of the annual financial statements for the year ended 31 December 2019 except as explained below:
3.1New standards, amendments and interpretations not yet applied by the Company
IFRS 9, ‘Financial Instruments’
In July 2014, the IASB published IFRS 9 which will replace IAS 39, ‘Financial Instruments: Recognition and Measurement’. The standard incorporates new classification and measurements requirements for financial assets, the introduction of an expected credit loss impairment model which will replace the incurred loss model of IAS 39, and new hedge accounting requirements. Under IFRS 9, all financial assets will be measured at either amortised cost or fair value. The basis of classification will depend on the business model and the contractual cash flow characteristics of the financial assets. The standard retains most of IAS 39’s requirements for financial liabilities except for those designated at fair value through profit or loss whereby that part of the fair value changes attributable to own credit is to be recognised in the interim condensed statement of comprehensive income instead of the interim condensed statement of income. The hedge accounting requirements are more closely aligned with risk management practices and follow a more principle based approach.
In September 2016, the IASB published amendments to IFRS 4, ‘Insurance Contracts’ that address the accounting consequences of the application of IFRS 9 to insurers prior to the publication of the forthcoming accounting standard for insurance contracts. The amendments introduce two options for insurers: the deferral approach and the overlay approach. The deferral approach provides an entity, if eligible, with a temporary exemption from applying IFRS 9 until the earlier of the effective date of a new insurance contract standard or 2022.The overlay approach allows an entity to remove from profit or loss the effects of some of the accounting mismatches that may occur before the new insurance contracts standard is applied. Significant accounting policies (continued)
3.1New standards, amendments and interpretations not yet applied by the Company (continued)
The Company is eligible and have chosen to apply the deferral approach under the amendments to IFRS 4. The impact of the adoption of IFRS 9 on the Company’s financial information will, to a large extent, have to take into account the interaction with the forthcoming insurance contracts standard. As such, it is not possible to fully assess the effect of the adoption of IFRS 9.
For detailed impact assessment of IFRS 9 adoption, reference to the annual financial statements for the year ended 31 December 2019 should be made.
IFRS 17, ‘Insurance Contracts’
Applicable for the period beginning on or after 1 January 2023, and will supersede IFRS 4. Earlier adoption is permitted if IFRS 9 has also been applied. The Company expects a material impact on measurement and disclosure of insurance and reinsurance that will affect the interim condensed statements of financial position, income and comprehensive income. The Company has decided not to early adopt this new standard.
For detailed impact assessment of IFRS 17 adoption, reference to the annual financial statements for the year ended 31 December 2019 should be made.
Changes in accounting policies
Change in accounting for zakat and income tax
As mentioned in Note 2 (a) above, the basis of preparation has been changed for the three-month period ended 31 March 2020 based on the latest instructions from SAMA during July 2019. Previously, zakat and income tax was recognized in the interim condensed statement of changes in equity as per SAMA circular number 381000074519 dated 11 April 2017. As per SAMA instructions in July 2019, the zakat and income tax shall be recognized in the interim condensed statement of income. The Company has accounted for this change in the accounting for zakat and income tax retrospectively (the effects of the above change are disclosed in Note 13 to the interim condensed financial information). The change has resulted in a reduction of reported income of the Company for the three-month period ended 31 March 2019 by Saudi Riyals 5.1 million. The change had no impact on the interim condensed statement of cash flows for the three-month period ended 31 March 2019.
a)Zakat
The Company is subject to zakat in accordance with the regulations of the General Authority of Zakat and Income Tax (“GAZT”). Zakat is calculated based on higher of approximate zakat base and adjusted profit and charged to profit or loss. Additional zakat, if any, is accounted for when determined to be required for payment.
Amounts accrued for zakat expense in one year may have to be adjusted in a subsequent year if the estimate of the annual charge changes.
b)Income tax
The income tax expense or credit for the period is the tax payable on the current period’s taxable income, based on the applicable income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses, and is charged to the interim condensed statement of income.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period the Company operates and generates taxable income. 3Significant accounting policies (continued)
Changes in accounting policies (continued)
Change in accounting for zakat and income tax (continued)
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions, where appropriate, on the basis of amounts expected to be paid to the tax authorities.
Additional current income tax, if any, is accounted for when determined to be required for payment.
c)Deferred tax
Deferred income tax is recognized using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts, and for the carry forward losses in the interim condensed financial information, if any. The amount of deferred tax recognized is based on the expected manner of realization or settlement of the carrying amounts of assets and liabilities using the tax rates enacted or substantively enacted at the reporting date. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences and the tax credits can be utilized. Deferred tax asset is reduced to the extent that it is no longer probable that the related tax benefits will be realized.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity. | 3 |
| Disclosure of new standards and amendments in standards [text block] |
3.1New standards, amendments and interpretations not yet applied by the Company
IFRS 9, ‘Financial Instruments’
In July 2014, the IASB published IFRS 9 which will replace IAS 39, ‘Financial Instruments: Recognition and Measurement’. The standard incorporates new classification and measurements requirements for financial assets, the introduction of an expected credit loss impairment model which will replace the incurred loss model of IAS 39, and new hedge accounting requirements. Under IFRS 9, all financial assets will be measured at either amortised cost or fair value. The basis of classification will depend on the business model and the contractual cash flow characteristics of the financial assets. The standard retains most of IAS 39’s requirements for financial liabilities except for those designated at fair value through profit or loss whereby that part of the fair value changes attributable to own credit is to be recognised in the interim condensed statement of comprehensive income instead of the interim condensed statement of income. The hedge accounting requirements are more closely aligned with risk management practices and follow a more principle based approach.
In September 2016, the IASB published amendments to IFRS 4, ‘Insurance Contracts’ that address the accounting consequences of the application of IFRS 9 to insurers prior to the publication of the forthcoming accounting standard for insurance contracts. The amendments introduce two options for insurers: the deferral approach and the overlay approach. The deferral approach provides an entity, if eligible, with a temporary exemption from applying IFRS 9 until the earlier of the effective date of a new insurance contract standard or 2022.The overlay approach allows an entity to remove from profit or loss the effects of some of the accounting mismatches that may occur before the new insurance contracts standard is applied. Significant accounting policies (continued)
3.1New standards, amendments and interpretations not yet applied by the Company (continued)
The Company is eligible and have chosen to apply the deferral approach under the amendments to IFRS 4. The impact of the adoption of IFRS 9 on the Company’s financial information will, to a large extent, have to take into account the interaction with the forthcoming insurance contracts standard. As such, it is not possible to fully assess the effect of the adoption of IFRS 9.
For detailed impact assessment of IFRS 9 adoption, reference to the annual financial statements for the year ended 31 December 2019 should be made.
IFRS 17, ‘Insurance Contracts’
Applicable for the period beginning on or after 1 January 2023, and will supersede IFRS 4. Earlier adoption is permitted if IFRS 9 has also been applied. The Company expects a material impact on measurement and disclosure of insurance and reinsurance that will affect the interim condensed statements of financial position, income and comprehensive income. The Company has decided not to early adopt this new standard.
For detailed impact assessment of IFRS 17 adoption, reference to the annual financial statements for the year ended 31 December 2019 should be made. | 3 |
| Disclosure of critical accounting judgements, estimates and assumptions, general [text block] |
(b) Critical accounting judgments, estimates and assumptions
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 management in applying the Company’s accounting policies and the key sources of estimation uncertainty including the risk management policies were the same as those that applied to the annual financial statements as at and for the year ended 31 December 2019.
On 11 March 2020, the World Health Organization (“WHO”) declared the Coronavirus (“Covid-19”) outbreak as a pandemic in recognition of its rapid spread globally. This outbreak has also affected the GCC region including the Kingdom of Saudi Arabia. Governments all over the world have taken steps to contain the spread of Covid-19. The Kingdom of Saudi Arabia has implemented closure of borders, released social distancing guidelines and enforced country-wide lockdowns and curfews.
In response to the spread of Covid-19 in the Kingdom of Saudi Arabia and its consequential disruption to social and economic activities, the Company’s management has assessed its impact on the Company’s operations and has taken a series of proactive and preventive measures to ensure:
the continuity of its business throughout the Kingdom of Saudi Arabia is protected and remains intact.
2Basis of preparation (continued)
Critical accounting judgments, estimates and assumptions (continued)
Refer to Note 23 in relation to SAMA decree 189 issued on 8 May 2020, which the management has considered to be a non-adjusting event, in response to the Covid-19 pandemic.
The following accounting judgments and estimates are critical in preparation of this interim condensed financial information:
Impact of Covid-19
Health technical reserves
Notwithstanding the current challenges, the Company’s management believes that the technical reserves for the Health business remain largely unaffected as the insurance industry is being facilitated by the Saudi Arabian government initiative of providing free healthcare to infected patients Furthermore, the insurance industry has not experienced high numbers of reported claims in relation to the Covid-19 pandemic during the three-month period ended 31 March 2020. Based on these factors, the Company’s management believes that the Covid-19 pandemic has had no material effect on the Company’s reported results for the three-month period ended 31 March 2020. The Company continues to monitor the situation closely.
Other financial assets
For held-to-maturity investments and financial assets designated as loans and receivables, the Company has performed an assessment in accordance with its accounting policy due to the Covid-19 pandemic to determine whether there is objective evidence that a financial asset or group of financial assets is impaired. These include factors such as significant financial difficulties of issuers or debtors, default or delinquency in payments, probability that the issuer or debtor will enter bankruptcy or other financial reorganization etc. For available-for-sale equity investments, the Company has performed an assessment to determine whether there is a significant decline in the fair value of available-for-sale equity investments to below cost. Based on these assessments, the Company believes that the Covid-19 pandemic has had no material effect on the Company’s reported results for the three-month period ended 31 March 2020. The Company continues to monitor the situation closely.
Liability arising from claims under insurance contracts
The estimation of the ultimate liability arising from claims made under insurance contracts is the Company’s most critical accounting estimate. There are several sources of uncertainty that need to be considered in the estimate of the liability that the Company will ultimately pay for such claims. Estimates are made at the end of the reporting period both for the expected ultimate cost of claim reported and for the expected ultimate costs of claims incurred but not reported (“IBNR”). Liabilities for unpaid reported claims are estimated using the input of assessments for individual cases reported to the Company. At the end of each reporting period, prior period claims estimates are reassessed for adequacy and changes are made to the provision.
The provision for claims incurred but not reported is an estimation of claims which are expected to be reported subsequent to the date of interim condensed statement of financial position, for which the insured event has occurred prior to the date of interim condensed statement of financial position. The primary technique adopted by management in estimating the cost of notified and IBNR claims, is that of using the past claims settlement trends to predict future claims settlement trends. A range of methods such as Chain Ladder Method, Bornhuetter-Ferguson Method and Expected Loss Ratio Method are used by the actuaries to determine these provisions. The actuary also uses a segmentation approach including analyzing cost per member per year for the medical line of business. Underlying these methods are a number of explicit or implicit assumptions relating to the expected settlement amount and settlement patterns of claims.
2Basis of preparation (continued)
Critical accounting judgments, estimates and assumptions (continued)
Impairment of premiums and reinsurance balances receivable and goodwill
An estimate of the uncollectible amount of premium receivable, if any, is made when collection of the full amount of the receivables as per the original terms of the insurance policy is no longer probable. For individually significant amounts, this estimation is performed on an individual basis. Amounts which are not individually significant, but which are past due, are assessed collectively and an allowance applied according to the length of time past due and Company’s past experience.
The recoverable amount of goodwill is estimated based on the present value of the future cash flows expected to be derived from the asset. In case the, recoverable amount is less than carrying value, the difference is charged to interim condensed statement of income as impairment loss.
Impairment of available-for-sale investments
The Company treats available-for-sale investments as impaired when there has been a significant or prolonged decline in the fair value below its cost or where other objective evidence of impairment exists. The determination of what is “significant” or “prolonged” requires considerable judgment. In addition, the Company evaluates other factors, including normal volatility in share price for quoted investments and the future cash flows and the discount factors for unquoted investments. | 2 |
| Disclosure of basis of consolidation of financial statements [text block] |
IFRS 17, ‘Insurance Contracts’
Applicable for the period beginning on or after 1 January 2023, and will supersede IFRS 4. Earlier adoption is permitted if IFRS 9 has also been applied. The Company expects a material impact on measurement and disclosure of insurance and reinsurance that will affect the interim condensed statements of financial position, income and comprehensive income. The Company has decided not to early adopt this new standard.
For detailed impact assessment of IFRS 17 adoption, reference to the annual financial statements for the year ended 31 December 2019 should be made. | 3 |
| Disclosure of summary of significant accounting policies [abstract] | | |
| Disclosure of summary of significant accounting policies, general comment [text block] |
3 Significant accounting policies
The accounting policies, estimates and assumptions used in the preparation of these interim condensed financial information are consistent with those used in the preparation of the annual financial statements for the year ended 31 December 2019 except as explained below: | 3 |
| Description of accounting policy for segment reporting [text block] |
Segmental information
Operating segments for the purpose of segmental information 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 its performance.
Transactions between the operating segments are on normal commercial terms and conditions. The revenue from external parties reported to the Board of Directors is measured in a manner consistent with that in the interim condensed statement of income. Segment assets and liabilities comprise operating assets and liabilities.
Segment assets do not include cash and cash equivalents, short-term deposits, premiums and reinsurers’ balances receivable - net, investments, prepaid expenses and other assets, long-term deposits, property and equipment, intangible assets, due from shareholders’ / insurance operations, goodwill, statutory deposit and accrued income on statutory deposit. Accordingly, they are included in unallocated assets. Segment liabilities do not include claims payable, accrued expenses and other liabilities, surplus distribution payable, reinsurers' balances payable, advance premiums, due to related party, employee benefit obligations, zakat and income tax, due to shareholders’ / insurance operations, and accrued income payable to SAMA. Accordingly, they are included in unallocated liabilities.
Segmental information (continued)
These unallocated assets and liabilities are not reported to chief operating decision maker under related segments and are monitored on a centralized basis.
For management purposes, the Company is organized into business units based on their products and services and has the following reportable segments:
Motor; Property and casualty; Health; and Protection.
Segment performance is evaluated based on profit or loss which, in certain respects, is measured differently from profit or loss in the interim condensed financial information.
Where intersegment transaction were to occur, transfer prices between operating segments are set on an arm’s length basis in a manner similar to transactions with third parties. Segment income, expense and results will then include those transfers between operating segments which will then be eliminated at the level of interim condensed financial information of the Company.
| 11 |
| Description of accounting policy for seasonality of operations [text block] |
(c) Seasonality of operations
There are no seasonal changes that may affect the insurance operations of the Company. | |
| Disclosure of notes forming part of accounts [abstract] | | |
| Disclosure of transfer of portfolio [text block] |
19 Goodwill on acquisition of insurance portfolio
This represents goodwill recognized on acquisition of insurance portfolio and net assets of AXA Insurance Saudi Arabia B.S.C (c). The Company received approval from SAMA on 15 Dhul-Qadah 1433H (corresponding to 1 October 2012) to transfer the insurance portfolio from AXA Saudi Arabia Holding W.L.L. (formerly AXA Insurance Saudi Arabia B.S.C.c) at a total consideration of Saudi Riyals 106.6 million. During 2015, the Company met payment conditions imposed by SAMA and received approval for payment of Saudi Riyals 50.0 million in respect of initial consideration to AXA Saudi Arabia Holding W.L.L. which was recognized as goodwill being the excess of consideration paid and the net assets acquired. The remaining amount of Saudi Riyals 56.6 million which was recorded as contingent liability was accordingly relinquished.
| 19 |
| Disclosure of commercial operations and product approval [text block] |
The principal activities of the Company are to engage in cooperative insurance operations and related activities including reinsurance activities in accordance with the Law on Supervision of Cooperative Insurance (the “Law”), the Company’s by-laws and other regulations promulgated in the Kingdom of Saudi Arabia. The Company obtained licence from the Saudi Arabian Monetary Authority (“SAMA”) to practice general and health insurance and reinsurance business in the Kingdom of Saudi Arabia vide licence number TMN/25/20101, dated Safar 11, 1431H (corresponding to 26 January 2010). The Company has commenced insurance operations on 4 Rabi’ I 1431H (corresponding to 18 February 2010) after obtaining full product approval for certain products and temporary approval for the remaining products. During 2016, the Company obtained approval for the remaining products. | 1 |
| Disclosure of leases [text block] |
8 Right-of-use assets and lease liabilities
| 31 March 2020 | 31 December 2019 | Right-of-use assets - building |
|
| Cost |
|
| Balance as at the beginning of the period / year | 27,086 | - | Additions | - | 27,086 | Balance as at the end of the period / year | 27,086 | 27,086 |
|
|
| Accumulated depreciation |
|
| Balance as at the beginning of the period / year | (1,082) | - | Charge for the period / year | (900) | (1,082) | Balance as at the end of the period / year | (1,982) | (1,082) | Net book value | 25,104 | 26,004 |
|
|
| Lease liabilities | 31 March 2020 | 31 December 2019 | Within one year | 3,183 | 3,183 | Later than one year but not later than five years | 12,732 | 12,732 | Later than five years | 12,732 | 12,732 |
| 28,647 | 28,647 | Future finance charges | (4,196) | (4,382) | Total lease liabilities | 24,451 | 24,265 |
Interest expense on leases amounted to Saudi Riyals 0.4 million during the period ended 31 March 2020 under “Other income - net” in the interim condensed statement of income (Three-months period ended 31 March 2019: Nil).
Short-term leases that were expensed during the three-months period ended 31 March 2020 amounted to Saudi Riyals 1.1 million (Three-months period ended 31 March 2019: 1.6 million). | 8 |
| Disclosure of investments [text block] |
6 Investments
Investments are comprised of the following:
| 31 March 2020 | 31 December 2019 | Insurance operations |
|
| Available-for-sale | 484,559 | 477,511 | Held-to-maturity | 78,801 | 78,805 | Total | 563,360 | 556,316 |
|
|
| Shareholders’ operations |
|
| Available-for-sale | 193,086 | 189,765 | Held-to-maturity | 60,000 | 60,000 | Total | 253,086 | 249,765 |
|
|
| Total investments | 816,446 | 806,081 |
Available-for-sale investments at 31 March 2020 include 1,923,078 shares (31 December 2019: 1,923,078 shares) in Najm for Insurance Services (“Najm”) and are held by the Company at Nil value.
Investments (continued)
Movement in available-for-sale investments is as follows:
| Insurance operations | Shareholders’ operations | Total |
|
|
|
| As at 1 January 2020 | 477,511 | 189,765 | 667,276 | Purchases | 39,679 | 24,037 | 63,716 | Disposals | (10,702) | (4,524) | (15,226) | Amortization of premium | (55) | (24) | (79) | Accretion of discount | 301 | 45 | 346 | Changes in fair value | (22,175) | (16,213) | (38,388) | As at 31 March 2020 | 484,559 | 193,086 | 677,645 |
| Insurance operations | Shareholders’ operations | Total |
|
|
|
| As of 1 January 2019 | 415,131 | 178,264 | 593,395 | Purchases | 138,206 | 50,692 | 188,898 | Disposals | (96,928) | (51,209) | (148,137) | Amortisation of premium | (116) | (56) | (172) | Accretion for the discount | 1,177 | 185 | 1,362 | Impairment | - | (1,295) | (1,295) | Changes in fair value | 20,041 | 13,184 | 33,225 | As at 31 December 2019 | 477,511 | 189,765 | 667,276 |
Movement in held-to-maturity investments is as follows:
| Insurance operations | Shareholders’ operations |
| 31 March 2020 | 31 December 2019 | 31 March 2020 | 31 December 2019 |
|
|
|
|
| Opening balance | 78,805 | 78,820 | 60,000 | 60,000 | Amortization of premium | (4) | (15) | - | - | Closing balance | 78,801 | 78,805 | 60,000 | 60,000 |
| 6 |
| Disclosure of investments held-to-maturity [text block] |
Movement in held-to-maturity investments is as follows:
| Insurance operations | Shareholders’ operations |
| 31 March 2020 | 31 December 2019 | 31 March 2020 | 31 December 2019 |
|
|
|
|
| Opening balance | 78,805 | 78,820 | 60,000 | 60,000 | Amortization of premium | (4) | (15) | - | - | Closing balance | 78,801 | 78,805 | 60,000 | 60,000 |
| 6 |
| Disclosure of investments in available-for-sale investments [text block] |
Available-for-sale investments at 31 March 2020 include 1,923,078 shares (31 December 2019: 1,923,078 shares) in Najm for Insurance Services (“Najm”) and are held by the Company at Nil value.
Investments (continued)
Movement in available-for-sale investments is as follows:
| Insurance operations | Shareholders’ operations | Total |
|
|
|
| As at 1 January 2020 | 477,511 | 189,765 | 667,276 | Purchases | 39,679 | 24,037 | 63,716 | Disposals | (10,702) | (4,524) | (15,226) | Amortization of premium | (55) | (24) | (79) | Accretion of discount | 301 | 45 | 346 | Changes in fair value | (22,175) | (16,213) | (38,388) | As at 31 March 2020 | 484,559 | 193,086 | 677,645 |
| Insurance operations | Shareholders’ operations | Total |
|
|
|
| As of 1 January 2019 | 415,131 | 178,264 | 593,395 | Purchases | 138,206 | 50,692 | 188,898 | Disposals | (96,928) | (51,209) | (148,137) | Amortisation of premium | (116) | (56) | (172) | Accretion for the discount | 1,177 | 185 | 1,362 | Impairment | - | (1,295) | (1,295) | Changes in fair value | 20,041 | 13,184 | 33,225 | As at 31 December 2019 | 477,511 | 189,765 | 667,276 |
| 6 |
| Disclosure of premiums/ contributions and insurance/ reinsurance or takaful/ retakaful balance receivables [text block] |
5 Premiums and reinsurers’ balances receivable - net
| 31 March 2020 | 31 December 2019 |
|
|
| Policyholders | 294,641 | 177,893 | Brokers and agents | 7,062 | 86 | Related parties | 11,226 | 22,739 | Reinsurers and other insurers | 31,095 | 35,254 |
| 344,024 | 235,972 | Less: Provision for doubtful debts | (46,537) | (45,537) |
| 297,487 | 190,435 |
Movement in provision for doubtful debts is as follows:
| 31 March 2020 | 31 December 2019 |
|
|
| Balance at the beginning of the period / year | 45,537 | 45,352 | Provision for the period / year | 1,000 | 185 | Balance at the end of the period / year | 46,537 | 45,537 |
| 5 |
| Disclosure of cash and cash equivalents [text block] |
4 Cash and cash equivalents
Cash and cash equivalents included in the interim condensed statement of financial position comprise the following:
| 31 March 2020 | 31 December 2019 | Bank balances and cash | 124,971 | 87,437 | Deposits maturing within 3 Month from the placement date | 130,050 | 147,403 |
| 255,021 | 234,840 |
Cash at banks are placed with counterparties that have investment grade credit ratings. As at 31 March 2020, deposits were placed with local banks with original maturities of less than three months from the date of placement and earned financial income at 2.00% to 2.50% (31 December 2019: 1.90% to 2.40%) per annum. | 4 |
| Disclosure of statutory deposit [text block] |
14 Statutory deposit
In accordance with Article 58 of the Insurance Implementing Regulations of SAMA, the Company is required to maintain a statutory deposit of not less than 10% of its paid-up capital. The statutory deposit is maintained with a Saudi Arabian bank and can be withdrawn only with the consent of SAMA. | 14 |
| Disclosure of zakat [text block] |
13 Zakat and income tax
Restatement
The change in accounting treatment for zakat and income tax (as explained in Note 3) has the following impact on the line items of the interim condensed statements of income and changes in equity:
For the three-month period ended 31 March 2020:
Financial statement impacted | Account | Before the restatement for the three-month period ended 31 March 2019 | Effect of the restatement | As restated as at and for the three-month period ended 31 March 2019 |
|
|
|
|
| Interim condensed statement of changes in equity | Total income for the period attributable to the shareholders | 26,833 | (5,141) | 21,692 |
|
|
|
|
| Interim condensed statement of changes in equity | Provision for zakat | (2,921) | 2,921 | - |
|
|
|
|
| Interim condensed statement of changes in equity | Provision for income tax | (2,220) | 2,220 | - |
|
|
|
|
| Interim condensed statement of income | Zakat expense | - | (2,921) | (2,921) |
|
|
|
|
| Interim condensed statement of income | Income tax expense | - | (2,220) | (2,220) |
|
|
|
|
| Interim condensed statement of income | Basic and diluted earnings per share | 0.58 | (0.15) | 0.43 |
Status of assessments
During 2019 and 2018, the GAZT issued assessments for the years 2013 through 2015 with additional liability amounting to Saudi Riyals 14.8 million. The Company filed an appeal with the General Secretariat of Tax Committees against the GAZT’s assessments and has obtained limited certificates for these years. The review of the Committee for Resolution of Tax Disputes and Violation is awaited.
Management is of the view that the level of existing provisions for zakat and income tax is presently sufficient. Zakat and income tax assessments for the years 2016 through 2018 are currently under review by the GAZT.
| 13 |
| Disclosure of income tax [text block] |
13 Zakat and income tax
Restatement
The change in accounting treatment for zakat and income tax (as explained in Note 3) has the following impact on the line items of the interim condensed statements of income and changes in equity:
For the three-month period ended 31 March 2020:
Financial statement impacted | Account | Before the restatement for the three-month period ended 31 March 2019 | Effect of the restatement | As restated as at and for the three-month period ended 31 March 2019 |
|
|
|
|
| Interim condensed statement of changes in equity | Total income for the period attributable to the shareholders | 26,833 | (5,141) | 21,692 |
|
|
|
|
| Interim condensed statement of changes in equity | Provision for zakat | (2,921) | 2,921 | - |
|
|
|
|
| Interim condensed statement of changes in equity | Provision for income tax | (2,220) | 2,220 | - |
|
|
|
|
| Interim condensed statement of income | Zakat expense | - | (2,921) | (2,921) |
|
|
|
|
| Interim condensed statement of income | Income tax expense | - | (2,220) | (2,220) |
|
|
|
|
| Interim condensed statement of income | Basic and diluted earnings per share | 0.58 | (0.15) | 0.43 |
Status of assessments
During 2019 and 2018, the GAZT issued assessments for the years 2013 through 2015 with additional liability amounting to Saudi Riyals 14.8 million. The Company filed an appeal with the General Secretariat of Tax Committees against the GAZT’s assessments and has obtained limited certificates for these years. The review of the Committee for Resolution of Tax Disputes and Violation is awaited.
Management is of the view that the level of existing provisions for zakat and income tax is presently sufficient. Zakat and income tax assessments for the years 2016 through 2018 are currently under review by the GAZT.
| 13 |
| Disclosure of classes of share capital [text block] |
17 Share capital
The authorized, issued and paid up capital of the Company is Saudi Riyals 500 million at 31 March 2020 (31 December 2019: Saudi Riyals 500 million) consisting of 50 million shares (31 December 2019: 50 million shares) of Saudi Riyals 10 each.
Shareholding structure of the Company as at 31 March 2020 and 31 December 2019 is as below. The shareholders of the Company are subject to zakat and income tax.
| No. of shares (thousands) | Saudi Riyals (thousands) |
|
|
| AXA Insurance Gulf B.S.C (c.) | 16,000 | 160,000 | AXA Mediterranean Holding SA | 9,000 | 90,000 | General public | 25,000 | 250,000 |
| 50,000 | 500,000 |
| 17 |
| Disclosure of statutory reserve [text block] |
15 Statutory reserve
In accordance with By-laws of the Company and Article 70(2)(g) of the Insurance Implementing Regulations issued by SAMA, the Company is required to transfer not less than 20% of its annual profits, after adjusting accumulated losses, to a statutory reserve until such reserve amounts to 100% of the paid-up share capital of the Company. This reserve is not available for distribution to the shareholders until the liquidation of the Company. | 15 |
| Disclosure of technical reserve for insurance/takaful/reinsurance/retakaful operations [text block] |
7 Technical reserves
7.1 Net outstanding claims and reserves
Net outstanding claims and reserves comprise of the following:
| 31 March 2020 | 31 December 2019 |
|
|
| Outstanding claims | 317,081 | 310,627 | Less: realizable value of salvage and subrogation | (58,957) | (50,623) |
| 258,124 | 260,004 | Claims incurred but not reported and other reserves | 728,985 | 700,963 |
| 987,109 | 960,967 | Less: |
|
| - Reinsurers’ share of outstanding claims | (78,148) | (84,450) | - Reinsurers’ share of claims incurred but not reported and other reserves | (69,766) | (50,577) |
| (147,914) | (135,027) | Net outstanding claims and reserves | 839,195 | 825,940 |
7.2 Movement in net unearned premiums
Movement in net unearned premiums comprise of the following:
| Gross | Reinsurance | Net |
|
|
|
| Balance as at the beginning of the period | 459,190 | (19,261) | 439,929 | Premium written during the period | 544,266 | (33,214) | 511,052 | Premium earned during the period | (345,889) | 29,082 | (316,807) | Balance as at the end of the period | 657,567 | (23,393) | 634,174 |
| Gross | Reinsurance | Net |
|
|
|
| Balance as at the beginning of the year | 388,193 | (18,275) | 369,918 | Premium written during the year | 1,409,777 | (88,054) | 1,321,723 | Premium earned during the year | (1,338,780) | 87,068 | (1,251,712) | Balance as at the end of the year | 459,190 | (19,261) | 439,929 |
| 7 |
| Disclosure of related party transactions [text block] |
12 Related party transactions and balances
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 three-month period ended 31 March 2020 and 2019, and the related balances:
| 31 March 2020 | 31 March 2019 | Major shareholders |
|
| Gross premiums from major shareholders | 262 | 6,531 | Reinsurance premiums ceded to major shareholders | 27,095 | 9,534 | Reinsurance commissions from major shareholders | 2,872 | 346 | Net claims paid to major shareholders | 3,248 | 3,331 | Reinsurers’ share of gross claims paid to major shareholders | 1,773 | 1,125 | Expenses charged by major shareholders | 728 | 653 |
|
|
| Entities controlled, jointly controlled or significantly influenced by related parties |
|
| Gross premiums from other related parties | 3,323 | 2,864 | Net claims paid to other related parties | 5,162 | 9,538 |
The compensation of key management personnel during the three-month period is as follows:
| 31 March 2020 | 31 March 2019 |
|
|
| Salaries and benefits | 2,681 | 3,085 | Employee benefit obligations | 144 | 146 |
| 2,825 | 3,231 |
Board of Directors fees for the period ended 31 March 2020 was Saudi Riyals 0.4 million (31 March 2019: Saudi Riyals 0.3 million).
The transactions with related parties are carried out at commercial terms and conditions. Compensation to key management personnel is on employment terms and as per the By-laws of the Company.
Due to a related party represents amounts payable to AXA Insurance Gulf B.S.c (c). | 12 |
| Disclosure of entity's operating segments [text block] |
11 Segmental information
Operating segments for the purpose of segmental information 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 its performance.
Transactions between the operating segments are on normal commercial terms and conditions. The revenue from external parties reported to the Board of Directors is measured in a manner consistent with that in the interim condensed statement of income. Segment assets and liabilities comprise operating assets and liabilities.
Segment assets do not include cash and cash equivalents, short-term deposits, premiums and reinsurers’ balances receivable - net, investments, prepaid expenses and other assets, long-term deposits, property and equipment, intangible assets, due from shareholders’ / insurance operations, goodwill, statutory deposit and accrued income on statutory deposit. Accordingly, they are included in unallocated assets. Segment liabilities do not include claims payable, accrued expenses and other liabilities, surplus distribution payable, reinsurers' balances payable, advance premiums, due to related party, employee benefit obligations, zakat and income tax, due to shareholders’ / insurance operations, and accrued income payable to SAMA. Accordingly, they are included in unallocated liabilities.
Segmental information (continued)
These unallocated assets and liabilities are not reported to chief operating decision maker under related segments and are monitored on a centralized basis.
For management purposes, the Company is organized into business units based on their products and services and has the following reportable segments:
Motor; Property and casualty; Health; and Protection.
Segment performance is evaluated based on profit or loss which, in certain respects, is measured differently from profit or loss in the interim condensed financial information.
Where intersegment transaction were to occur, transfer prices between operating segments are set on an arm’s length basis in a manner similar to transactions with third parties. Segment income, expense and results will then include those transfers between operating segments which will then be eliminated at the level of interim condensed financial information of the Company.
Segmental information (continued)
The segment information provided to the Company’s Board of Directors for the reportable segments for the Company’s total assets and liabilities at 31 March 2020 and 31 December 2019, its total revenues, expenses, and net income for the three-month period then ended are as follows:
| Insurance operations |
|
|
|
|
| 31 March 2020 (Unaudited) | Motor | Property | Health | Protection | Total | Shareholders’ operations | Grand total |
|
|
| and casualty |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Assets |
|
|
|
|
|
|
|
| Reinsurers’ share of unearned premiums | - | 16,835 | 5,754 | 804 | 23,393 | - | 23,393 |
| Reinsurers’ share of outstanding claims | 4,000 | 73,490 | 432 | 226 | 78,148 | - | 78,148 |
| Reinsurers’ share of claims incurred but not reported and other reserves | 19,099 | 49,665 | 416 | 586 | 69,766 | - | 69,766 |
| Deferred policy acquisition costs | 20,793 | 5,620 | 16,465 | 1,218 | 44,096 | - | 44,096 |
| Segment assets | 43,892 | 145,610 | 23,067 | 2,834 | 215,403 | - | 215,403 |
| Unallocated assets |
|
|
|
| 1,725,938 | 765,694 | 2,491,632 |
| Total assets |
|
|
|
| 1,941,341 | 765,694 | 2,707,035 |
|
|
|
|
|
|
|
|
|
| Liabilities and equity |
|
|
|
|
|
|
|
| Unearned premiums | 369,105 | 74,096 | 204,968 | 9,398 | 657,567 | - | 657,567 |
| Unearned reinsurance commission | - | 2,701 | 1,377 | 177 | 4,255 | - | 4,255 |
| Outstanding claims | 24,139 | 175,934 | 56,438 | 1,613 | 258,124 | - | 258,124 |
| Claims incurred but not reported and other reserves | 454,208 | 192,096 | 63,307 | 19,374 | 728,985 | - | 728,985 |
| Segment liabilities | 847,452 | 444,827 | 326,090 | 30,562 | 1,648,931 | - | 1,648,931 |
| Unallocated liabilities and equity |
|
|
|
| 292,410 | 765,694 | 1,058,104 |
| Total liabilities and equity |
|
|
|
| 1,941,341 | 765,694 | 2,707,035 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 11 | Segmental information (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Insurance operations |
|
|
|
|
|
| 31 December 2019 (Audited) | Motor | Property | Health | Protection | Total | Shareholders’ operations | Grand total |
|
|
| and casualty |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Assets |
|
|
|
|
|
|
|
| Reinsurers’ share of unearned premiums | - | 17,442 | 854 | 965 | 19,261 | - | 19,261 |
| Reinsurers’ share of outstanding claims | 4,195 | 80,389 | -34 | -100 | 84,450 | - | 84,450 |
| Reinsurers’ share of claims incurred but not reported and other reserve | 21,809 | 28,768 | - | - | 50,577 | - | 50,577 |
| Deferred policy acquisition costs | 12,547 | 5,015 | 11,309 | 794 | 29,665 | - | 29,665 |
| Segment assets | 38,551 | 131,614 | 12,129 | 1,659 | 183,953 | - | 183,953 |
| Unallocated assets |
|
|
|
| 1,587,180 | 746,006 | 2,333,186 |
| Total assets |
|
|
|
| 1,771,133 | 746,006 | 2,517,139 |
|
|
|
|
|
|
|
|
|
| Liabilities and equity |
|
|
|
|
|
|
|
| Unearned premiums | 220,849 | 64,352 | 167,361 | 6,628 | 459,190 | - | 459,190 |
| Unearned reinsurance commission | - | 3,063 | 179 | 269 | 3,511 | - | 3,511 |
| Outstanding claims | 27,690 | 180,588 | 50,924 | 802 | 260,004 | - | 260,004 |
| Claims incurred but not reported and other reserves | 452,990 | 165,881 | 64,868 | 17,224 | 700,963 | - | 700,963 |
| Segment liabilities | 701,529 | 413,884 | 283,332 | 24,923 | 1,423,668 | - | 1,423,668 |
| Unallocated liabilities and equity |
|
|
|
| 347,465 | 746,006 | 1,093,471 |
| Total liabilities and equity |
|
|
|
| 1,771,133 | 746,006 | 2,517,139 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 11 | Segmental information (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Insurance operations |
|
|
| | | | For the three-month period ended 31 March 2020 (Unaudited) | Motor | Property | Health | Protection | Total |
| Shareholders’ operations | Grand total |
|
| and casualty |
|
|
|
|
|
| Revenues |
|
|
|
|
|
|
|
| Gross premiums written |
|
|
|
|
|
|
|
| - Direct |
|
|
|
|
|
|
|
| - Large corporates | 229,321 | 12,344 | 37,968 | - | 279,633 |
| - | 279,633 | - Medium corporates | 60,350 | 47,082 | 75,770 | 12,338 | 195,540 |
| - | 195,540 | - Small corporates | 1,847 | 1,607 | 5,372 | - | 8,826 |
| - | 8,826 | - Micro enterprises | 792 | 689 | 2,302 | - | 3,783 |
| - | 3,783 | - Retail | 41,295 | 732 | 14,423 | - | 56,450 |
| - | 56,450 | - Reinsurance | - | 34 | - | - | 34 |
| - | 34 |
| 333,605 | 62,488 | 135,835 | 12,338 | 544,266 |
| - | 544,266 | Reinsurance premiums ceded |
|
|
|
|
|
|
|
| - Foreign | -1,086 | -19,071 | -7,408 | -4,594 | -32,159 |
| - | -32,159 | - Local | - | -1,055 | - | - | -1,055 |
| - | -1,055 |
| -1,086 | -20,126 | -7,408 | -4,594 | -33,214 |
| - | -33,214 |
|
|
|
|
|
|
|
|
| Net premiums written | 332,519 | 42,362 | 128,427 | 7,744 | 511,052 |
| - | 511,052 | Changes in unearned premiums | -148,256 | -9,744 | -37,607 | -2,770 | -198,377 |
| - | -198,377 | Changes in reinsurers’ share of unearned premiums | - | -607 | 4,900 | -161 | 4,132 |
| - | 4,132 | Net premiums earned | 184,263 | 32,011 | 95,720 | 4,813 | 316,807 |
| - | 316,807 | Reinsurance commissions | - | 1,905 | 569 | 731 | 3,205 |
| - | 3,205 | Total revenues | 184,263 | 33,916 | 96,289 | 5,544 | 320,012 |
| - | 320,012 |
|
|
|
|
|
|
|
|
| Underwriting costs and expenses |
|
|
|
|
|
|
|
| Gross claims paid | 136,614 | 11,454 | 73,716 | 2,211 | 223,995 |
| - | 223,995 | Reinsurers’ share of claims paid | -847 | -7,270 | -852 | -737 | -9,706 |
| - | -9,706 | Net claims and other benefits paid | 135,767 | 4,184 | 72,864 | 1,474 | 214,289 |
| - | 214,289 |
|
|
|
|
|
|
|
| (Continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
|
| 11 | Segmental information (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Insurance operations |
|
|
| | | | For the three-month period ended 31 March | Motor | Property | Health | Protection | Total |
| Shareholders’ operations | Grand total | 2020 (Unaudited) |
| and casualty |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Changes in outstanding claims | -3,551 | -4,654 | 5,514 | 811 | -1,880 |
| - | -1,880 | Changes in reinsurers’ share of outstanding claims | 195 | 6,899 | -466 | -326 | 6,302 |
| - | 6,302 | Changes in claims incurred but not reported and other reserves | 1,218 | 26,215 | -1,561 | 2,150 | 28,022 |
| - | 28,022 | Changes in reinsurers’ share of claims incurred but not reported and other reserves | 2,710 | -20,897 | -416 | -586 | -19,189 |
| - | -19,189 | Net claims and other benefits incurred | 136,339 | 11,747 | 75,935 | 3,523 | 227,544 |
| - | 227,544 | Policy acquisition costs | 10,831 | 4,640 | 9,722 | 1,225 | 26,418 |
| - | 26,418 | Total underwriting costs and expenses | 147,170 | 16,387 | 85,657 | 4,748 | 253,962 |
| - | 253,962 | Net underwriting income | 37,093 | 17,529 | 10,632 | 796 | 66,050 |
| - | 66,050 |
|
|
|
|
|
|
|
|
| Other operating (expenses) income |
|
|
|
|
|
|
|
| General and administrative expenses | -23,987 | -4,166 | -12,461 | -627 | -41,241 |
| -358 | -41,599 | Other income - net | - | - | - | - | 10,422 |
| 3,962 | 14,384 | Total other operating expenses, net | -23,987 | -4,166 | -12,461 | -627 | -30,819 |
| 3,604 | -27,215 |
|
|
|
|
|
|
|
|
| Total income before surplus attribution, zakat and income tax |
|
|
|
|
|
| 38,835 |
|
|
|
|
|
|
|
|
| Surplus attributed to the insurance operations |
|
|
|
|
|
| -3,521 | Total income for the period attributable to the shareholders |
|
|
|
|
| 35,314 |
|
|
|
|
|
|
|
|
| Zakat expense |
|
|
|
|
|
|
| -3,319 | Income tax expense |
|
|
|
|
|
|
| -2,725 | Total income for the period attributable to the shareholders |
|
|
|
|
| 29,270 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 11 | Segmental information (continued) |
|
|
|
|
|
| Insurance operations |
|
|
|
|
|
| For the three-month period ended 31 March 2019 (Unaudited) | Motor | Property | Health | Protection | Total | Shareholders’ operations | Grand total |
|
|
| and casualty |
|
|
|
|
|
| Revenues |
|
|
|
|
|
|
|
| Gross premiums written |
|
|
|
|
|
|
|
| - Direct |
|
|
|
|
|
|
|
| - Large corporates | 289,384 | 7,534 | 27,704 | 5,452 | 330,074 | - | 330,074 |
| - Medium corporates | 50,336 | 36,901 | 75,085 | - | 162,322 | - | 162,322 |
| - Small enterprises | 1,841 | 239 | 5,097 | - | 7,177 | - | 7,177 |
| - Micro enterprises | 789 | 104 | 2,185 | - | 3,078 | - | 3,078 |
| - Retail | 34,103 | 707 | 5,590 | - | 40,400 | - | 40,400 |
| - Reinsurance | - | 1,580 | - | - | 1,580 | - | 1,580 |
|
| 376,453 | 47,065 | 115,661 | 5,452 | 544,631 | - | 544,631 |
| Reinsurance premiums ceded: |
|
|
|
|
| - |
|
| - Foreign | -959 | -14,089 | -6 | -399 | -15,453 | - | -15,453 |
| - Local | - | -407 | - | - | -407 | - | -407 |
|
| -959 | -14,496 | -6 | -399 | -15,860 | - | -15,860 |
| Net premiums written | 375,494 | 32,569 | 115,655 | 5,053 | 528,771 | - | 528,771 |
| Changes in unearned premiums | -185,216 | -3,498 | -30,334 | -2,010 | -221,058 | - | -221,058 |
| Changes in reinsurers’ share of unearned premiums | - | -3,548 | -569 | -386 | -4,503 | - | -4,503 |
| Net premiums earned | 190,278 | 25,523 | 84,752 | 2,657 | 303,210 | - | 303,210 |
| Reinsurance commissions | -13 | 2,458 | 121 | 233 | 2,799 | - | 2,799 |
| Total revenues | 190,265 | 27,981 | 84,873 | 2,890 | 306,009 | - | 306,009 |
|
|
|
|
|
|
|
|
|
| Underwriting costs and expenses |
|
|
|
|
|
|
|
| Gross claims paid | 125,980 | 11,337 | 72,652 | 429 | 210,398 | - | 210,398 |
| Reinsurers’ share of claims paid | -4,530 | -1,565 | -404 | -156 | -6,655 | - | -6,655 |
| Net claims and other benefits paid | 121,450 | 9,772 | 72,248 | 273 | 203,743 | - | 203,743 |
|
|
|
|
|
|
|
| (Continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 11 | Segmental information (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Insurance operations |
|
|
| | | | For the three-month period ended 31 March 2019 (Unaudited) | Motor | Property | Health | Protection | Total |
| Shareholders’ operations | Grand total |
|
| and casualty |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Changes in outstanding claims | 2,449 | -2,794 | 5,129 | 1,314 | 6,098 |
| - | 6,098 | Changes in reinsurance share of outstanding claims | 298 | 76 | 4 | -140 | 238 |
| - | 238 | Changes in claims incurred but not reported and other reserves | 17,779 | 9,336 | -9,070 | -907 | 17,138 |
| - | 17,138 | Changes in reinsurance share of claims incurred but not reported and other reserves | -1,785 | -2,458 | - | - | -4,243 |
| - | -4,243 | Net claims and other benefits incurred | 140,191 | 13,932 | 68,311 | 540 | 222,974 |
| - | 222,974 | Policy acquisition costs | 11,865 | 4,270 | 5,744 | 468 | 22,347 |
| - | 22,347 | Total underwriting costs and expenses | 152,056 | 18,202 | 74,055 | 1,008 | 245,321 |
| - | 245,321 | Net underwriting income | 38,209 | 9,779 | 10,818 | 1,882 | 60,688 |
| - | 60,688 |
|
|
|
|
|
|
|
|
| Other operating (expenses) income |
|
|
|
|
|
|
|
| General and administrative expenses | -27,384 | -3,672 | -12,197 | -382 | -43,635 |
| -443 | -44,078 | Other income - net | - | - | - | - | 9,116 |
| 3,725 | 12,841 | Total other operating expenses, net | -27,384 | -3,672 | -12,197 | -382 | -34,519 |
| 3,282 | -31,237 |
|
|
|
|
|
|
|
|
| Total income before surplus attribution, zakat and income tax |
|
|
|
|
|
| 29,451 |
|
|
|
|
|
|
|
|
| Surplus attributed to the insurance operations |
|
|
|
|
|
|
| -2,618 | Total income for the period attributable to the shareholders |
|
|
|
|
|
| 26,833 |
|
|
|
|
|
|
|
|
| Zakat expense |
|
|
|
|
|
|
| -2,921 | Income tax expense |
|
|
|
|
|
|
| -2,220 | Total income for the period attributable to the shareholders |
|
|
|
|
|
| 21,692 |
| 11 |
| Disclosure of capital management [text block] |
18 Capital management
The Company’s objectives when managing capital are:
To comply with the insurance capital requirements as set out in the Law. The Company’s current paid-up share capital is in accordance with Article 3 of the Law; To safeguard the Company’s ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for other stakeholders; and To provide an adequate return to shareholders by pricing insurance contracts commensurately with the level of risk.
As per Article 66 of the Regulations, the Company shall maintain a solvency margin equivalent to the highest of the following three methods:
Minimum capital requirement of Saudi Riyals 200 million; Premium solvency margin; or Claims solvency margin.
The Company’s management, through various scenario analyses as required by SAMA, has assessed the potential impact of Covid-19 on the Company’s solvency margin by performing stress testing for various variables such as gross premium growth, increase in employee cost, year-to-date loss ratios, outstanding premium provisions etc. and the related impact on the revenue, profitability, loss ratios and solvency ratios. The Company’s management has concluded that, based on the stress testing performed, the solvency margin of the Company is adequate at 31 March 2020. As the situation is fluid and rapidly evolving, the Company will continue to reassess its position and the related impact on a regular basis. | 18 |
| Disclosure of commitments and contingencies, general [text block] |
9 Commitments and contingencies
(i)The Company has issued various bank guarantees amounting to Saudi Riyals 4.9 million (31 December 2019: Saudi Riyals 5.8 million) in the ordinary course of business.
(ii)The Company operates in the insurance industry and is subject to legal proceedings in the ordinary course of business. While it is not practicable to forecast or determine the final results of all pending or threatened legal proceedings, management does not believe that such proceedings (including litigations) will have a material effect on its results and financial position. | 9 |
| Disclosure of fair value of financial assets and liabilities [text block] |
10 Determination of fair value and fair value hierarchy
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 advantages accessible market for the asset or liability
The fair values of on-balance sheet financial instruments are not significantly different from their carrying amounts included in the interim condensed financial information.
Determination of fair value and fair value hierarchy (continued)
The 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; and
Level 3: valuation techniques for which any significant input is not based on observable market data.
The following table shows the carrying amount and fair values 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.
| Carrying value | Level 1 | Level 2 | Level 3 | Total |
|
|
|
|
|
| 31 March 2020 |
|
|
|
|
|
|
|
|
|
|
| Financial assets measured at fair value (Insurance operations) |
|
|
|
|
| Available-for-sale investments |
|
|
|
|
| - Government bonds | 381,125 | 381,125 | - | - | 381,125 | - Other bonds | 83,563 | 83,563 | - | - | 83,563 | - Mutual funds | 19,871 | 19,871 | - | - | 19,871 |
| 484,559 | 484,559 | - | - | 484,559 |
|
|
|
|
|
| Financial assets measured at fair value (Shareholders’ operations) |
|
|
|
|
| Available-for-sale investments |
|
|
|
|
| - Government bonds | 116,519 | 116,519 | - | - | 116,519 | - Other bonds | 17,708 | 17,708 | - | - | 17,708 | - Mutual funds | 8,523 | 8,523 | - | - | 8,523 | - Equities | 50,336 | 50,336 | - | - | 50,336 |
| 193,086 | 193,086 | - | - | 193,086 |
Determination of fair value and fair value hierarchy (continued)
| Carrying value | Level 1 | Level 2 | Level 3 | Total |
|
|
|
|
|
| 31 December 2019 |
|
|
|
|
|
|
|
|
|
|
| Financial assets measured at fair value (Insurance operations) |
|
|
|
|
| Available-for-sale investments |
|
|
|
|
| - Government bonds | 360,940 | 360,940 | - | - | 360,940 | - Other bonds | 95,166 | 95,166 | - | - | 95,166 | - Mutual funds | 21,405 | 21,405 | - | - | 21,405 |
| 477,511 | 477,511 | - | - | 477,511 |
|
|
|
|
|
| Financial assets measured at fair value (Shareholders’ operations) |
|
|
|
|
| Available-for-sale investments |
|
|
|
|
| - Government bonds | 98,372 | 98,372 | - | - | 98,372 | - Other bonds | 19,679 | 19,679 | - | - | 19,679 | - Mutual funds | 9,208 | 9,208 | - | - | 9,208 | - Equities | 62,506 | 62,506 | - | - | 62,506 |
| 189,765 | 189,765 | - | - | 189,765 |
The Company has strengthened its credit risk management policies to address the fast changing and evolving risks posed by the current circumstances caused by the Covid-19 pandemic as explained in Note 2. These include review of credit concentrations at granular economic sector, region, counterparty level and take appropriate action where required | 10 |
| Disclosure of comparative figures [text block] |
21 Comparative figures
Certain amounts in the comparative interim condensed financial information have been reclassified to conform to the presentation of the interim condensed financial information for the three-month period ended 31 March 2020. | 21 |
| Disclosure of board of director's approval of the financial statements [text block] |
Approval of the interim condensed financial information
The interim condensed financial information has been approved by the Board of Directors on 2 June 2020. | 22 |
| Disclosure of other notes relevant to understanding of financial statements [text block] |
16 Performance share reserve
AXA Group (the “Group”) has introduced a performance share based plan for employees of AXA entities world-wide which is designed to reward them for their role in achievement of the Group’s long-term objectives. This scheme incentivizes employees after completion of certain number of years with the Company, with shares of AXA Societe Anonyme (“AXA SA”) without any cost to employees. These shares are issued outside the Kingdom of Saudi Arabia and employees have the right to receive at the settlement date, a certain number of AXA SA shares based on the achievement of performance criteria defined by AXA SA and vesting period. The Company absorbs the cost of these shares under a group recharge arrangement, paid directly to AXA SA.
As at 31 March 2020, the Company recognised changes in the performance share reserve of Saudi Riyals 0.2 million (31 March 2019: Saudi Riyals 0.08 million). During the period 31 March 2020, the Company has recognised an expense amounting to Saudi Riyals 0.3 million (31 March 2019: Saudi Riyals 0.08 million) in the interim condensed statement of income with respect to performance shares. 20 Supplementary information
INTERIM CONDENSED STATEMENT OF FINANCIAL POSITION
| 31 March 2020 (Unaudited) | 31 December 2019 (Audited) |
| Insurance operations | Share-holders’ operations | Total | Insurance operations | Share-holders’ operation | Total | Assets |
|
|
|
|
|
| Cash and cash equivalents | 224,373 | 30,648 | 255,021 | 209,030 | 25,810 | 234,840 | Short-term deposits | 374,355 | 270,774 | 645,129 | 374,355 | 239,166 | 613,521 | Premiums and reinsurers’ balances receivable - net | 297,487 | - | 297,487 | 190,435 | - | 190,435 | Reinsurers’ share of unearned premiums | 23,393 | - | 23,393 | 19,261 | - | 19,261 | Reinsurers’ share of outstanding claims | 78,148 | - | 78,148 | 84,450 | - | 84,450 | Reinsurers’ share of claims incurred but not reported and other reserves | 69,766 | - | 69,766 | 50,577 | - | 50,577 | Deferred policy acquisition costs | 44,096 | - | 44,096 | 29,665 | - | 29,665 | Investments | 563,360 | 253,086 | 816,446 | 556,316 | 249,765 | 806,081 | Prepaid expenses and other assets | 20,786 | 1,148 | 21,934 | 17,188 | - | 17,188 | Long-term deposits | 190,721 | 47,398 | 238,119 | 190,721 | 45,000 | 235,721 | Right-of-use assets | 25,104 | - | 25,104 | 26,004 | - | 26,004 | Property and equipment | 18,611 | - | 18,611 | 10,980 | - | 10,980 | Intangible assets | 11,141 | - | 11,141 | 12,151 | - | 12,151 | Due from shareholders’/ insurance operations | - | 57,412 | 57,412 | - | 86,815 | 86,815 | Goodwill | - | 50,000 | 50,000 | - | 50,000 | 50,000 | Statutory deposit | - | 50,000 | 50,000 | - | 45,000 | 45,000 | Accrued income on statutory deposit | - | 5,228 | 5,228 | - | 4,450 | 4,450 | Total assets | 1,941,341 | 765,694 | 2,707,035 | 1,771,133 | 746,006 | 2,517,139 |
|
|
|
|
|
| (Continued) |
20 Supplementary information (continued)
INTERIM CONDENSED STATEMENT OF FINANCIAL POSITION (continued)
| 31 March 2020 (Unaudited) | 31 December 2019 (Audited) |
| Insurance operations | Share-holders’ operations | Total | Insurance operations | Share-holders’ operations | Total | Liabilities |
|
|
|
|
|
| Accrued and other liabilities | 105,440 | 1,551 | 106,991 | 111,013 | 1,989 | 113,002 | Surplus distribution payable | 19,490 | - | 19,490 | 20,091 | - | 20,091 | Reinsurers' balances payable | 35,445 | - | 35,445 | 27,294 | - | 27,294 | Advance premiums | 23,984 | - | 23,984 | 31,189 | - | 31,189 | Unearned premiums | 657,567 | - | 657,567 | 459,190 | - | 459,190 | Unearned reinsurance commission | 4,255 | - | 4,255 | 3,511 | - | 3,511 | Outstanding claims | 258,124 | - | 258,124 | 260,004 | - | 260,004 | Claims incurred but not reported and other reserves | 728,985 | - | 728,985 | 700,963 | - | 700,963 | Lease liabilities | 24,451 | - | 24,451 | 24,265 | - | 24,265 | Due to a related party | 4,246 | - | 4,246 | 2,616 | - | 2,616 | Employee benefit obligations | 30,557 | - | 30,557 | 30,622 | - | 30,622 | Zakat and income tax | - | 49,359 | 49,359 | - | 43,315 | 43,315 | Due to shareholders’/ insurance operations | 57,412 | - | 57,412 | 86,815 | - | 86,815 | Accrued income payable to SAMA | - | 5,228 | 5,228 | - | 4,450 | 4,450 | Total liabilities | 1,949,956 | 56,138 | 2,006,094 | 1,757,573 | 49,754 | 1,807,327 |
|
|
|
|
|
|
| Equity |
|
|
|
|
|
| Share capital | - | 500,000 | 500,000 | - | 500,000 | 500,000 | Statutory reserve | - | 55,152 | 55,152 | - | 49,298 | 49,298 | Performance share reserve | - | 1,736 | 1,736 | - | 1,489 | 1,489 | Retained earnings | - | 162,499 | 162,499 | - | 139,083 | 139,083 | Fair value reserve on investments | (8,615) | (9,831) | (18,446) | 13,560 | 6,382 | 19,942 | Total equity | (8,615) | 709,556 | 700,941 | 13,560 | 696,252 | 709,812 | Total liabilities and equity | 1,941,341 | 765,694 | 2,707,035 | 1,771,133 | 746,006 | 2,517,139 |
|
|
|
|
|
|
|
20 Supplementary information (continued)
INTERIM CONDENSED STATEMENT OF INCOME FOR THE THREE-MONTHS PERIOD ENDED 31 MARCH (Unaudited)
| Three-month period ended 31 March 2020 | Three-month period ended 31 March 2019 |
| Insurance operations | Share-holders’ operations | Total | Insurance operations | Share-holders’ operations | Total | Revenues |
|
|
|
|
|
| Gross premiums written |
|
|
|
|
|
| | 544,232 | - | 544,232 | 543,051 | - | 543,051 | | 34 | - | 34 | 1,580 | - | 1,580 |
| 544,266 | - | 544,266 | 544,631 | - | 544,631 | Reinsurance premiums ceded: |
|
|
|
|
|
| | (32,159) | - | (32,159) | (15,453) | - | (15,453) | | (1,055) | - | (1,055) | (407) | - | (407) |
| (33,214) | - | (33,214) | (15,860) | - | (15,860) | Net premiums written | 511,052 | - | 511,052 | 528,771 | - | 528,771 | Changes in unearned premiums | (198,377) | - | (198,377) | (221,058) | - | (221,058) | Changes in reinsurers’ share of unearned premiums | 4,132 | - | 4,132 | (4,503) | - | (4,503) | Net premiums earned | 316,807 | - | 316,807 | 303,210 | - | 303,210 | Reinsurance commissions | 3,205 | - | 3,205 | 2,799 | - | 2,799 | Total revenues | 320,012 | - | 320,012 | 306,009 | - | 306,009 |
|
|
|
|
|
|
| Underwriting costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
| Gross claims paid | 223,995 | - | 223,995 | 210,398 | - | 210,398 | Reinsurers’ share of claims paid | (9,706) | - | (9,706) | (6,655) | - | (6,655) | Net claims and other benefits paid | 214,289 | - | 214,289 | 203,743 | - | 203,743 | Changes in outstanding claims | (1,880) | - | (1,880) | 6,098 | - | 6,098 | Changes in reinsurance share of outstanding claims | 6,302 | - | 6,302 | 238 | - | 238 | Changes in claims incurred but not reported and other reserves | 28,022 | - | 28,022 | 17,138 | - | 17,138 | Changes in reinsurance share of claims incurred but not reported and other reserves | (19,189) | - | (19,189) | (4,243) | - | (4,243) |
|
|
|
|
|
| (Continued) |
20 Supplementary information (continued)
INTERIM CONDENSED STATEMENT OF INCOME FOR THE THREE-MONTH PERIOD ENDED 31 MARCH (Unaudited) (continued)
| Three-month period ended 31 March 2020 | Three-month period ended 31 March 2019 |
| Insurance operations | Share-holders’ operations | Total | Insurance operations | Share-holders’ operations | Total |
|
|
|
|
|
|
| Net claims and other benefits incurred | 227,544 | - | 227,544 | 222,974 | - | 222,974 | Policy acquisition costs | 26,418 | - | 26,418 | 22,347 | - | 22,347 | Total underwriting costs and expenses | 253,962 | - | 253,962 | 245,321 | - | 245,321 |
|
|
|
|
|
|
| Net underwriting income | 66,050 | - | 66,050 | 60,688 | - | 60,688 |
|
|
|
|
|
|
| Other operating (expenses) income |
|
|
|
|
|
| General and administrative expenses | (41,241) | (358) | (41,599) | (43,635) | (443) | (44,078) | Other income - net | 10,422 | 3,962 | 14,384 | 9,116 | 3,725 | 12,841 | Total other operating expenses, net | (30,819) | 3,604 | (27,215) | (34,519) | 3,282 | (31,237) |
|
|
|
|
|
|
| Total income before surplus attribution, zakat and income tax | 35,231 | 3,604 | 38,835 | 26,169 | 3,282 | 29,451 |
|
|
|
|
|
|
| Zakat expense (Note 2) | - | (3,319) | (3,319) | - | (2,921) | (2,921) | Income tax expense (Note 2) | - | (2,725) | (2,725) | - | (2,220) | (2,220) |
|
|
|
|
|
|
| Total income (loss) for the period | 35,231 | (2,440) | 32,791 | 26,169 | (1,859) | 24,310 |
|
|
|
|
|
|
| Surplus transferred to shareholders’ operations | (31,710) | 31,710 | - | (23,551) | 23,551 | - |
|
|
|
|
|
|
| Total income for the period after transfer of insurance operations surplus | 3,521 | 29,270 | 32,791 | 2,618 | 21,692 | 24,310 |
|
|
|
|
|
|
|
20 Supplementary information (continued)
INTERIM CONDENSED STATEMENT OF COMPREHENSIVE INCOME FOR THE THREE-MONTH PERIOD ENDED 31 MARCH (Unaudited)
| Three-month period ended 31 March 2020 | Three-month period ended 31 March 2019 |
| Insurance operations | Share-holders’ operations | Total | Insurance operations | Share-holders’ operations | Total |
|
|
|
|
|
|
| Total income for the period after transfer of insurance operations surplus | 3,521 | 29,270 | 32,791 | 2,618 | 21,692 | 24,310 |
|
|
|
|
|
|
| Other comprehensive (loss) income: |
|
|
|
|
|
|
|
|
|
|
|
|
| Items that will be reclassified to the interim condensed statement of income in subsequent period |
|
|
|
|
|
| Net change in fair value of available-for-sale investments | (22,175) | (16,213) | (38,388) | 8,077 | 5,761 | 13,838 | Total comprehensive (loss) income for the period | (18,654) | 13,057 | (5,597) | 10,695 | 27,453 | 38,148 |
20 Supplementary information (continued)
INTERIM CONDENSED STATEMENT OF CASH FLOWS FOR THE THREE-MONTH PERIOD ENDED 31 MARCH (Unaudited)
| Three-month period ended 31 March 2020 | Three-month period ended 31 March 2019 | | | |
| Insurance operations | Share-holders’ operations | Total | Insurance operations | Share-holders’ operations | Total | Cash flows from operating activities |
|
|
|
|
|
| Total income before surplus attribution, zakat and income tax | 35,231 | 3,604 | 38,835 | 26,169 | 3,282 | 29,451 |
|
|
|
|
|
|
| Adjustments for non-cash items: |
|
|
|
|
|
| Depreciation of property and equipment | 1,203 | - | 1,203 | 696 | - | 696 | Depreciation of right-of-use assets | 900 | - | 900 | - | - | - | Amortization of intangible assets | 1,490 | - | 1,490 | 1,415 | - | 1,415 | Interest on leases | 186 | - | 186 | - | - | - | Provision (reversal) for doubt debts - net | 1,000 | - | 1,000 | (726) | - | (726) | Accretion of discount on available-for-sale investments | (301) | (45) | (346) | (277) | (60) | (337) | Amortization of premium on available-for-sale investments | 55 | 24 | 79 | 38 | 13 | 51 | Amortization of premium on held-to-maturity investments | 4 | - | 4 | 4 | - | 4 | Performance share reserve | - | 282 | 282 | - | 81 | 81 | Provision for employee benefit obligations | 919 | - | 919 | 859 | - | 859 |
|
|
|
|
|
|
| Changes in operating assets and liabilities: |
|
|
|
|
|
| Premiums and reinsurers’ balances receivable - net | (108,052) | - | (108,052) | (192,008) | - | (192,008) | Reinsurers’ share of unearned premiums | (4,132) | - | (4,132) | 4,503 | - | 4,503 | Reinsurers’ share of outstanding claims | 6,302 | - | 6,302 | 238 | - | 238 | Reinsurers’ share of claims incurred but not reported | (19,189) | - | (19,189) | (4,243) | - | (4,243) | Deferred policy acquisition costs | (14,431) | - | (14,431) | (15,066) | - | (15,066) |
|
|
|
|
|
| (Continued) |
20 Supplementary information (continued)
INTERIM CONDENSED STATEMENT OF CASH FLOWS FOR THE THREE-MONTH PERIOD ENDED 31 MARCH (Unaudited) (continued)
| Three-month period ended 31 March 2020 | Three-month period ended 31 March 2019 |
| Insurance operations | Share-holders’ operations | Total | Insurance operations | Share-holders’ operations | Total |
|
|
|
|
|
|
| Prepaid expenses and other assets | (3,598) | (1,148) | (4,746) | (1,147) | (985) | (2,132) | Accrued income on statutory deposit | - | (778) | (778) | - | (321) | (321) | Claims payable, accrued expenses and other liabilities | (5,573) | (438) | (6,011) | (2,797) | 306 | (2,491) | Surplus distribution paid | (4,122) | - | (4,122) | (280) | - | (280) | Reinsurers' balances payable | 8,151 | - | 8,151 | (2,521) | - | (2,521) | Advance premiums | (7,205) | - | (7,205) | (2,582) | - | (2,582) | Unearned premiums | 198,377 | - | 198,377 | 221,058 | - | 221,058 | Unearned reinsurance commission | 744 | - | 744 | (1,102) | - | (1,102) | Outstanding claims | (1,880) | - | (1,880) | 6,098 | - | 6,098 | Claims incurred but not reported and other reserves | 28,022 | - | 28,022 | 17,138 | - | 17,138 | Due to a related party | 1,630 | - | 1,630 | 1,712 | - | 1,712 | Employee benefit obligations paid | (984) | - | (984) | (705) | - | (705) | Accrued income payable to SAMA | - | 778 | 778 | - | 321 | 321 |
| 114,747 | 2,279 | 117,026 | 56,474 | 2,637 | 59,111 | Due from shareholders’ operations | (61,113) | 61,113 | - | (50,253) | 50,253 | - | Net cash generated from operating activities | 53,634 | 63,392 | 117,026 | 6,221 | 52,890 | 59,111 |
|
|
|
|
|
| (Continued) |
20 Supplementary information (continued)
INTERIM CONDENSED STATEMENT OF CASH FLOWS FOR THE THREE-MONTH PERIOD ENDED MARCH 31 (Unaudited) (continued)
| Three-month period ended 31 March 2020 | Three-month period ended 31 March 2019 |
| Insurance operations | Share-holders’ operations | Total | Insurance operations | Share-holders’ operations | Total | Cash flows from investing activities |
|
|
|
|
|
| Placements in short-term deposits | - | (108,761) | (108,761) | - | (51,498) | (51,498) | Proceeds from disposals of short-term deposit | - | 77,153 | 77,153 | 145,298 | - | 145,298 | Placement in statutory deposit | - | (5,000) | (5,000) | - | - | - | Placements in long-term deposits | - | (22,398) | (22,398) | - | - | - | Proceeds from disposals in long term deposits | - | 20,000 | 20,000 | - | - | - | Purchases of investments | (39,679) | (24,037) | (63,716) | (16,964) | (7,481) | (24,445) | Proceeds from disposal of investments | 10,702 | 4,524 | 15,226 | 12,185 | 6,223 | 18,408 | Purchases of property and equipment | (8,834) | - | (8,834) | (127) | - | (127) | Purchases of intangible assets | (480) | - | (480) | - | - | - | Net cash (used in) generated from investing activities | (38,291) | (58,519) | (96,810) | 140,392 | (52,756) | 87,636 |
|
|
|
|
|
|
| Cash flows from financing activity |
|
|
|
|
|
| Performance shares reserve - settlement | - | (35) | (35) | - | - | - |
|
|
|
|
|
|
| Net change in cash and cash equivalents | 15,343 | 4,838 | 20,181 | 146,613 | 134 | 146,747 | Cash and cash equivalents, beginning of the period | 209,030 | 25,810 | 234,840 | 46,064 | - | 46,064 | Cash and cash equivalents, end of the period | 224,373 | 30,648 | 255,021 | 192,677 | 134 | 192,811 |
|
|
|
|
|
|
| Supplemental cash flow information: |
|
|
|
|
|
| Changes in fair value of available-for sale-investments | (22,175) | (16,213) | (38,388) | 8,077 | 5,761 | 13,838 |
23 Subsequent events
In response to the Covid-19 pandemic, SAMA issued decree 189 (the “Decree”) dated 8 March 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 two months as well as providing two months of additional coverage for all new retail motor insurance policies written within one month of the date of the Decree. The Company’s management believes the requirements of the Decree to be a non-adjusting event. | 16,20,23 |
