| 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] | Wataniya Insurance Company (the “Company”) is a Saudi Joint Stock Company incorporated in the Kingdom of Saudi Arabia under Commercial Registration No. 4030200981 dated 1 Jumada II 1431H (corresponding to May 15, 2010) and Industry’s Resolution number 158/K dated Jumad-ul-Awal 12, 1431H (corresponding to April 26, 2010). The Registered Office address of the Company is Juffali Building, Madina Road, Jeddah, Kingdom of Saudi Arabia.The Company is licensed to conduct insurance business in Saudi Arabia under Cooperative insurance principles in accordance with Royal Decree No M/53 dated 21 Shawwal 1430H (corresponding to October 10, 2009) pursuant to Council of Ministers’ Resolution No. 330 dated Shawwal 16,1430H (corresponding to October 5, 2009). The Company was listed on the Saudi Arabian stock market (Tadawul) on September 6, 2010. The objectives of the Company are to provide general insurance and related services in accordance with its by-laws and applicable regulations in the Kingdom of Saudi Arabia. | 1 |
| Disclosure of basis of preparation of financial statements [text block] | (a)Statement of compliance The interim condensed financial statements of the Company have been prepared in accordance with ‘International Accounting Standard 34 - Interim Financial Reporting ("IAS 34") as endorsed in the Kingdom of Saudi Arabia and other standards and pronouncement issued by Saudi Organisation for Certified Public Accountants (“SOCPA”). The interim condensed financial statements are prepared under the going concern basis and the historical cost convention, except for the measurement of investments at their fair value and liabilities for cash-settled-share based payments and defined benefit obligations [Employees’ end of service benefits (“EOSBs”)] recorded at the present value. The Company’s interim statement of financial position is presented in order of liquidity. Except for property and equipment, intangible assets, statutory deposit, end-of-service indemnities and warranty and engineering related unearned premiums, unearned reinsurance commission, deferred policy acquisition cost, outstanding claims, claims incurred but not reported and technical reserves, all other assets and liabilities are of short-term nature, unless, stated otherwise.As required by the Saudi Arabian Insurance Regulations (the Implementation Regulations), the Company maintains separate books of accounts for “Insurance Operations” and “Shareholders’ Operations”. Accordingly, assets, liabilities, revenues and expenses clearly attributable to either operation, are recorded in the respective accounts. The interim statements of financial position, statement of income, comprehensive income and cash flows of the insurance operations and shareholders operations which are presented in Note 21 have been provided as supplementary information to comply with requirements of the guidelines issued by SAMA Implementing Regulations and is not required by International Financial Reporting Standards (IFRS).The interim condensed financial statements may not be considered indicative of the expected results for the full year.The interim condensed financial statements are expressed in Saudi Arabian Riyals (SR) and are rounded off to the nearest thousands.The interim condensed financial information do not include all of the information required for full annual financial information and should be read in conjunction with the annual financial statement as of and for the year ended December 31, 2019.(b) Critical accounting judgments estimates and assumptions The preparation of interim condensed financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense, and the accompanying disclosures, and the disclosure of contingent liabilities. Actual results may differ from these estimates. 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. For further details please see note 23 to these interim condensed financial statements. Management will continue to assess the situation and reflect any required changes in future reporting periods.(c) Seasonality of operations There are no seasonal changes that may affect insurance operations of the Company. | 2 |
| Disclosure of new standards and amendments in standards [text block] | The accounting policies used in the preparation of these interim condensed financial statements are consistent with those used in the preparation of the annual financial statements for the year ended December 31, 2019 except as explained below:New IFRS, International Financial Reporting and Interpretations Committee’s interpretations (IFRIC) and amendments thereof, adopted by the CompanyThe following new standards, interpretations, amendments and revisions to existing standards, which were issued by the International Accounting Standards Board (IASB) have been effective from January 1, 2020, as applicable:Amendments to IFRS 7, IFRS 9 and IAS 39: Interest Rate Benchmark ReformA fundamental review and reform of major interest rate benchmarks is being undertaken globally. The InternationalAccounting Standards Board (“IASB”) is engaged in a two-phase process of amending its guidance to assist in a smoother transition away from IBOR.Phase (1) - The first phase of amendments to IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures focused on hedge accounting issues. The final amendments, issued in September 2019, amended specific hedge accounting requirements to provide relief from the potential effects of the uncertainty caused by IBOR reform. The amendments are effective from 1 January 2020 and are mandatory for all hedge relationships directly affected by IBOR reform. The Company has adopted these amendments along with the hedging relief for pre-replacement hedges.Phase (2) - The second phase relates to the replacement of benchmark rates with alternative risk-free rates. Currently, there is uncertainty as to the timing and the methods of transition for phase 2. As a result of these uncertainties, IBOR continues to be used as a reference rate in financial markets and is used in the valuation of instruments with maturities that exceed the expected end date for IBOR. Therefore, the Company believes the current market structure supports the continuation of hedge accounting as at 30 September 2020.Amendments to IAS 1 and IAS 8: Definition of MaterialThe amendments provide a new definition of material that states “information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.” The amendments clarify that materiality will depend on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements. A misstatement of information is material if it could reasonably be expected to influence decisions made by the primary users. These amendments had no impact on the interim condensed financial statements of, nor is there expected to be any future impact to the Company.Amendments to IFRS 3: Definition of a businessThe amendment to IFRS 3 clarifies that to be considered a business, an integrated set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. Furthermore, it clarified that a business can exist without including all of the inputs and processes needed to create outputs. These amendments had no impact on the interim condensed financial statements of the Company but may impact future periods should the Company enter into any business combinations.Conceptual Framework for Financial Reporting issued on March 29, 2018The Conceptual Framework is not a standard, and none of the concepts contained therein override the concepts or requirements in any standard. The purpose of the Conceptual Framework is to assist the IASB in developing standards, to help preparers develop consistent accounting policies where there is no applicable standard in place and to assist all parties to understand and interpret the standards. The revised Conceptual Framework includes some new concepts, provides updated definitions and recognition criteria for assets and liabilities and clarifies some important concepts. These amendments had no impact on the interim condensed financial statements of the Company.Standards issued but not yet effectiveStandards issued but not yet effective up to the date of issuance of the Company’s interim condensed financial statements are listed below. The listing is of standards and interpretations issued, which the Company reasonably expects to be applicable at a future date. The Company intends to adopt these standards when they become effective.Standard/InterpretationDescriptionEffective from periods beginning on or after the following dateIFRS 9Financial Instruments (note below)See note belowIFRS 17Insurance Contracts 1 January 2023IFRS 9 – Financial instrumentsThis standard was published on July 24, 2014 and has replaced IAS 39. The new standard addresses the following items related to financial instruments:a) Classification and measurementIFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss. A financial asset is measured at amortized cost if both:i. the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; andii. the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding (“SPPI”).The financial asset is measured at fair value through other comprehensive income and realized gains or losses would be recycled through profit or loss upon sale, if both conditions are met:i. the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows and for sale; andii. the contractual terms of cash flows are SPPI.Assets not meeting either of these categories are measured at fair value through profit or loss. Additionally, at initial recognition, an entity can use the option to designate a financial asset at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch.For equity instruments that are not held for trading, an entity can also make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of the instruments (including realized gains and losses on disposal), dividends being recognized in statement of income.Additionally, for financial liabilities that are designated as at fair value through profit or loss, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognized in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in statement of income.b) ImpairmentThe impairment model under IFRS 9 reflects expected credit losses, as opposed to incurred credit losses under IAS 39. Under the IFRS 9 approach, it is no longer necessary for a credit event to have occurred before credit losses are recognized. Instead, an entity always accounts for expected credit losses and changes in those expected credit losses. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition.c) Hedge accountingIFRS 9 introduces new requirements for hedge accounting that align hedge accounting more closely with Risk Management. The requirements establish a more principles-based approach to the general hedge accounting model. The amendments apply to all hedge accounting with the exception of portfolio fair value hedges of interest rate risk (commonly referred to as “fair value macro hedges”). For these, an entity may continue to apply the hedge accounting requirements currently in IAS 39. This exception was granted largely because the IASB is addressing macro hedge accounting as a separate project.Effective dateThe published effective date of IFRS 9 was January 1, 2018. However, amendments to IFRS 4 – Insurance Contracts: Applying IFRS 9 – Financial Instruments with IFRS 4 – Insurance Contracts, published on September 12, 2016, changes the existing IFRS 4 to allow entities issuing insurance contracts within the scope of IFRS 4 to mitigate certain effects of applying IFRS 9 before the IASB’s new insurance contract standard (IFRS 17 – Insurance Contracts) becomes effective. The amendments introduce two alternative options:1.Apply a temporary exemption from implementing IFRS 9 until the earlier of:a)the effective date of a new insurance contract standard; orb)annual reporting periods beginning on or after January 1, 2021. The IASB is proposing to extend the effective date of IFRS 17 and the IFRS 9 temporary exemption in IFRS 4 to January 1, 2023. Additional disclosures related to financial assets are required during the deferral period. This option is only available to entities whose activities are predominately connected with insurance and have not applied IFRS 9 previously; orAdopt IFRS 9 but, for designated financial assets, remove from profit or loss the effects of some of the accounting mismatches that may occur before the new insurance contract standard is implemented. During the interim period, additional disclosures are required. The Company has performed an initial assessment beginning January 1, 2018: (1) The carrying amount of the Company’s liabilities arising from contracts within the scope of IFRS 4 (including deposit components or embedded derivatives unbundled from insurance contracts) were compared to the total carrying amount of all its liabilities; and (2) the total carrying amount of the Company’s liabilities connected with insurance were compared to the total carrying amount of all its liabilities. Based on these assessments the Company determined that it is eligible for the temporary exemption. Consequently, the Company has decided to defer the implementation of IFRS 9 until the effective date of the new insurance contracts standard. Disclosures related to financial assets required during the deferral period are included in the Company’s annual financial statements.Impact assessmentOverall, the Company expects some impact of applying the impairment requirements of IFRS 9 on the financial statements of the Company. However, the impact of the same is not expected to be significant. At present it is not possible to provide reasonable estimate of the effects of application of this new standard as the Company is yet to perform a detailed review. IFRS 17 – Insurance ContractsOverviewThis standard has been published on May 18, 2017, it establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts and supersedes IFRS 4 – Insurance contracts.The new standard applies to insurance contracts issued, to all reinsurance contracts and to investment contracts with discretionary participating features provided the entity also issues insurance contracts. It requires to separate the following components from insurance contracts:i.embedded derivatives, if they meet certain specified criteria;ii.distinct investment components; andiii.any promise to transfer distinct goods or non-insurance services.These components should be accounted for separately in accordance with the related standards (IFRS 9 and IFRS 15). MeasurementIn contrast to the requirements in IFRS 4, which permitted insurers to continue to use the accounting policies for measurement purposes that existed prior to January 2015, IFRS 17 provides the following different measurement models:1)The General Measurement Model (GMM) is based on the following “building blocks”:a)the fulfilment cash flows (FCF), which comprises:probability-weighted estimates of future cash flows;an adjustment to reflect the time value of money (i.e. discounting) and the financial risks associated with those future cash flows; and a risk adjustment for non-financial risk. b) the Contractual Service Margin (CSM). The CSM represents the unearned profit for a group of insurance contracts and will be recognized as the entity provides services in the future. The CSM cannot be negative at inception; any net negative amount of the fulfilment cash flows at inception will be recorded in profit or loss immediately.At the end of each subsequent reporting period the carrying amount of a group of insurance contracts is remeasured to be the sum of:the liability for remaining coverage, which comprises the FCF related to future services and the CSM of the group at that date; andthe liability for incurred claims, which is measured as the FCF related to past services allocated to the group at that date.The CSM is adjusted subsequently for changes in cash flows related to future services but the CSM cannot be negative, so changes in future cash flows that are greater than the remaining CSM are recognized in profit or loss. Interest is also accreted on the CSM at rates locked in at initial recognition of a contract (i.e. discount rate used at inception to determine the present value of the estimated cash flows). Moreover, the CSM will be released into profit or loss based on coverage units, reflecting the quantity of the benefits provided and the expected coverage duration of the remaining contracts in the group.2)The Variable Fee Approach (VFA):VFA is a mandatory model for measuring contracts with direct participation features (also referred to as ‘direct participating contracts’). This assessment of whether the contract meets these criteria is made at inception of the contract and not reassessed subsequently. For these contracts, the CSM is also adjusted in addition to adjustment under general model:i.changes in the entity’s share of the fair value of underlying items;ii.changes in the effect of the time value of money and financial risks not relating to the underlying items.In addition, a simplified Premium Allocation Approach (PAA) is permitted for the measurement of the liability for the remaining coverage if it provides a measurement that is not materially different from the general model or if the coverage period for each contract in the group is one year or less. With the PAA, the liability for remaining coverage corresponds to premiums received at initial recognition less insurance acquisition cash flows. The general model remains applicable for the measurement of incurred claims. However, the entity is not required to adjust future cash flows for the time value of money and the effect of financial risk if those cash flows are expected to be paid/received in one year or less from the date the claims are incurred.Effective dateThe IASB issued an Exposure Draft Amendments to IFRS 17 during June 2019 and received comments from various stakeholders. The IASB is currently re-deliberating issues raised by stakeholders. For any proposed amendments to IFRS 17, the IASB will follow its normal due process for standard-setting. The effective date of IFRS 17 and the deferral of the IFRS 9 temporary exemption in IFRS 4, is currently January 1, 2021. Under the current exposure draft, it is proposed to amend the IFRS 17 effective date to reporting periods beginning on or after January 1, 2023. This is a deferral of 2 years compared to the previous date of January 1, 2021. Earlier application is permitted if both IFRS 15 – Revenue from Contracts with Customers and IFRS 9 – Financial Instruments have also been applied. The Company intend to apply the standard on its effective date. TransitionRetrospective application is required. However, if full retrospective application for a group of insurance contracts is impracticable, then the entity is required to choose either a modified retrospective approach or a fair value approach.Presentation and DisclosuresThe Company expects that the new standard will result in a change in accounting policies for insurance contracts together with amendments to presentation and disclosures. Impact assessmentThe Company is currently assessing the impact of the application and implementation of IFRS 17. As of the date of the publication of these interim condensed financial statements, the financial impact of adopting the standard is yet to be fully assessed by the Company. The Company has undertaken a Gap Analysis and the key Gaps are as follows: Impact areaSummary of impactFinancial impactNot yet fully assessed by the Company.Data impactThe Company believes that the data impact is not likely to be significant as a major proportion of the Company’s business would qualify for measurement under the premium allocation approach.IT systemsWith respect to IT systems, the Company has short listed a vendor to provide the necessary technical support to ensure an effective implementation of IFRS 17. The current accounting chart of accounts is under review for amendments to comply with IFRS 17 requirements. In addition, new disclosures will need to be developed.Process impactThe process impact is under evaluation, but no significant process changes are anticipated. However, should the Company shift its focus to majority long term business, the process impact would be significant.Impact on reinsurance arrangementsThe Company’s reinsurance arrangements under the proportional treaties currently are under testing to determine the suitable measurement approach.Impact on policies & control’s frameworksThe Company has hired an external consultant to modify their current policies control framework, to be more compliant towards the requirements of IFRS 17.Human resources The Company intends to recruit suitably qualified personnel who have a comprehensive understanding of the IFRS 17. The Company also intends to provide adequate training to existing staff.The Company has started with their implementation process and have set up a proper team, supervised by a steering committee. | 3 |
| Disclosure of issued IFRS not yet adopted [text block] | The accounting policies used in the preparation of these interim condensed financial statements are consistent with those used in the preparation of the annual financial statements for the year ended December 31, 2019 except as explained below:New IFRS, International Financial Reporting and Interpretations Committee’s interpretations (IFRIC) and amendments thereof, adopted by the CompanyThe following new standards, interpretations, amendments and revisions to existing standards, which were issued by the International Accounting Standards Board (IASB) have been effective from January 1, 2020, as applicable:Amendments to IFRS 7, IFRS 9 and IAS 39: Interest Rate Benchmark ReformA fundamental review and reform of major interest rate benchmarks is being undertaken globally. The InternationalAccounting Standards Board (“IASB”) is engaged in a two-phase process of amending its guidance to assist in a smoother transition away from IBOR.Phase (1) - The first phase of amendments to IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures focused on hedge accounting issues. The final amendments, issued in September 2019, amended specific hedge accounting requirements to provide relief from the potential effects of the uncertainty caused by IBOR reform. The amendments are effective from 1 January 2020 and are mandatory for all hedge relationships directly affected by IBOR reform. The Company has adopted these amendments along with the hedging relief for pre-replacement hedges.Phase (2) - The second phase relates to the replacement of benchmark rates with alternative risk-free rates. Currently, there is uncertainty as to the timing and the methods of transition for phase 2. As a result of these uncertainties, IBOR continues to be used as a reference rate in financial markets and is used in the valuation of instruments with maturities that exceed the expected end date for IBOR. Therefore, the Company believes the current market structure supports the continuation of hedge accounting as at 30 September 2020.Amendments to IAS 1 and IAS 8: Definition of MaterialThe amendments provide a new definition of material that states “information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.” The amendments clarify that materiality will depend on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements. A misstatement of information is material if it could reasonably be expected to influence decisions made by the primary users. These amendments had no impact on the interim condensed financial statements of, nor is there expected to be any future impact to the Company.Amendments to IFRS 3: Definition of a businessThe amendment to IFRS 3 clarifies that to be considered a business, an integrated set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. Furthermore, it clarified that a business can exist without including all of the inputs and processes needed to create outputs. These amendments had no impact on the interim condensed financial statements of the Company but may impact future periods should the Company enter into any business combinations.Conceptual Framework for Financial Reporting issued on March 29, 2018The Conceptual Framework is not a standard, and none of the concepts contained therein override the concepts or requirements in any standard. The purpose of the Conceptual Framework is to assist the IASB in developing standards, to help preparers develop consistent accounting policies where there is no applicable standard in place and to assist all parties to understand and interpret the standards. The revised Conceptual Framework includes some new concepts, provides updated definitions and recognition criteria for assets and liabilities and clarifies some important concepts. These amendments had no impact on the interim condensed financial statements of the Company.Standards issued but not yet effectiveStandards issued but not yet effective up to the date of issuance of the Company’s interim condensed financial statements are listed below. The listing is of standards and interpretations issued, which the Company reasonably expects to be applicable at a future date. The Company intends to adopt these standards when they become effective.Standard/InterpretationDescriptionEffective from periods beginning on or after the following dateIFRS 9Financial Instruments (note below)See note belowIFRS 17Insurance Contracts 1 January 2023IFRS 9 – Financial instrumentsThis standard was published on July 24, 2014 and has replaced IAS 39. The new standard addresses the following items related to financial instruments:a) Classification and measurementIFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss. A financial asset is measured at amortized cost if both:i. the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; andii. the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding (“SPPI”).The financial asset is measured at fair value through other comprehensive income and realized gains or losses would be recycled through profit or loss upon sale, if both conditions are met:i. the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows and for sale; andii. the contractual terms of cash flows are SPPI.Assets not meeting either of these categories are measured at fair value through profit or loss. Additionally, at initial recognition, an entity can use the option to designate a financial asset at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch.For equity instruments that are not held for trading, an entity can also make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of the instruments (including realized gains and losses on disposal), dividends being recognized in statement of income.Additionally, for financial liabilities that are designated as at fair value through profit or loss, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognized in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in statement of income.b) ImpairmentThe impairment model under IFRS 9 reflects expected credit losses, as opposed to incurred credit losses under IAS 39. Under the IFRS 9 approach, it is no longer necessary for a credit event to have occurred before credit losses are recognized. Instead, an entity always accounts for expected credit losses and changes in those expected credit losses. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition.c) Hedge accountingIFRS 9 introduces new requirements for hedge accounting that align hedge accounting more closely with Risk Management. The requirements establish a more principles-based approach to the general hedge accounting model. The amendments apply to all hedge accounting with the exception of portfolio fair value hedges of interest rate risk (commonly referred to as “fair value macro hedges”). For these, an entity may continue to apply the hedge accounting requirements currently in IAS 39. This exception was granted largely because the IASB is addressing macro hedge accounting as a separate project.Effective dateThe published effective date of IFRS 9 was January 1, 2018. However, amendments to IFRS 4 – Insurance Contracts: Applying IFRS 9 – Financial Instruments with IFRS 4 – Insurance Contracts, published on September 12, 2016, changes the existing IFRS 4 to allow entities issuing insurance contracts within the scope of IFRS 4 to mitigate certain effects of applying IFRS 9 before the IASB’s new insurance contract standard (IFRS 17 – Insurance Contracts) becomes effective. The amendments introduce two alternative options:1.Apply a temporary exemption from implementing IFRS 9 until the earlier of:a)the effective date of a new insurance contract standard; orb)annual reporting periods beginning on or after January 1, 2021. The IASB is proposing to extend the effective date of IFRS 17 and the IFRS 9 temporary exemption in IFRS 4 to January 1, 2023. Additional disclosures related to financial assets are required during the deferral period. This option is only available to entities whose activities are predominately connected with insurance and have not applied IFRS 9 previously; orAdopt IFRS 9 but, for designated financial assets, remove from profit or loss the effects of some of the accounting mismatches that may occur before the new insurance contract standard is implemented. During the interim period, additional disclosures are required. The Company has performed an initial assessment beginning January 1, 2018: (1) The carrying amount of the Company’s liabilities arising from contracts within the scope of IFRS 4 (including deposit components or embedded derivatives unbundled from insurance contracts) were compared to the total carrying amount of all its liabilities; and (2) the total carrying amount of the Company’s liabilities connected with insurance were compared to the total carrying amount of all its liabilities. Based on these assessments the Company determined that it is eligible for the temporary exemption. Consequently, the Company has decided to defer the implementation of IFRS 9 until the effective date of the new insurance contracts standard. Disclosures related to financial assets required during the deferral period are included in the Company’s annual financial statements.Impact assessmentOverall, the Company expects some impact of applying the impairment requirements of IFRS 9 on the financial statements of the Company. However, the impact of the same is not expected to be significant. At present it is not possible to provide reasonable estimate of the effects of application of this new standard as the Company is yet to perform a detailed review. IFRS 17 – Insurance ContractsOverviewThis standard has been published on May 18, 2017, it establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts and supersedes IFRS 4 – Insurance contracts.The new standard applies to insurance contracts issued, to all reinsurance contracts and to investment contracts with discretionary participating features provided the entity also issues insurance contracts. It requires to separate the following components from insurance contracts:i.embedded derivatives, if they meet certain specified criteria;ii.distinct investment components; andiii.any promise to transfer distinct goods or non-insurance services.These components should be accounted for separately in accordance with the related standards (IFRS 9 and IFRS 15). MeasurementIn contrast to the requirements in IFRS 4, which permitted insurers to continue to use the accounting policies for measurement purposes that existed prior to January 2015, IFRS 17 provides the following different measurement models:1)The General Measurement Model (GMM) is based on the following “building blocks”:a)the fulfilment cash flows (FCF), which comprises:probability-weighted estimates of future cash flows;an adjustment to reflect the time value of money (i.e. discounting) and the financial risks associated with those future cash flows; and a risk adjustment for non-financial risk. b) the Contractual Service Margin (CSM). The CSM represents the unearned profit for a group of insurance contracts and will be recognized as the entity provides services in the future. The CSM cannot be negative at inception; any net negative amount of the fulfilment cash flows at inception will be recorded in profit or loss immediately.At the end of each subsequent reporting period the carrying amount of a group of insurance contracts is remeasured to be the sum of:the liability for remaining coverage, which comprises the FCF related to future services and the CSM of the group at that date; andthe liability for incurred claims, which is measured as the FCF related to past services allocated to the group at that date.The CSM is adjusted subsequently for changes in cash flows related to future services but the CSM cannot be negative, so changes in future cash flows that are greater than the remaining CSM are recognized in profit or loss. Interest is also accreted on the CSM at rates locked in at initial recognition of a contract (i.e. discount rate used at inception to determine the present value of the estimated cash flows). Moreover, the CSM will be released into profit or loss based on coverage units, reflecting the quantity of the benefits provided and the expected coverage duration of the remaining contracts in the group.2)The Variable Fee Approach (VFA):VFA is a mandatory model for measuring contracts with direct participation features (also referred to as ‘direct participating contracts’). This assessment of whether the contract meets these criteria is made at inception of the contract and not reassessed subsequently. For these contracts, the CSM is also adjusted in addition to adjustment under general model:i.changes in the entity’s share of the fair value of underlying items;ii.changes in the effect of the time value of money and financial risks not relating to the underlying items.In addition, a simplified Premium Allocation Approach (PAA) is permitted for the measurement of the liability for the remaining coverage if it provides a measurement that is not materially different from the general model or if the coverage period for each contract in the group is one year or less. With the PAA, the liability for remaining coverage corresponds to premiums received at initial recognition less insurance acquisition cash flows. The general model remains applicable for the measurement of incurred claims. However, the entity is not required to adjust future cash flows for the time value of money and the effect of financial risk if those cash flows are expected to be paid/received in one year or less from the date the claims are incurred.Effective dateThe IASB issued an Exposure Draft Amendments to IFRS 17 during June 2019 and received comments from various stakeholders. The IASB is currently re-deliberating issues raised by stakeholders. For any proposed amendments to IFRS 17, the IASB will follow its normal due process for standard-setting. The effective date of IFRS 17 and the deferral of the IFRS 9 temporary exemption in IFRS 4, is currently January 1, 2021. Under the current exposure draft, it is proposed to amend the IFRS 17 effective date to reporting periods beginning on or after January 1, 2023. This is a deferral of 2 years compared to the previous date of January 1, 2021. Earlier application is permitted if both IFRS 15 – Revenue from Contracts with Customers and IFRS 9 – Financial Instruments have also been applied. The Company intend to apply the standard on its effective date. TransitionRetrospective application is required. However, if full retrospective application for a group of insurance contracts is impracticable, then the entity is required to choose either a modified retrospective approach or a fair value approach.Presentation and DisclosuresThe Company expects that the new standard will result in a change in accounting policies for insurance contracts together with amendments to presentation and disclosures. Impact assessmentThe Company is currently assessing the impact of the application and implementation of IFRS 17. As of the date of the publication of these interim condensed financial statements, the financial impact of adopting the standard is yet to be fully assessed by the Company. The Company has undertaken a Gap Analysis and the key Gaps are as follows: Impact areaSummary of impactFinancial impactNot yet fully assessed by the Company.Data impactThe Company believes that the data impact is not likely to be significant as a major proportion of the Company’s business would qualify for measurement under the premium allocation approach.IT systemsWith respect to IT systems, the Company has short listed a vendor to provide the necessary technical support to ensure an effective implementation of IFRS 17. The current accounting chart of accounts is under review for amendments to comply with IFRS 17 requirements. In addition, new disclosures will need to be developed.Process impactThe process impact is under evaluation, but no significant process changes are anticipated. However, should the Company shift its focus to majority long term business, the process impact would be significant.Impact on reinsurance arrangementsThe Company’s reinsurance arrangements under the proportional treaties currently are under testing to determine the suitable measurement approach.Impact on policies & control’s frameworksThe Company has hired an external consultant to modify their current policies control framework, to be more compliant towards the requirements of IFRS 17.Human resources The Company intends to recruit suitably qualified personnel who have a comprehensive understanding of the IFRS 17. The Company also intends to provide adequate training to existing staff.The Company has started with their implementation process and have set up a proper team, supervised by a steering committee. | 3 |
| Disclosure of summary of significant accounting policies [abstract] | | |
| Disclosure of summary of significant accounting policies, general comment [text block] | The accounting policies used in the preparation of these interim condensed financial statements are consistent with those used in the preparation of the annual financial statements for the year ended December 31, 2019 except as explained below:New IFRS, International Financial Reporting and Interpretations Committee’s interpretations (IFRIC) and amendments thereof, adopted by the CompanyThe following new standards, interpretations, amendments and revisions to existing standards, which were issued by the International Accounting Standards Board (IASB) have been effective from January 1, 2020, as applicable:Amendments to IFRS 7, IFRS 9 and IAS 39: Interest Rate Benchmark ReformA fundamental review and reform of major interest rate benchmarks is being undertaken globally. The InternationalAccounting Standards Board (“IASB”) is engaged in a two-phase process of amending its guidance to assist in a smoother transition away from IBOR.Phase (1) - The first phase of amendments to IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures focused on hedge accounting issues. The final amendments, issued in September 2019, amended specific hedge accounting requirements to provide relief from the potential effects of the uncertainty caused by IBOR reform. The amendments are effective from 1 January 2020 and are mandatory for all hedge relationships directly affected by IBOR reform. The Company has adopted these amendments along with the hedging relief for pre-replacement hedges.Phase (2) - The second phase relates to the replacement of benchmark rates with alternative risk-free rates. Currently, there is uncertainty as to the timing and the methods of transition for phase 2. As a result of these uncertainties, IBOR continues to be used as a reference rate in financial markets and is used in the valuation of instruments with maturities that exceed the expected end date for IBOR. Therefore, the Company believes the current market structure supports the continuation of hedge accounting as at 30 September 2020.Amendments to IAS 1 and IAS 8: Definition of MaterialThe amendments provide a new definition of material that states “information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.” The amendments clarify that materiality will depend on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements. A misstatement of information is material if it could reasonably be expected to influence decisions made by the primary users. These amendments had no impact on the interim condensed financial statements of, nor is there expected to be any future impact to the Company.Amendments to IFRS 3: Definition of a businessThe amendment to IFRS 3 clarifies that to be considered a business, an integrated set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. Furthermore, it clarified that a business can exist without including all of the inputs and processes needed to create outputs. These amendments had no impact on the interim condensed financial statements of the Company but may impact future periods should the Company enter into any business combinations.Conceptual Framework for Financial Reporting issued on March 29, 2018The Conceptual Framework is not a standard, and none of the concepts contained therein override the concepts or requirements in any standard. The purpose of the Conceptual Framework is to assist the IASB in developing standards, to help preparers develop consistent accounting policies where there is no applicable standard in place and to assist all parties to understand and interpret the standards. The revised Conceptual Framework includes some new concepts, provides updated definitions and recognition criteria for assets and liabilities and clarifies some important concepts. These amendments had no impact on the interim condensed financial statements of the Company.Standards issued but not yet effectiveStandards issued but not yet effective up to the date of issuance of the Company’s interim condensed financial statements are listed below. The listing is of standards and interpretations issued, which the Company reasonably expects to be applicable at a future date. The Company intends to adopt these standards when they become effective.Standard/InterpretationDescriptionEffective from periods beginning on or after the following dateIFRS 9Financial Instruments (note below)See note belowIFRS 17Insurance Contracts 1 January 2023IFRS 9 – Financial instrumentsThis standard was published on July 24, 2014 and has replaced IAS 39. The new standard addresses the following items related to financial instruments:a) Classification and measurementIFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss. A financial asset is measured at amortized cost if both:i. the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; andii. the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding (“SPPI”).The financial asset is measured at fair value through other comprehensive income and realized gains or losses would be recycled through profit or loss upon sale, if both conditions are met:i. the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows and for sale; andii. the contractual terms of cash flows are SPPI.Assets not meeting either of these categories are measured at fair value through profit or loss. Additionally, at initial recognition, an entity can use the option to designate a financial asset at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch.For equity instruments that are not held for trading, an entity can also make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of the instruments (including realized gains and losses on disposal), dividends being recognized in statement of income.Additionally, for financial liabilities that are designated as at fair value through profit or loss, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognized in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in statement of income.b) ImpairmentThe impairment model under IFRS 9 reflects expected credit losses, as opposed to incurred credit losses under IAS 39. Under the IFRS 9 approach, it is no longer necessary for a credit event to have occurred before credit losses are recognized. Instead, an entity always accounts for expected credit losses and changes in those expected credit losses. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition.c) Hedge accountingIFRS 9 introduces new requirements for hedge accounting that align hedge accounting more closely with Risk Management. The requirements establish a more principles-based approach to the general hedge accounting model. The amendments apply to all hedge accounting with the exception of portfolio fair value hedges of interest rate risk (commonly referred to as “fair value macro hedges”). For these, an entity may continue to apply the hedge accounting requirements currently in IAS 39. This exception was granted largely because the IASB is addressing macro hedge accounting as a separate project.Effective dateThe published effective date of IFRS 9 was January 1, 2018. However, amendments to IFRS 4 – Insurance Contracts: Applying IFRS 9 – Financial Instruments with IFRS 4 – Insurance Contracts, published on September 12, 2016, changes the existing IFRS 4 to allow entities issuing insurance contracts within the scope of IFRS 4 to mitigate certain effects of applying IFRS 9 before the IASB’s new insurance contract standard (IFRS 17 – Insurance Contracts) becomes effective. The amendments introduce two alternative options:1.Apply a temporary exemption from implementing IFRS 9 until the earlier of:a)the effective date of a new insurance contract standard; orb)annual reporting periods beginning on or after January 1, 2021. The IASB is proposing to extend the effective date of IFRS 17 and the IFRS 9 temporary exemption in IFRS 4 to January 1, 2023. Additional disclosures related to financial assets are required during the deferral period. This option is only available to entities whose activities are predominately connected with insurance and have not applied IFRS 9 previously; orAdopt IFRS 9 but, for designated financial assets, remove from profit or loss the effects of some of the accounting mismatches that may occur before the new insurance contract standard is implemented. During the interim period, additional disclosures are required. The Company has performed an initial assessment beginning January 1, 2018: (1) The carrying amount of the Company’s liabilities arising from contracts within the scope of IFRS 4 (including deposit components or embedded derivatives unbundled from insurance contracts) were compared to the total carrying amount of all its liabilities; and (2) the total carrying amount of the Company’s liabilities connected with insurance were compared to the total carrying amount of all its liabilities. Based on these assessments the Company determined that it is eligible for the temporary exemption. Consequently, the Company has decided to defer the implementation of IFRS 9 until the effective date of the new insurance contracts standard. Disclosures related to financial assets required during the deferral period are included in the Company’s annual financial statements.Impact assessmentOverall, the Company expects some impact of applying the impairment requirements of IFRS 9 on the financial statements of the Company. However, the impact of the same is not expected to be significant. At present it is not possible to provide reasonable estimate of the effects of application of this new standard as the Company is yet to perform a detailed review. IFRS 17 – Insurance ContractsOverviewThis standard has been published on May 18, 2017, it establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts and supersedes IFRS 4 – Insurance contracts.The new standard applies to insurance contracts issued, to all reinsurance contracts and to investment contracts with discretionary participating features provided the entity also issues insurance contracts. It requires to separate the following components from insurance contracts:i.embedded derivatives, if they meet certain specified criteria;ii.distinct investment components; andiii.any promise to transfer distinct goods or non-insurance services.These components should be accounted for separately in accordance with the related standards (IFRS 9 and IFRS 15). MeasurementIn contrast to the requirements in IFRS 4, which permitted insurers to continue to use the accounting policies for measurement purposes that existed prior to January 2015, IFRS 17 provides the following different measurement models:1)The General Measurement Model (GMM) is based on the following “building blocks”:a)the fulfilment cash flows (FCF), which comprises:probability-weighted estimates of future cash flows;an adjustment to reflect the time value of money (i.e. discounting) and the financial risks associated with those future cash flows; and a risk adjustment for non-financial risk. b) the Contractual Service Margin (CSM). The CSM represents the unearned profit for a group of insurance contracts and will be recognized as the entity provides services in the future. The CSM cannot be negative at inception; any net negative amount of the fulfilment cash flows at inception will be recorded in profit or loss immediately.At the end of each subsequent reporting period the carrying amount of a group of insurance contracts is remeasured to be the sum of:the liability for remaining coverage, which comprises the FCF related to future services and the CSM of the group at that date; andthe liability for incurred claims, which is measured as the FCF related to past services allocated to the group at that date.The CSM is adjusted subsequently for changes in cash flows related to future services but the CSM cannot be negative, so changes in future cash flows that are greater than the remaining CSM are recognized in profit or loss. Interest is also accreted on the CSM at rates locked in at initial recognition of a contract (i.e. discount rate used at inception to determine the present value of the estimated cash flows). Moreover, the CSM will be released into profit or loss based on coverage units, reflecting the quantity of the benefits provided and the expected coverage duration of the remaining contracts in the group.2)The Variable Fee Approach (VFA):VFA is a mandatory model for measuring contracts with direct participation features (also referred to as ‘direct participating contracts’). This assessment of whether the contract meets these criteria is made at inception of the contract and not reassessed subsequently. For these contracts, the CSM is also adjusted in addition to adjustment under general model:i.changes in the entity’s share of the fair value of underlying items;ii.changes in the effect of the time value of money and financial risks not relating to the underlying items.In addition, a simplified Premium Allocation Approach (PAA) is permitted for the measurement of the liability for the remaining coverage if it provides a measurement that is not materially different from the general model or if the coverage period for each contract in the group is one year or less. With the PAA, the liability for remaining coverage corresponds to premiums received at initial recognition less insurance acquisition cash flows. The general model remains applicable for the measurement of incurred claims. However, the entity is not required to adjust future cash flows for the time value of money and the effect of financial risk if those cash flows are expected to be paid/received in one year or less from the date the claims are incurred.Effective dateThe IASB issued an Exposure Draft Amendments to IFRS 17 during June 2019 and received comments from various stakeholders. The IASB is currently re-deliberating issues raised by stakeholders. For any proposed amendments to IFRS 17, the IASB will follow its normal due process for standard-setting. The effective date of IFRS 17 and the deferral of the IFRS 9 temporary exemption in IFRS 4, is currently January 1, 2021. Under the current exposure draft, it is proposed to amend the IFRS 17 effective date to reporting periods beginning on or after January 1, 2023. This is a deferral of 2 years compared to the previous date of January 1, 2021. Earlier application is permitted if both IFRS 15 – Revenue from Contracts with Customers and IFRS 9 – Financial Instruments have also been applied. The Company intend to apply the standard on its effective date. TransitionRetrospective application is required. However, if full retrospective application for a group of insurance contracts is impracticable, then the entity is required to choose either a modified retrospective approach or a fair value approach.Presentation and DisclosuresThe Company expects that the new standard will result in a change in accounting policies for insurance contracts together with amendments to presentation and disclosures. Impact assessmentThe Company is currently assessing the impact of the application and implementation of IFRS 17. As of the date of the publication of these interim condensed financial statements, the financial impact of adopting the standard is yet to be fully assessed by the Company. The Company has undertaken a Gap Analysis and the key Gaps are as follows: Impact areaSummary of impactFinancial impactNot yet fully assessed by the Company.Data impactThe Company believes that the data impact is not likely to be significant as a major proportion of the Company’s business would qualify for measurement under the premium allocation approach.IT systemsWith respect to IT systems, the Company has short listed a vendor to provide the necessary technical support to ensure an effective implementation of IFRS 17. The current accounting chart of accounts is under review for amendments to comply with IFRS 17 requirements. In addition, new disclosures will need to be developed.Process impactThe process impact is under evaluation, but no significant process changes are anticipated. However, should the Company shift its focus to majority long term business, the process impact would be significant.Impact on reinsurance arrangementsThe Company’s reinsurance arrangements under the proportional treaties currently are under testing to determine the suitable measurement approach.Impact on policies & control’s frameworksThe Company has hired an external consultant to modify their current policies control framework, to be more compliant towards the requirements of IFRS 17.Human resources The Company intends to recruit suitably qualified personnel who have a comprehensive understanding of the IFRS 17. The Company also intends to provide adequate training to existing staff.The Company has started with their implementation process and have set up a proper team, supervised by a steering committee. | 3 |
| Description of accounting policy for cash and cash equivalents [text block] | Cash and cash equivalentsSeptember 30, 2020(Unaudited)December 31, 2019(Audited)Cash in hand3228Bank balances63,45732,804Deposits maturing within 3 months from the acquisition date259,160321,875322,649354,707Except for SR 98 K (December 31, 2019: Nil) the remaining bank balances and deposits are held with a bank which is a related party, incorporated in Saudi Arabia and are denominated in Saudi Riyals and US Dollars. The bank has a sound credit rating. The deposits have an original maturity of less than three months and yield income at rates up to 1% per annum (December 31, 2019: up to 2% per annum). | 4 |
| Description of accounting policy for zakat [text block] | 11 Zakat and income tax11.1 Components of zakat baseSignificant components of zakat base of the Company attributable to the Saudi shareholders, which are subject to adjustment under zakat and income tax regulations, are shareholders’ equity at the beginning of the period, adjusted net income and certain other items. Zakat base has been computed based on the Company’s understanding of the zakat regulations enforced in the Kingdom of Saudi Arabia. The zakat regulations in Saudi Arabia are subject to different interpretations, and the assessments to be raised by the General Authority of Zakat and Tax (“GAZT”) could be different from the declaration filed by the Company. 11.2 Provision for zakat and income taxSeptember 30, 2020(Unaudited)December 31, 2019 (Audited)Opening 5,853 7,305 Charge for zakat – current period/year3,787 4,161 Charge for zakat – prior period/year 769-Charge for income tax – current period/year1,173 1,184 Charge for income tax – prior period/year165-Payment of zakat (5,324) (4,784)Payment of income tax(1,311) (292)Reduction in income tax recoverable(38) (185)Tax paid in advance- (1,543)Other charges- 7 Closing 5,0745,853Zakat is payable at 2.578% of the approximate zakat base (excluding adjusted net income for the period) and 2.5% of adjusted net income for the period/year attributable to Saudi shareholders.Provision for income tax is payable at 20% of the adjusted net income attributable to the foreign shareholders of the Company, less allowances for foreign shareholders’ share in the losses carry forwarded from previous year calculated in accordance with the guidelines provided in the income tax regulations. Income tax paid is recovered from foreign shareholders.The shareholding percentage subject to zakat and income tax is as follows:September 30, 2020(Unaudited)December 31, 2019 (Audited)%%Zakat74.4474.44Income tax25.5625.56Status of assessments The Company has filed its tax returns with GAZT from inception up to 2019. The Company’s tax and Zakat position has been finalised up to and including the year ended December 31, 2018, except for the assessment for withholding tax as explained below. The tax return for 2013 is deemed to be finalized as no queries has been received from the GAZT and the statutory time limit of 5 years is over. The Company has received the final assessment for 2018 for zakat and income tax, the assessment has raised additional tax and Zakat liability for SR 175 thousand. Management has accepted this assessment and has paid this amount in the current reporting period. During the nine-month period ended September 30, 2020, the Company has received the final assessment for the years 2014 to 2017 for zakat and income tax. The assessment has raised additional tax and zakat liability of SR 934 thousand. Management has accepted this assessment and has paid this amount in the current reporting period.In addition to above, the Company had also received an assessment for the 2018 withholding tax liability during 2019 in which the GAZT had imposed additional taxes, including penalties, of SR 11.37 million. Management believes that the assessment raised is without merit and has appealed against this assessment. The Company’s initial appeal was rejected by the GAZT and has been escalated to the General Secretariat of Tax Committee (GSTC) online portal in order to assign the hearing session by the related Committee to discuss the Company's objection. However, management of the Company believes that there is a high probability to wave the majority of this assessment and hence no additional liability has been recorded against this assessment. | 11 |
| Description of accounting policy for fair value measurement [text block] | 17 Fair values of financial instruments 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 these interim condensed financial statements.Determination of fair value and fair value hierarchyThe Company uses the following hierarchy for determining and disclosing the fair value of financial instruments:Level 1: quoted prices in active markets for the same or identical instrument that an entity can access at the measurement date;Level 2: quoted prices in active markets for similar assets and liabilities or other valuation techniques for which all significant inputs are based on observable market data; andLevel 3: valuation techniques for which any significant input is not based on observable market data.As at September 30, 2020 and December 31, 2019, all financial instruments which are fair valued are Level 3 instruments except for investment in sukuks and equity amounting to SR 31.13 million (December 31, 2019 : SR 30.03 million) and SR 3.38 million (December 31, 2019: SR 3.02 million), respectively, which are Level 1 investments. The Company ascertains the Level 3 fair values based on a valuation technique which is primarily derived by net assets value of the respective investee at the period end. There are no transfers between Level 1, Level 2 and Level 3 during the period.Available-for-sale investment is carried at cost as its fair value cannot be measured reliably. | 17 |
| Description of accounting policy for investment income [text block] | 8 Investments NoteSeptember 30, 2020(Unaudited)December 31,2019(Audited)Fair value through income statement investments 8.1160,300 110,645Available-for-sale investment8.21,923 1,923162,223 112,5688.1 Fair value through income statement investments (FVIS)Movement in FVIS is as follows:Nine-month period ended September 30, 2020(Unaudited)Year ended December 31, 2019(Audited)Opening balance110,645105,004Additions during the period/year 50,000284Changes in fair value of investments(345)5,357Closing balance 160,300110,6458.2Available-for-sale investmentThis represents the Company’s 3.85% (December 31, 2019: 3.85%) holding in Najm for Insurance Services Company, a Saudi Closed Joint Stock Company. These shares are un-quoted and are carried at cost. In the absence of reliable financial information, management believe that fair values cannot be ascertained reliably. | 8 |
| Description of accounting policy for segment reporting [text block] | 18 Operating Segments 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 its 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 condensed 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 profit or loss since December 31, 2019. Segment assets do not include cash and cash equivalents, premiums receivables, investments, due from reinsurers, prepaid expenses and other assets, property and equipment, statutory deposit and accrued income on statutory deposit. Accordingly, they are included in unallocated assets. Segment liabilities do not include policy holders claims payable, accrued and other liabilities, due to reinsurers, agents, brokers and third-party administrators, surplus distribution payable, zakat and income tax, and accrued income on statutory deposit. 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 September 30, 2020 and December 31, 2019, its total revenues, expenses, and net income for the three-month and nine-month periods ended September 30, 2020 and September 30, 2019, are as follows:MarinePropertyMotorEngineeringAccident & liabilityExtended warrantyTerm lifeTotalFor the three-monthperiod ended September 30,2020 (unaudited)RevenuesGross premiums written10,14330,48772,81618,5259,7146,77810,922159,385Reinsurance premiums ceded (7,152)(28,219)147(17,053)(8,749)(6,778)(6,948) (74,752)Excess of loss expenses(898)(922)(1,917)(495)---(4,232)Net premiums written2,0931,34671,046977965-3,97480,401Change in unearnedpremiums, net(1,453)57520,279(467)1,268-1,74321,945Net premiums earned6401,92191,3255102,233-5,717102,346Reinsurance commissions 1,4395,0892912,6611,56474055012,334Other underwriting income194-25-333Total revenues2,0987,01491,6163,1733,8027406,270114,713Cost and expensesGross claims paid and loss adjustment expenses, net of recoveries2,4023,04769,2593,2239291,16819,52699,554Reinsurer’s share of claims paid(1,591)(2,965)(1,871)(3,103)(721)(1,168)(16,211)(27,630)Net claims paid8118267,388120208-3,31571,924Changes in outstanding claims, net(853)1711,198469(100) -1,0331,918Changes in claims incurred but not reported, net(131)(46)1,051(38)(121)-175890Net claims incurred(173)20769,637551(13)-4,52374,732Premium deficiency reserve--(1,204)----(1,204)Additional unexpired risk reserve---28---28Unallocated loss adjustment expense provision/(reversal)6(147)(217)14990-44(75)Policy acquisition costs4982,8016,0701,3709245352,03614,234Total underwriting cost and expenses3312,86174,2862,0981,0015356,60387,715Net underwriting income/ (loss)1,7674,15317,3301,0752,801205(333)26,998Other operating (expenses) / income Impairment allowance for doubtful premiums, reinsurers and other receivables(2,328)General and administration expenses(34,091)Commission income on deposits413Unrealized gain on investments184Other income4,167Total other operating expenses, net(31,655)Net loss for the period attributable to the shareholders, before zakat and income tax(4,657)Zakat(1,200)Income tax(55)Net loss for the period(5,912)MarinePropertyMotorEngineeringAccident & liabilityExtended warrantyTerm lifeTotal For the nine-monthperiod ended September 30,2020 (unaudited)RevenuesGross premiums written34,777110,735328,15554,16639,76919,15755,088 641,847Reinsurance premiums ceded (25,984) (100,911)(6,226)(50,755)(32,298)(19,157)(36,146)(271,477)Excess of loss expenses(3,768)(2,372)(7,041)(1,095)(180)-(14,456)Net premiums written5,0257,452314,8882,3167,291-18,942355,914Change in unearned premiums, net257(1,725)(41,407)(592)(575)-(4,824)(48,866)Net premiums earned5,2825,727273,4811,7246,716-14,118307,048Reinsurance commissions 8,00314,1531,0159,2224,8981,8364,19443,321Other underwriting income6016-922-7114Total revenues13,34519,896274,49610,95511,6361,83618,319350,483Cost and expensesGross claims paid and loss adjustment expenses, net of recoveries8,6547,011169,2425,1805,4723,70743,609 242,875Reinsurer’s share of claims paid(6,441)(6,645)(4,699)(4,793)(4,390)(3,707)(36,131)(66,806)Net claims paid2,213366164,5433871,082-7,478176,069Changes in outstanding claims, net(1,158)1,89010,290490(431)-1,278 12,359Changes in claims incurred but not reported, net(286)952,563(261)(107)-8132,817Net claims incurred7692,351177,396616544-9,569191,245Premium deficiency reserve--4,019----4,019Additional unexpired risk reserve---(234)---(234)Unallocated loss adjustment expense provision109(95)814478-(26)218Policy acquisition costs4,4617,94018,7274,9633,0311,3265,99146,439Total underwriting cost and expenses5,33910,196200,1505,4893,6531,32615,534241,687Net underwriting income 8,0069,70074,3465,4667,9835102,785108,796Other operating (expenses) / income Impairment allowance for doubtful premiums, reinsurers and other receivables(13,180)General and administration expenses(102,075)Commission income on deposits2,251Unrealized loss on investments(345)Other income7,051Total Other operating expenses, net(106,298)Net income for the period2,498Total (loss) attributed to policyholders(841)Net income for the period attributable to the shareholders, before zakat and income tax1,657Zakat(4,556)Income tax(1,300)Net loss for the period(4,199)MarinePropertyMotorEngineeringAccident & liabilityExtended warrantyTerm lifeTotal For the three-monthperiod ended September 30,2019 (unaudited) RevenuesGross premiums written21,68721,22853,031 12,3664,0274,30414,197130,840Reinsurance premiums ceded (18,198) (19,317)(1,331) (11,564) (2,714)(4,304)(11,958) (69,386)Excess of loss expenses(1,300)(600)(1,250)(250)(75)--(3,475)Net premiums written2,1891,31150,4505521,238-2,23957,979Change in unearned premiums, net(1,176)89640,32819820-1,00941,896Net premiums earned1,0132,20790,7785712,058-3,24899,875Reinsurance commissions 1,9514,4885132,5851,5272,9824,83118,877Other underwriting income203-34-232Total revenues2,9846,69891,2913,1593,5892,9828,081118,784Cost and expensesGross claims paid and loss adjustment expenses, net of recoveries 2,52816,59992,1333,2289191,41110,447127,265Reinsurer’s share of claims paid(1,786)(15,697)(4,332)(3,067)(630)(1,411)(9,005)(35,928)Net claims paid74290287,801161289-1,44291,337Changes in outstanding claims, net1,292(1,175)(4,639)(248)(96) -711(4,155)Changes in claims incurred but not reported, net(951)(72)(7,449)(251)598-(111)(8,236)Net claims incurred1,083(345)75,713(338)791-2,04278,946Premium deficiency reserve-(4,048)6,750(1,173)---1,529Policy acquisition costs1,0992,2695,8581,4058302,4612,45016,372Total underwriting cost and expenses2,182(2,124)88,321(106)1,6212,4614,49296,847Net underwriting income 8028,8222,9703,2651,9685213,58921,937Other operating (expenses) / income.Impairment allowance for doubtful premium, reinsurers and other receivables(4,229)General and administration expenses(26,551)Commission income on deposits1,897Unrealized gain on investments1,181Other income39Total Other operating expenses, net(27,663)Net loss for the period attributable to the shareholders before zakat and income tax(5,726)Zakat(533)Income tax515Net loss for the period(5,744) MarinePropertyMotorEngineeringAccident & liabilityExtended warrantyTerm lifeTotal For the nine-month period ended September 30,2019 (unaudited) RevenuesGross premiums written45,18595,091327,942 38,60825,81714,58462,464609,691Reinsurance premiums ceded (35,366)(85,026)(8,233)(36,010)(18,026)(14,584)(53,791)(251,036)Excess of loss expenses(1,989)(2,660)(4,175)(750)(225)-(119)(9,918)Net premiums written7,8307,405315,5341,8487,566-8,554348,737Change in unearned premiums, net(978)(1,734)(37,236)(351)(1,618)-(1,136)(43,053)Net premiums earned6,8525,671278,2981,4975,948-7,418305,684Reinsurance commissions 6,96714,2912,4936,8504,2849,32814,31358,526Other underwriting income63681002324-7285Total revenues13,88220,030280,8918,37010,2569,32821,738364,495Cost and expensesGross claims paid and loss adjustment expenses, net of recoveries7,19021,159243,44712,3491,9044,06330,973321,085Reinsurer’s share of claims paid(5,438)(19,506)(14,513)(11,595)(1,424)(4,063)(25,746) (82,285)Net claims paid1,7521,653228,934754480-5,227238,800Changes in outstanding claims, net2,4885899,964(1,339)641-33412,677Changes in claims incurred but not reported, net(912)508,491(513)344-(548)6,912Net claims incurred3,3282,292247,389(1,098)1,465-5,013258,389Premium deficiency reserve(15)(1,721)(6,829)(820)---(9,385)Additional unexpired risk reserve---14---14Unallocated loss adjustment expense provision(142)922,660(111)(33)-(87)2,379Policy acquisition costs4,0247,01516,9673,6072,2677,7307,39449,004Total underwriting cost and expenses7,1957,678260,1871,5923,699773012,320300,401Net underwriting income 6,68712,35220,7046,7786,5571,5989,41864,094Other operating (expenses) / incomeImpairment allowance for doubtful premium, reinsurers and other receivables(21,531)General and administration expenses(78,468)Commission income on deposits5,250Unrealized gain on investments3,838Other income13,991Total other operating expenses, net(76,920)Net loss for the period attributable to the shareholders, before zakat and income tax(12,826)Zakat(3,147)Income tax(75)Net loss for the period(16,048) MarinePropertyMotorEngineeringAccident & liabilityExtended warrantyTerm life TotalAs at September 30, 2020(Unaudited)AssetsReinsurers’ share of unearned premiums7,74450,8393,09427,95120,32336,7629,872 156,585Reinsurers’ share of outstanding claims6,37219,0072,928384,658104,5214110,536 528,063Reinsurers’ share of claims incurred but not reported5,4633,4612,40022,9208,146-11,833 54,223Deferred policy acquisition costs1,1554,97110,4963,4632,0739,3331,848 33,339Unallocated assets830,555Total assets1,602,765LiabilitiesUnearned premiums10,69555,513187,52230,11923,69436,76216,089360,394Unearned reinsurance commission1,8869,0344746,1383,54312,89858534,558Outstanding claims8,60222,15581,027388,800105,8624112,757619,244Claims incurred but not reported5,8903,80143,88623,25110,401-14,899102,128Premium deficiency reserve--14,864----14,864Additional unexpired risk reserve---165---165Unallocated loss adjustment expense provision230413,667358533-4035,232Unallocated liabilities212,850Total liabilities 1,349,435MarinePropertyMotorEngineeringAccident & liabilityExtended warrantyTerm life TotalAs at December 31, 2019 (Audited)AssetsReinsurers’ share of unearned premiums14,29425,4763,67020,13111,46622,9057,002104,944Reinsurers’ share of outstanding claims9,5169,5283,311390,830111,073377,306531,601Reinsurers’ share of claims incurred but not reported3,8542,0681,72925,59911,784-12,05757,091Deferred policy acquisition costs2,1073,0397,8782,8091,2155,6781,04523,771Unallocated assets 848,284Total assets1,565,691LiabilitiesUnearned premiums17,50328,425146,69121,70814,26122,9058,394259,887Unearned reinsurance commission3,5104,8235514,7211,8867,8451,99225,328Outstanding claims12,90610,78671,119394,481112,845378,249610,423Claims incurred but not reported4,5682,31340,65126,19114,146-14,310102,179Premium deficiency reserve--10,845----10,845Additional unexpired risk reserve---399---399Unallocated loss adjustment expense provision2191543,577208487-3695,014Unallocated liabilities293,346Total liabilities 1,307,421 | 18 |
| Description of accounting policy for statutory deposit [text block] | 10Statutory depositIn compliance with Article 58 of the Implementing Regulations of SAMA, the Company has deposited 10% of its share capital, amounting to Saudi Riyals 20 million in a bank designated by SAMA. The statutory deposit is maintained with a reputed bank which is also a related party. The Company cannot withdraw this deposit without SAMA’s approval. Commission accruing on this deposit is payable to SAMA.In accordance with instructions received from the Saudi Arabian Monetary Authority (SAMA) vide their circular dated March 1, 2016; the Company has disclosed the commission due on the statutory deposit as an asset and a liability in these interim condensed financial statements. | 10 |
| Disclosure of notes forming part of accounts [abstract] | | |
| Disclosure of investments [text block] | 8 Investments NoteSeptember 30, 2020(Unaudited)December 31,2019(Audited)Fair value through income statement investments 8.1160,300 110,645Available-for-sale investment8.21,923 1,923162,223 112,5688.1 Fair value through income statement investments (FVIS)Movement in FVIS is as follows:Nine-month period ended September 30, 2020(Unaudited)Year ended December 31, 2019(Audited)Opening balance110,645105,004Additions during the period/year 50,000284Changes in fair value of investments(345)5,357Closing balance 160,300110,6458.2Available-for-sale investmentThis represents the Company’s 3.85% (December 31, 2019: 3.85%) holding in Najm for Insurance Services Company, a Saudi Closed Joint Stock Company. These shares are un-quoted and are carried at cost. In the absence of reliable financial information, management believe that fair values cannot be ascertained reliably. | 8 |
| Disclosure of investments at fair value through statement of income [text block] | 8.1 Fair value through income statement investments (FVIS)Movement in FVIS is as follows:Nine-month period ended September 30, 2020(Unaudited)Year ended December 31, 2019(Audited)Opening balance110,645105,004Additions during the period/year 50,000284Changes in fair value of investments(345)5,357Closing balance 160,300110,645 | 8.1 |
| Disclosure of due from related parties [text block] | 19Related parties balances and transactions19.1Related parties transactions Related parties represent major shareholders, directors and key management personnel of the Company, and entities controlled or significantly influenced by such parties.The Company in the normal course of business carries out transactions with its related parties. The transactions are made on agreed terms and are approved by the Board of Directors.The significant transactions with related parties and the related amounts are as follows:Three-month period ended September 30, 2020(Unaudited)Three-month period ended September 30, 2019 (Unaudited)Nine-month period ended September 30, 2020(Unaudited)Nine-month period ended September 30, 2019 (Unaudited)Related partyNature of transactionsBoard membersFees and related expenses90451,3551,450Key management personnelShareholders’ and related parties (common ownership)Remuneration and related expenses2,7752,8468,3558,428-Loans & advances402-652402-Insurance premiums written7,69313,64628,70049,763-Claims paid2,9653,7337,86810,643-Facultative premiums ceded (net)141841,7392,482-Facultative commission (reversed)/received(12)51285527-Facultative claim recovered801402881,097-Expenses incurred7981,8473,6184,433-Commission income on deposits4131,8972,2515,25019.2Related parties balances September 30,2020(Unaudited)December 31, 2019(Audited)Premiums receivable, net10,9278,913Claims payable2415,809Cash and cash equivalents with a shareholder 322,519354,679Amounts due (to)/from a shareholder for facultative transactions (100)39Advances due from key management personnel 639602Income tax receivable from foreign shareholders 3591,184Statutory deposit with a shareholder 20,00020,000Directors fees payable90-Accrued income on statutory deposit1,4271,275 | 19 |
| Disclosure of cash and cash equivalents [text block] | The accounting policies used in the preparation of these interim condensed financial statements are consistent with those used in the preparation of the annual financial statements for the year ended December 31, 2019 except as explained below:New IFRS, International Financial Reporting and Interpretations Committee’s interpretations (IFRIC) and amendments thereof, adopted by the CompanyThe following new standards, interpretations, amendments and revisions to existing standards, which were issued by the International Accounting Standards Board (IASB) have been effective from January 1, 2020, as applicable:Amendments to IFRS 7, IFRS 9 and IAS 39: Interest Rate Benchmark ReformA fundamental review and reform of major interest rate benchmarks is being undertaken globally. The InternationalAccounting Standards Board (“IASB”) is engaged in a two-phase process of amending its guidance to assist in a smoother transition away from IBOR.Phase (1) - The first phase of amendments to IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures focused on hedge accounting issues. The final amendments, issued in September 2019, amended specific hedge accounting requirements to provide relief from the potential effects of the uncertainty caused by IBOR reform. The amendments are effective from 1 January 2020 and are mandatory for all hedge relationships directly affected by IBOR reform. The Company has adopted these amendments along with the hedging relief for pre-replacement hedges.Phase (2) - The second phase relates to the replacement of benchmark rates with alternative risk-free rates. Currently, there is uncertainty as to the timing and the methods of transition for phase 2. As a result of these uncertainties, IBOR continues to be used as a reference rate in financial markets and is used in the valuation of instruments with maturities that exceed the expected end date for IBOR. Therefore, the Company believes the current market structure supports the continuation of hedge accounting as at 30 September 2020.Amendments to IAS 1 and IAS 8: Definition of MaterialThe amendments provide a new definition of material that states “information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.” The amendments clarify that materiality will depend on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements. A misstatement of information is material if it could reasonably be expected to influence decisions made by the primary users. These amendments had no impact on the interim condensed financial statements of, nor is there expected to be any future impact to the Company.Amendments to IFRS 3: Definition of a businessThe amendment to IFRS 3 clarifies that to be considered a business, an integrated set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. Furthermore, it clarified that a business can exist without including all of the inputs and processes needed to create outputs. These amendments had no impact on the interim condensed financial statements of the Company but may impact future periods should the Company enter into any business combinations.Conceptual Framework for Financial Reporting issued on March 29, 2018The Conceptual Framework is not a standard, and none of the concepts contained therein override the concepts or requirements in any standard. The purpose of the Conceptual Framework is to assist the IASB in developing standards, to help preparers develop consistent accounting policies where there is no applicable standard in place and to assist all parties to understand and interpret the standards. The revised Conceptual Framework includes some new concepts, provides updated definitions and recognition criteria for assets and liabilities and clarifies some important concepts. These amendments had no impact on the interim condensed financial statements of the Company.Standards issued but not yet effectiveStandards issued but not yet effective up to the date of issuance of the Company’s interim condensed financial statements are listed below. The listing is of standards and interpretations issued, which the Company reasonably expects to be applicable at a future date. The Company intends to adopt these standards when they become effective.Standard/InterpretationDescriptionEffective from periods beginning on or after the following dateIFRS 9Financial Instruments (note below)See note belowIFRS 17Insurance Contracts 1 January 2023IFRS 9 – Financial instrumentsThis standard was published on July 24, 2014 and has replaced IAS 39. The new standard addresses the following items related to financial instruments:a) Classification and measurementIFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss. A financial asset is measured at amortized cost if both:i. the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; andii. the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding (“SPPI”).The financial asset is measured at fair value through other comprehensive income and realized gains or losses would be recycled through profit or loss upon sale, if both conditions are met:i. the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows and for sale; andii. the contractual terms of cash flows are SPPI.Assets not meeting either of these categories are measured at fair value through profit or loss. Additionally, at initial recognition, an entity can use the option to designate a financial asset at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch.For equity instruments that are not held for trading, an entity can also make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of the instruments (including realized gains and losses on disposal), dividends being recognized in statement of income.Additionally, for financial liabilities that are designated as at fair value through profit or loss, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognized in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in statement of income.b) ImpairmentThe impairment model under IFRS 9 reflects expected credit losses, as opposed to incurred credit losses under IAS 39. Under the IFRS 9 approach, it is no longer necessary for a credit event to have occurred before credit losses are recognized. Instead, an entity always accounts for expected credit losses and changes in those expected credit losses. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition.c) Hedge accountingIFRS 9 introduces new requirements for hedge accounting that align hedge accounting more closely with Risk Management. The requirements establish a more principles-based approach to the general hedge accounting model. The amendments apply to all hedge accounting with the exception of portfolio fair value hedges of interest rate risk (commonly referred to as “fair value macro hedges”). For these, an entity may continue to apply the hedge accounting requirements currently in IAS 39. This exception was granted largely because the IASB is addressing macro hedge accounting as a separate project.Effective dateThe published effective date of IFRS 9 was January 1, 2018. However, amendments to IFRS 4 – Insurance Contracts: Applying IFRS 9 – Financial Instruments with IFRS 4 – Insurance Contracts, published on September 12, 2016, changes the existing IFRS 4 to allow entities issuing insurance contracts within the scope of IFRS 4 to mitigate certain effects of applying IFRS 9 before the IASB’s new insurance contract standard (IFRS 17 – Insurance Contracts) becomes effective. The amendments introduce two alternative options:1.Apply a temporary exemption from implementing IFRS 9 until the earlier of:a)the effective date of a new insurance contract standard; orb)annual reporting periods beginning on or after January 1, 2021. The IASB is proposing to extend the effective date of IFRS 17 and the IFRS 9 temporary exemption in IFRS 4 to January 1, 2023. Additional disclosures related to financial assets are required during the deferral period. This option is only available to entities whose activities are predominately connected with insurance and have not applied IFRS 9 previously; orAdopt IFRS 9 but, for designated financial assets, remove from profit or loss the effects of some of the accounting mismatches that may occur before the new insurance contract standard is implemented. During the interim period, additional disclosures are required. The Company has performed an initial assessment beginning January 1, 2018: (1) The carrying amount of the Company’s liabilities arising from contracts within the scope of IFRS 4 (including deposit components or embedded derivatives unbundled from insurance contracts) were compared to the total carrying amount of all its liabilities; and (2) the total carrying amount of the Company’s liabilities connected with insurance were compared to the total carrying amount of all its liabilities. Based on these assessments the Company determined that it is eligible for the temporary exemption. Consequently, the Company has decided to defer the implementation of IFRS 9 until the effective date of the new insurance contracts standard. Disclosures related to financial assets required during the deferral period are included in the Company’s annual financial statements.Impact assessmentOverall, the Company expects some impact of applying the impairment requirements of IFRS 9 on the financial statements of the Company. However, the impact of the same is not expected to be significant. At present it is not possible to provide reasonable estimate of the effects of application of this new standard as the Company is yet to perform a detailed review. IFRS 17 – Insurance ContractsOverviewThis standard has been published on May 18, 2017, it establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts and supersedes IFRS 4 – Insurance contracts.The new standard applies to insurance contracts issued, to all reinsurance contracts and to investment contracts with discretionary participating features provided the entity also issues insurance contracts. It requires to separate the following components from insurance contracts:i.embedded derivatives, if they meet certain specified criteria;ii.distinct investment components; andiii.any promise to transfer distinct goods or non-insurance services.These components should be accounted for separately in accordance with the related standards (IFRS 9 and IFRS 15). MeasurementIn contrast to the requirements in IFRS 4, which permitted insurers to continue to use the accounting policies for measurement purposes that existed prior to January 2015, IFRS 17 provides the following different measurement models:1)The General Measurement Model (GMM) is based on the following “building blocks”:a)the fulfilment cash flows (FCF), which comprises:probability-weighted estimates of future cash flows;an adjustment to reflect the time value of money (i.e. discounting) and the financial risks associated with those future cash flows; and a risk adjustment for non-financial risk. b) the Contractual Service Margin (CSM). The CSM represents the unearned profit for a group of insurance contracts and will be recognized as the entity provides services in the future. The CSM cannot be negative at inception; any net negative amount of the fulfilment cash flows at inception will be recorded in profit or loss immediately.At the end of each subsequent reporting period the carrying amount of a group of insurance contracts is remeasured to be the sum of:the liability for remaining coverage, which comprises the FCF related to future services and the CSM of the group at that date; andthe liability for incurred claims, which is measured as the FCF related to past services allocated to the group at that date.The CSM is adjusted subsequently for changes in cash flows related to future services but the CSM cannot be negative, so changes in future cash flows that are greater than the remaining CSM are recognized in profit or loss. Interest is also accreted on the CSM at rates locked in at initial recognition of a contract (i.e. discount rate used at inception to determine the present value of the estimated cash flows). Moreover, the CSM will be released into profit or loss based on coverage units, reflecting the quantity of the benefits provided and the expected coverage duration of the remaining contracts in the group.2)The Variable Fee Approach (VFA):VFA is a mandatory model for measuring contracts with direct participation features (also referred to as ‘direct participating contracts’). This assessment of whether the contract meets these criteria is made at inception of the contract and not reassessed subsequently. For these contracts, the CSM is also adjusted in addition to adjustment under general model:i.changes in the entity’s share of the fair value of underlying items;ii.changes in the effect of the time value of money and financial risks not relating to the underlying items.In addition, a simplified Premium Allocation Approach (PAA) is permitted for the measurement of the liability for the remaining coverage if it provides a measurement that is not materially different from the general model or if the coverage period for each contract in the group is one year or less. With the PAA, the liability for remaining coverage corresponds to premiums received at initial recognition less insurance acquisition cash flows. The general model remains applicable for the measurement of incurred claims. However, the entity is not required to adjust future cash flows for the time value of money and the effect of financial risk if those cash flows are expected to be paid/received in one year or less from the date the claims are incurred.Effective dateThe IASB issued an Exposure Draft Amendments to IFRS 17 during June 2019 and received comments from various stakeholders. The IASB is currently re-deliberating issues raised by stakeholders. For any proposed amendments to IFRS 17, the IASB will follow its normal due process for standard-setting. The effective date of IFRS 17 and the deferral of the IFRS 9 temporary exemption in IFRS 4, is currently January 1, 2021. Under the current exposure draft, it is proposed to amend the IFRS 17 effective date to reporting periods beginning on or after January 1, 2023. This is a deferral of 2 years compared to the previous date of January 1, 2021. Earlier application is permitted if both IFRS 15 – Revenue from Contracts with Customers and IFRS 9 – Financial Instruments have also been applied. The Company intend to apply the standard on its effective date. TransitionRetrospective application is required. However, if full retrospective application for a group of insurance contracts is impracticable, then the entity is required to choose either a modified retrospective approach or a fair value approach.Presentation and DisclosuresThe Company expects that the new standard will result in a change in accounting policies for insurance contracts together with amendments to presentation and disclosures. Impact assessmentThe Company is currently assessing the impact of the application and implementation of IFRS 17. As of the date of the publication of these interim condensed financial statements, the financial impact of adopting the standard is yet to be fully assessed by the Company. The Company has undertaken a Gap Analysis and the key Gaps are as follows: Impact areaSummary of impactFinancial impactNot yet fully assessed by the Company.Data impactThe Company believes that the data impact is not likely to be significant as a major proportion of the Company’s business would qualify for measurement under the premium allocation approach.IT systemsWith respect to IT systems, the Company has short listed a vendor to provide the necessary technical support to ensure an effective implementation of IFRS 17. The current accounting chart of accounts is under review for amendments to comply with IFRS 17 requirements. In addition, new disclosures will need to be developed.Process impactThe process impact is under evaluation, but no significant process changes are anticipated. However, should the Company shift its focus to majority long term business, the process impact would be significant.Impact on reinsurance arrangementsThe Company’s reinsurance arrangements under the proportional treaties currently are under testing to determine the suitable measurement approach.Impact on policies & control’s frameworksThe Company has hired an external consultant to modify their current policies control framework, to be more compliant towards the requirements of IFRS 17.Human resources The Company intends to recruit suitably qualified personnel who have a comprehensive understanding of the IFRS 17. The Company also intends to provide adequate training to existing staff.The Company has started with their implementation process and have set up a proper team, supervised by a steering committee. | 4 |
| Disclosure of statutory deposit [text block] | 10Statutory depositIn compliance with Article 58 of the Implementing Regulations of SAMA, the Company has deposited 10% of its share capital, amounting to Saudi Riyals 20 million in a bank designated by SAMA. The statutory deposit is maintained with a reputed bank which is also a related party. The Company cannot withdraw this deposit without SAMA’s approval. Commission accruing on this deposit is payable to SAMA.In accordance with instructions received from the Saudi Arabian Monetary Authority (SAMA) vide their circular dated March 1, 2016; the Company has disclosed the commission due on the statutory deposit as an asset and a liability in these interim condensed financial statements. | 10 |
| Disclosure of due to related parties [text block] | 19Related parties balances and transactions19.1Related parties transactions Related parties represent major shareholders, directors and key management personnel of the Company, and entities controlled or significantly influenced by such parties.The Company in the normal course of business carries out transactions with its related parties. The transactions are made on agreed terms and are approved by the Board of Directors.The significant transactions with related parties and the related amounts are as follows:Three-month period ended September 30, 2020(Unaudited)Three-month period ended September 30, 2019 (Unaudited)Nine-month period ended September 30, 2020(Unaudited)Nine-month period ended September 30, 2019 (Unaudited)Related partyNature of transactionsBoard membersFees and related expenses90451,3551,450Key management personnelShareholders’ and related parties (common ownership)Remuneration and related expenses2,7752,8468,3558,428-Loans & advances402-652402-Insurance premiums written7,69313,64628,70049,763-Claims paid2,9653,7337,86810,643-Facultative premiums ceded (net)141841,7392,482-Facultative commission (reversed)/received(12)51285527-Facultative claim recovered801402881,097-Expenses incurred7981,8473,6184,433-Commission income on deposits4131,8972,2515,25019.2Related parties balances September 30,2020(Unaudited)December 31, 2019(Audited)Premiums receivable, net10,9278,913Claims payable2415,809Cash and cash equivalents with a shareholder 322,519354,679Amounts due (to)/from a shareholder for facultative transactions (100)39Advances due from key management personnel 639602Income tax receivable from foreign shareholders 3591,184Statutory deposit with a shareholder 20,00020,000Directors fees payable90-Accrued income on statutory deposit1,4271,275 | 19 |
| Disclosure of zakat [text block] | 11 Zakat and income tax11.1 Components of zakat baseSignificant components of zakat base of the Company attributable to the Saudi shareholders, which are subject to adjustment under zakat and income tax regulations, are shareholders’ equity at the beginning of the period, adjusted net income and certain other items. Zakat base has been computed based on the Company’s understanding of the zakat regulations enforced in the Kingdom of Saudi Arabia. The zakat regulations in Saudi Arabia are subject to different interpretations, and the assessments to be raised by the General Authority of Zakat and Tax (“GAZT”) could be different from the declaration filed by the Company. 11.2 Provision for zakat and income taxSeptember 30, 2020(Unaudited)December 31, 2019 (Audited)Opening 5,853 7,305 Charge for zakat – current period/year3,787 4,161 Charge for zakat – prior period/year 769-Charge for income tax – current period/year1,173 1,184 Charge for income tax – prior period/year165-Payment of zakat (5,324) (4,784)Payment of income tax(1,311) (292)Reduction in income tax recoverable(38) (185)Tax paid in advance- (1,543)Other charges- 7 Closing 5,0745,853Zakat is payable at 2.578% of the approximate zakat base (excluding adjusted net income for the period) and 2.5% of adjusted net income for the period/year attributable to Saudi shareholders.Provision for income tax is payable at 20% of the adjusted net income attributable to the foreign shareholders of the Company, less allowances for foreign shareholders’ share in the losses carry forwarded from previous year calculated in accordance with the guidelines provided in the income tax regulations. Income tax paid is recovered from foreign shareholders.The shareholding percentage subject to zakat and income tax is as follows:September 30, 2020(Unaudited)December 31, 2019 (Audited)%%Zakat74.4474.44Income tax25.5625.56Status of assessments The Company has filed its tax returns with GAZT from inception up to 2019. The Company’s tax and Zakat position has been finalised up to and including the year ended December 31, 2018, except for the assessment for withholding tax as explained below. The tax return for 2013 is deemed to be finalized as no queries has been received from the GAZT and the statutory time limit of 5 years is over. The Company has received the final assessment for 2018 for zakat and income tax, the assessment has raised additional tax and Zakat liability for SR 175 thousand. Management has accepted this assessment and has paid this amount in the current reporting period. During the nine-month period ended September 30, 2020, the Company has received the final assessment for the years 2014 to 2017 for zakat and income tax. The assessment has raised additional tax and zakat liability of SR 934 thousand. Management has accepted this assessment and has paid this amount in the current reporting period.In addition to above, the Company had also received an assessment for the 2018 withholding tax liability during 2019 in which the GAZT had imposed additional taxes, including penalties, of SR 11.37 million. Management believes that the assessment raised is without merit and has appealed against this assessment. The Company’s initial appeal was rejected by the GAZT and has been escalated to the General Secretariat of Tax Committee (GSTC) online portal in order to assign the hearing session by the related Committee to discuss the Company's objection. However, management of the Company believes that there is a high probability to wave the majority of this assessment and hence no additional liability has been recorded against this assessment. | 11 |
| Disclosure of income tax [text block] | 11 Zakat and income tax11.1 Components of zakat baseSignificant components of zakat base of the Company attributable to the Saudi shareholders, which are subject to adjustment under zakat and income tax regulations, are shareholders’ equity at the beginning of the period, adjusted net income and certain other items. Zakat base has been computed based on the Company’s understanding of the zakat regulations enforced in the Kingdom of Saudi Arabia. The zakat regulations in Saudi Arabia are subject to different interpretations, and the assessments to be raised by the General Authority of Zakat and Tax (“GAZT”) could be different from the declaration filed by the Company. 11.2 Provision for zakat and income taxSeptember 30, 2020(Unaudited)December 31, 2019 (Audited)Opening 5,853 7,305 Charge for zakat – current period/year3,787 4,161 Charge for zakat – prior period/year 769-Charge for income tax – current period/year1,173 1,184 Charge for income tax – prior period/year165-Payment of zakat (5,324) (4,784)Payment of income tax(1,311) (292)Reduction in income tax recoverable(38) (185)Tax paid in advance- (1,543)Other charges- 7 Closing 5,0745,853Zakat is payable at 2.578% of the approximate zakat base (excluding adjusted net income for the period) and 2.5% of adjusted net income for the period/year attributable to Saudi shareholders.Provision for income tax is payable at 20% of the adjusted net income attributable to the foreign shareholders of the Company, less allowances for foreign shareholders’ share in the losses carry forwarded from previous year calculated in accordance with the guidelines provided in the income tax regulations. Income tax paid is recovered from foreign shareholders.The shareholding percentage subject to zakat and income tax is as follows:September 30, 2020(Unaudited)December 31, 2019 (Audited)%%Zakat74.4474.44Income tax25.5625.56Status of assessments The Company has filed its tax returns with GAZT from inception up to 2019. The Company’s tax and Zakat position has been finalised up to and including the year ended December 31, 2018, except for the assessment for withholding tax as explained below. The tax return for 2013 is deemed to be finalized as no queries has been received from the GAZT and the statutory time limit of 5 years is over. The Company has received the final assessment for 2018 for zakat and income tax, the assessment has raised additional tax and Zakat liability for SR 175 thousand. Management has accepted this assessment and has paid this amount in the current reporting period. During the nine-month period ended September 30, 2020, the Company has received the final assessment for the years 2014 to 2017 for zakat and income tax. The assessment has raised additional tax and zakat liability of SR 934 thousand. Management has accepted this assessment and has paid this amount in the current reporting period.In addition to above, the Company had also received an assessment for the 2018 withholding tax liability during 2019 in which the GAZT had imposed additional taxes, including penalties, of SR 11.37 million. Management believes that the assessment raised is without merit and has appealed against this assessment. The Company’s initial appeal was rejected by the GAZT and has been escalated to the General Secretariat of Tax Committee (GSTC) online portal in order to assign the hearing session by the related Committee to discuss the Company's objection. However, management of the Company believes that there is a high probability to wave the majority of this assessment and hence no additional liability has been recorded against this assessment. | 11 |
| Disclosure of statutory reserve [text block] | Statutory reserveAs required by Saudi Arabian Insurance Implementing Regulations, 20% of the income for the year after adjusting accumulated losses shall be set aside from net income as a statutory reserve until this amounts to 100% of the paid-up share capital. The required amount would be transferred at the year end. | 13 |
| Disclosure of technical reserve for insurance/takaful/reinsurance/retakaful operations [text block] | 7Technical reserves7.1 Net outstanding claims and reserves Net outstanding claims and reserves comprise of the following:September 30,2020(Unaudited) December 31,2019(Audited)Outstanding claims619,244610,423Claims incurred but not reported102,128102,179Premium deficiency reserve14,864 10,845Additional unexpired risk reserve165399Unallocated loss adjustment expense provision5,2325,014741,633728,860Less:Reinsurers’ share of outstanding claims(528,063)(531,601)Reinsurers’ share of claims incurred but not reported(54,223)(57,091)(582,286) (588,692)Net outstanding claims and reserves159,347 140,1687.2 Movement in unearned premiums Movement in unearned premiums comprise of the following:Nine-month period ended September 30, 2020(Unaudited)GrossReinsuranceNetBalance at the beginning of the period 259,887104,944 154,943Premium written during the period 641,847285,933 355,914Premium earned during the period (541,340)(234,292) (307,048)Balance at the end of the period 360,394156,585 203,809Year ended December 31, 2019(Audited)GrossReinsuranceNetBalance at the beginning of the year 253,354104,039149,315Premium written during the year735,044 319,338 415,706Premium earned during the year (728,511) (318,433)(410,078)Balance at the end of the year 259,887104,944 154,943 | 7 |
| Disclosure of compensation to key management personnel [text block] | 19Related parties balances and transactions19.1Related parties transactions Related parties represent major shareholders, directors and key management personnel of the Company, and entities controlled or significantly influenced by such parties.The Company in the normal course of business carries out transactions with its related parties. The transactions are made on agreed terms and are approved by the Board of Directors.The significant transactions with related parties and the related amounts are as follows:Three-month period ended September 30, 2020(Unaudited)Three-month period ended September 30, 2019 (Unaudited)Nine-month period ended September 30, 2020(Unaudited)Nine-month period ended September 30, 2019 (Unaudited)Related partyNature of transactionsBoard membersFees and related expenses90451,3551,450Key management personnelShareholders’ and related parties (common ownership)Remuneration and related expenses2,7752,8468,3558,428-Loans & advances402-652402-Insurance premiums written7,69313,64628,70049,763-Claims paid2,9653,7337,86810,643-Facultative premiums ceded (net)141841,7392,482-Facultative commission (reversed)/received(12)51285527-Facultative claim recovered801402881,097-Expenses incurred7981,8473,6184,433-Commission income on deposits4131,8972,2515,25019.2Related parties balances September 30,2020(Unaudited)December 31, 2019(Audited)Premiums receivable, net10,9278,913Claims payable2415,809Cash and cash equivalents with a shareholder 322,519354,679Amounts due (to)/from a shareholder for facultative transactions (100)39Advances due from key management personnel 639602Income tax receivable from foreign shareholders 3591,184Statutory deposit with a shareholder 20,00020,000Directors fees payable90-Accrued income on statutory deposit1,4271,275 | 19 |
| Disclosure of earnings per share [text block] | Share capital and earnings per share The authorized, issued and paid up capital of the Company is SR 200 million divided into 20 million shares of SR 10 each (December 31, 2019: SAR 200 million divided into 20 million shares of SR 10 each).Earnings per share for the three-month and nine-month periods ended September 30, 2020 have been calculated by dividing the net income for the period attributable to the shareholders by the weighted average number of ordinary shares at the statement of financial position date. Diluted earnings per share is not applicable to the Company. | 12 |
| Disclosure of investments held at fair value through statement of income [text block] | 8.2Available-for-sale investmentThis represents the Company’s 3.85% (December 31, 2019: 3.85%) holding in Najm for Insurance Services Company, a Saudi Closed Joint Stock Company. These shares are un-quoted and are carried at cost. In the absence of reliable financial information, management believe that fair values cannot be ascertained reliably. | 8.2 |
| Disclosure of related party transactions [text block] | 19Related parties balances and transactions19.1Related parties transactions Related parties represent major shareholders, directors and key management personnel of the Company, and entities controlled or significantly influenced by such parties.The Company in the normal course of business carries out transactions with its related parties. The transactions are made on agreed terms and are approved by the Board of Directors.The significant transactions with related parties and the related amounts are as follows:Three-month period ended September 30, 2020(Unaudited)Three-month period ended September 30, 2019 (Unaudited)Nine-month period ended September 30, 2020(Unaudited)Nine-month period ended September 30, 2019 (Unaudited)Related partyNature of transactionsBoard membersFees and related expenses90451,3551,450Key management personnelShareholders’ and related parties (common ownership)Remuneration and related expenses2,7752,8468,3558,428-Loans & advances402-652402-Insurance premiums written7,69313,64628,70049,763-Claims paid2,9653,7337,86810,643-Facultative premiums ceded (net)141841,7392,482-Facultative commission (reversed)/received(12)51285527-Facultative claim recovered801402881,097-Expenses incurred7981,8473,6184,433-Commission income on deposits4131,8972,2515,25019.2Related parties balances September 30,2020(Unaudited)December 31, 2019(Audited)Premiums receivable, net10,9278,913Claims payable2415,809Cash and cash equivalents with a shareholder 322,519354,679Amounts due (to)/from a shareholder for facultative transactions (100)39Advances due from key management personnel 639602Income tax receivable from foreign shareholders 3591,184Statutory deposit with a shareholder 20,00020,000Directors fees payable90-Accrued income on statutory deposit1,4271,275 | 19 |
| Disclosure of entity's operating segments [text block] | 18 Operating Segments 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 its 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 condensed 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 profit or loss since December 31, 2019. Segment assets do not include cash and cash equivalents, premiums receivables, investments, due from reinsurers, prepaid expenses and other assets, property and equipment, statutory deposit and accrued income on statutory deposit. Accordingly, they are included in unallocated assets. Segment liabilities do not include policy holders claims payable, accrued and other liabilities, due to reinsurers, agents, brokers and third-party administrators, surplus distribution payable, zakat and income tax, and accrued income on statutory deposit. 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 September 30, 2020 and December 31, 2019, its total revenues, expenses, and net income for the three-month and nine-month periods ended September 30, 2020 and September 30, 2019, are as follows:MarinePropertyMotorEngineeringAccident & liabilityExtended warrantyTerm lifeTotalFor the three-monthperiod ended September 30,2020 (unaudited)RevenuesGross premiums written10,14330,48772,81618,5259,7146,77810,922159,385Reinsurance premiums ceded (7,152)(28,219)147(17,053)(8,749)(6,778)(6,948) (74,752)Excess of loss expenses(898)(922)(1,917)(495)---(4,232)Net premiums written2,0931,34671,046977965-3,97480,401Change in unearnedpremiums, net(1,453)57520,279(467)1,268-1,74321,945Net premiums earned6401,92191,3255102,233-5,717102,346Reinsurance commissions 1,4395,0892912,6611,56474055012,334Other underwriting income194-25-333Total revenues2,0987,01491,6163,1733,8027406,270114,713Cost and expensesGross claims paid and loss adjustment expenses, net of recoveries2,4023,04769,2593,2239291,16819,52699,554Reinsurer’s share of claims paid(1,591)(2,965)(1,871)(3,103)(721)(1,168)(16,211)(27,630)Net claims paid8118267,388120208-3,31571,924Changes in outstanding claims, net(853)1711,198469(100) -1,0331,918Changes in claims incurred but not reported, net(131)(46)1,051(38)(121)-175890Net claims incurred(173)20769,637551(13)-4,52374,732Premium deficiency reserve--(1,204)----(1,204)Additional unexpired risk reserve---28---28Unallocated loss adjustment expense provision/(reversal)6(147)(217)14990-44(75)Policy acquisition costs4982,8016,0701,3709245352,03614,234Total underwriting cost and expenses3312,86174,2862,0981,0015356,60387,715Net underwriting income/ (loss)1,7674,15317,3301,0752,801205(333)26,998Other operating (expenses) / income Impairment allowance for doubtful premiums, reinsurers and other receivables(2,328)General and administration expenses(34,091)Commission income on deposits413Unrealized gain on investments184Other income4,167Total other operating expenses, net(31,655)Net loss for the period attributable to the shareholders, before zakat and income tax(4,657)Zakat(1,200)Income tax(55)Net loss for the period(5,912)MarinePropertyMotorEngineeringAccident & liabilityExtended warrantyTerm lifeTotal For the nine-monthperiod ended September 30,2020 (unaudited)RevenuesGross premiums written34,777110,735328,15554,16639,76919,15755,088 641,847Reinsurance premiums ceded (25,984) (100,911)(6,226)(50,755)(32,298)(19,157)(36,146)(271,477)Excess of loss expenses(3,768)(2,372)(7,041)(1,095)(180)-(14,456)Net premiums written5,0257,452314,8882,3167,291-18,942355,914Change in unearned premiums, net257(1,725)(41,407)(592)(575)-(4,824)(48,866)Net premiums earned5,2825,727273,4811,7246,716-14,118307,048Reinsurance commissions 8,00314,1531,0159,2224,8981,8364,19443,321Other underwriting income6016-922-7114Total revenues13,34519,896274,49610,95511,6361,83618,319350,483Cost and expensesGross claims paid and loss adjustment expenses, net of recoveries8,6547,011169,2425,1805,4723,70743,609 242,875Reinsurer’s share of claims paid(6,441)(6,645)(4,699)(4,793)(4,390)(3,707)(36,131)(66,806)Net claims paid2,213366164,5433871,082-7,478176,069Changes in outstanding claims, net(1,158)1,89010,290490(431)-1,278 12,359Changes in claims incurred but not reported, net(286)952,563(261)(107)-8132,817Net claims incurred7692,351177,396616544-9,569191,245Premium deficiency reserve--4,019----4,019Additional unexpired risk reserve---(234)---(234)Unallocated loss adjustment expense provision109(95)814478-(26)218Policy acquisition costs4,4617,94018,7274,9633,0311,3265,99146,439Total underwriting cost and expenses5,33910,196200,1505,4893,6531,32615,534241,687Net underwriting income 8,0069,70074,3465,4667,9835102,785108,796Other operating (expenses) / income Impairment allowance for doubtful premiums, reinsurers and other receivables(13,180)General and administration expenses(102,075)Commission income on deposits2,251Unrealized loss on investments(345)Other income7,051Total Other operating expenses, net(106,298)Net income for the period2,498Total (loss) attributed to policyholders(841)Net income for the period attributable to the shareholders, before zakat and income tax1,657Zakat(4,556)Income tax(1,300)Net loss for the period(4,199)MarinePropertyMotorEngineeringAccident & liabilityExtended warrantyTerm lifeTotal For the three-monthperiod ended September 30,2019 (unaudited) RevenuesGross premiums written21,68721,22853,031 12,3664,0274,30414,197130,840Reinsurance premiums ceded (18,198) (19,317)(1,331) (11,564) (2,714)(4,304)(11,958) (69,386)Excess of loss expenses(1,300)(600)(1,250)(250)(75)--(3,475)Net premiums written2,1891,31150,4505521,238-2,23957,979Change in unearned premiums, net(1,176)89640,32819820-1,00941,896Net premiums earned1,0132,20790,7785712,058-3,24899,875Reinsurance commissions 1,9514,4885132,5851,5272,9824,83118,877Other underwriting income203-34-232Total revenues2,9846,69891,2913,1593,5892,9828,081118,784Cost and expensesGross claims paid and loss adjustment expenses, net of recoveries 2,52816,59992,1333,2289191,41110,447127,265Reinsurer’s share of claims paid(1,786)(15,697)(4,332)(3,067)(630)(1,411)(9,005)(35,928)Net claims paid74290287,801161289-1,44291,337Changes in outstanding claims, net1,292(1,175)(4,639)(248)(96) -711(4,155)Changes in claims incurred but not reported, net(951)(72)(7,449)(251)598-(111)(8,236)Net claims incurred1,083(345)75,713(338)791-2,04278,946Premium deficiency reserve-(4,048)6,750(1,173)---1,529Policy acquisition costs1,0992,2695,8581,4058302,4612,45016,372Total underwriting cost and expenses2,182(2,124)88,321(106)1,6212,4614,49296,847Net underwriting income 8028,8222,9703,2651,9685213,58921,937Other operating (expenses) / income.Impairment allowance for doubtful premium, reinsurers and other receivables(4,229)General and administration expenses(26,551)Commission income on deposits1,897Unrealized gain on investments1,181Other income39Total Other operating expenses, net(27,663)Net loss for the period attributable to the shareholders before zakat and income tax(5,726)Zakat(533)Income tax515Net loss for the period(5,744) MarinePropertyMotorEngineeringAccident & liabilityExtended warrantyTerm lifeTotal For the nine-month period ended September 30,2019 (unaudited) RevenuesGross premiums written45,18595,091327,942 38,60825,81714,58462,464609,691Reinsurance premiums ceded (35,366)(85,026)(8,233)(36,010)(18,026)(14,584)(53,791)(251,036)Excess of loss expenses(1,989)(2,660)(4,175)(750)(225)-(119)(9,918)Net premiums written7,8307,405315,5341,8487,566-8,554348,737Change in unearned premiums, net(978)(1,734)(37,236)(351)(1,618)-(1,136)(43,053)Net premiums earned6,8525,671278,2981,4975,948-7,418305,684Reinsurance commissions 6,96714,2912,4936,8504,2849,32814,31358,526Other underwriting income63681002324-7285Total revenues13,88220,030280,8918,37010,2569,32821,738364,495Cost and expensesGross claims paid and loss adjustment expenses, net of recoveries7,19021,159243,44712,3491,9044,06330,973321,085Reinsurer’s share of claims paid(5,438)(19,506)(14,513)(11,595)(1,424)(4,063)(25,746) (82,285)Net claims paid1,7521,653228,934754480-5,227238,800Changes in outstanding claims, net2,4885899,964(1,339)641-33412,677Changes in claims incurred but not reported, net(912)508,491(513)344-(548)6,912Net claims incurred3,3282,292247,389(1,098)1,465-5,013258,389Premium deficiency reserve(15)(1,721)(6,829)(820)---(9,385)Additional unexpired risk reserve---14---14Unallocated loss adjustment expense provision(142)922,660(111)(33)-(87)2,379Policy acquisition costs4,0247,01516,9673,6072,2677,7307,39449,004Total underwriting cost and expenses7,1957,678260,1871,5923,699773012,320300,401Net underwriting income 6,68712,35220,7046,7786,5571,5989,41864,094Other operating (expenses) / incomeImpairment allowance for doubtful premium, reinsurers and other receivables(21,531)General and administration expenses(78,468)Commission income on deposits5,250Unrealized gain on investments3,838Other income13,991Total other operating expenses, net(76,920)Net loss for the period attributable to the shareholders, before zakat and income tax(12,826)Zakat(3,147)Income tax(75)Net loss for the period(16,048) MarinePropertyMotorEngineeringAccident & liabilityExtended warrantyTerm life TotalAs at September 30, 2020(Unaudited)AssetsReinsurers’ share of unearned premiums7,74450,8393,09427,95120,32336,7629,872 156,585Reinsurers’ share of outstanding claims6,37219,0072,928384,658104,5214110,536 528,063Reinsurers’ share of claims incurred but not reported5,4633,4612,40022,9208,146-11,833 54,223Deferred policy acquisition costs1,1554,97110,4963,4632,0739,3331,848 33,339Unallocated assets830,555Total assets1,602,765LiabilitiesUnearned premiums10,69555,513187,52230,11923,69436,76216,089360,394Unearned reinsurance commission1,8869,0344746,1383,54312,89858534,558Outstanding claims8,60222,15581,027388,800105,8624112,757619,244Claims incurred but not reported5,8903,80143,88623,25110,401-14,899102,128Premium deficiency reserve--14,864----14,864Additional unexpired risk reserve---165---165Unallocated loss adjustment expense provision230413,667358533-4035,232Unallocated liabilities212,850Total liabilities 1,349,435MarinePropertyMotorEngineeringAccident & liabilityExtended warrantyTerm life TotalAs at December 31, 2019 (Audited)AssetsReinsurers’ share of unearned premiums14,29425,4763,67020,13111,46622,9057,002104,944Reinsurers’ share of outstanding claims9,5169,5283,311390,830111,073377,306531,601Reinsurers’ share of claims incurred but not reported3,8542,0681,72925,59911,784-12,05757,091Deferred policy acquisition costs2,1073,0397,8782,8091,2155,6781,04523,771Unallocated assets 848,284Total assets1,565,691LiabilitiesUnearned premiums17,50328,425146,69121,70814,26122,9058,394259,887Unearned reinsurance commission3,5104,8235514,7211,8867,8451,99225,328Outstanding claims12,90610,78671,119394,481112,845378,249610,423Claims incurred but not reported4,5682,31340,65126,19114,146-14,310102,179Premium deficiency reserve--10,845----10,845Additional unexpired risk reserve---399---399Unallocated loss adjustment expense provision2191543,577208487-3695,014Unallocated liabilities293,346Total liabilities 1,307,421 | 18 |
| Disclosure of capital management [text block] | 20 Capital management Objectives are set by the Company to maintain healthy capital ratios in order to support its business objectives and maximize shareholders’ value.The Company manages its capital requirements by assessing shortfalls between reported and required capital levels on a regular basis. Adjustments to current capital levels are made in light of changes in market conditions and risk characteristics of the Company’s activities. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders or issue shares.In the opinion of the Board of Directors, the Company has fully complied with the externally imposed capital requirements during the reported financial period. Management, through various scenario analysis as required by the Board of Directors, has proactively assessed the potential of the COVID-19 by performing stress testing for various variables like: gross premium growth, increase in employee cost, YTD loss ratio, outstanding premium provisions etc. and the related impact on the revenue, profitability, loss ratio and solvency ratio for the year ending December 31, 2020. Management has concluded that based on the stress testing performed the solvency of the Company would not be adversely affected. As with any forecasts, the projections and likelihoods of occurrence are underpinned by significant judgment and uncertainty 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. | 20 |
| Disclosure of commitments and contingencies, general [text block] | Commitments and contingenciesThe Company’s Bankers have issued guarantee of SR 1.4 million (December 31, 2019: SR 2.1 million) to various suppliers on behalf of the Company, also see note 11.2 Status of assessments | 14 |
| Disclosure of board of director's approval of the financial statements [text block] | Approval of the interim condensed financial statements These interim condensed financial statements have been approved by the Board of Directors on November 1st, 2020 G corresponding to Rabi Al Awal 15, 1442 H. | 24 |
| Disclosure of other notes relevant to understanding of financial statements [text block] | 23Impact of COVID-19 The Coronavirus (“COVID-19”) pandemic continues to disrupt global markets as many geographies are beginning to experience a “second wave” of infections despite having previously controlled the outbreak through aggressive precautionary measures such as imposing restrictions on travel, lockdowns and strict social distancing rules. The Government of Kingdom of Saudi Arabia (“the Government”) however has managed to successfully control the outbreak to date, owing primarily to the effective measures taken by the Government, following which the Government has now ended the lockdowns and has begun taking phased measures to normalize international travel and resume Umrah pilgrimages. The Company continues to be cognisant of both the micro and macroeconomic challenges that COVID-19 has posed, the teething effects of which may be felt for some time and is closely monitoring its exposures at a granular level, while maintaining acceptable service levels and operational activities and ensuring the safety and wellbeing of its employees. The major impact of Covid-19 pandemic is seen in 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. | 23 |
