| 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 Ministry of Commerce & Investment’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, 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 has obtained Saudi Central Bank (“SAMA”) license number TMN/29/20106 valid up to Rajab 3,1443H (corresponding to February 5, 2022). The Company was listed on the Saudi stock exchange (Tadawul) on June 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] | 2Basis of preparation (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 Organization for Chartered and Professional 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. The Company’s interim statement of financial position is presented in order of liquidity. Except for property and equipment, intangible assets, investments, 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 24 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 (SAR) and are rounded off to the nearest thousands.The interim condensed financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with the annual financial statement as of and for the year ended December 31, 2020.(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 25 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] | 3 Significant accounting policiesThe 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, 2020 except as explained below:New IFRS, International Financial Reporting and Interpretations Committee’s interpretations (IFRIC) and amendments thereof, adopted by the CompanyA number of new standards and amendments became applicable for the current reporting period. The Company did not have to change its accounting policies or make retrospective adjustments as a result of adopting these amended standards.Standards issued but not yet effectiveStandards and interpretation 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 are effectiveStandard/InterpretationDescriptionEffective from periods beginning on or after the following dateIFRS 17Insurance Contracts See note belowIFRS 9Financial InstrumentsSee note belowIFRS 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, 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; or2.Adopt IFRS 9 but, for designated financial assets, remove from profit or loss the effects of some of the accounting mismatches that may occur before the new insurance contract standard is implemented. During the interim period, additional disclosures are required.The Company has performed a detailed 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 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; anda risk adjustment for non-financial risk.b)the Contractual Service Margin (CSM). The CSM represents the unearned profit for a group of insurance contracts and will be recognized as the entity provides services in the future. The CSM cannot be negative at inception; any net negative amount of the fulfilment cash flows at inception will be recorded in profit or loss immediately.At the end of each subsequent reporting period the carrying amount of a group of insurance contracts is remeasured to be the sum of:the liability for remaining coverage, which comprises the FCF related to future services and the CSM of the group at that date;and the liability for incurred claims, which is measured as the FCF related to past services allocated to the group at that date.The CSM is adjusted subsequently for changes in cash flows related to future services but the CSM cannot be negative, so changes in future cash flows that are greater than the remaining CSM are recognized in 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 group2)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 for in addition to adjustment under general model:i.changes in the entity’s share of the fair value of underlying items; andii.changes in the effect of the time value of money and financial risks not relating to the underlying items.In addition, a simplified Premium Allocation Approach (PAA) is permitted for the measurement of the liability for the remaining coverage if it provides a measurement that is not materially different from the general model or if the coverage period for each contract in the group is one year or less. With the PAA, the liability for remaining coverage corresponds to premiums received at initial recognition less insurance acquisition cash flows. 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, 2023. Earlier application is permitted if both IFRS 15 – Revenue from Contracts with Customers and IFRS 9 – Financial Instruments have also been applied. The Company intend to apply the standard on its effective date.TransitionRetrospective application is required. However, if full retrospective application for a group of insurance contracts is impracticable, then the entity is required to 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 to the 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: WATANIYA INSURANCE COMPANY (A Saudi Joint Stock Company)Notes to the interim condensed financial statements (continued)June 30, 2021(All amounts in Saudi Riyals thousands unless otherwise stated)3 Significant accounting policies (continued)Standards issued but not yet effective (continued) IFRS 17 – Insurance contracts (continued)Impact areaSummary of impactFinancial impactA limited financial impact review was done, as required by the SAMA, for under writing during the year 2018. The financial impact of applying requirements of IFRS 17 compared to IFRS 4 was not significant. A more detailed review is planned for the last quarter of 2021.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 systemsOracle Financial Analyzer tool (OFSAA) has been procured by the Company to implement IFRS 17. Oracle Corporation has been awarded the contract to implement the OFSAA tool. Technical discussions between the Source core systems and the impacted systems have started. The impact analysis is in progress including the data benchmarking to comply IFRS 17 reporting.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 have been evaluated under the requirements of the IFRS 17 standard. The initial conclusion is that the reinsurance arrangements qualify for the PAA assessment. The initial conclusion is under constant review.Impact on policies & control’s frameworksThe Company is in the process of updating Accounting and Finance Policies and Procedures to cover the new and additional requirements: Unbundling Level of aggregation Measurement models Risk Adjustment Methodologies New presentation and disclosure requirementThe revised manual will be followed by Finance function to ensure that financial statements are in conformity with IFRS 17 on the effective date.Human resources The Company has recruited several key personnel, including the Deputy CFO, Chief Technical Officer, who will play a key role in the IFRS 17 implementation. It has alsodeveloped a training plan and 3 training sessions have already been completed as following:1- IFRS 17 overview to all stakeholders2- PAA Measurement Model3- GMM Measurement ModelRemaining sessions are planned to be completed during 2021.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] | 3 Significant accounting policiesThe 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, 2020 except as explained below:New IFRS, International Financial Reporting and Interpretations Committee’s interpretations (IFRIC) and amendments thereof, adopted by the CompanyA number of new standards and amendments became applicable for the current reporting period. The Company did not have to change its accounting policies or make retrospective adjustments as a result of adopting these amended standards.Standards issued but not yet effectiveStandards and interpretation 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 are effectiveStandard/InterpretationDescriptionEffective from periods beginning on or after the following dateIFRS 17Insurance Contracts See note belowIFRS 9Financial InstrumentsSee note belowIFRS 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, 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; or2.Adopt IFRS 9 but, for designated financial assets, remove from profit or loss the effects of some of the accounting mismatches that may occur before the new insurance contract standard is implemented. During the interim period, additional disclosures are required.The Company has performed a detailed 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 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; anda risk adjustment for non-financial risk.b)the Contractual Service Margin (CSM). The CSM represents the unearned profit for a group of insurance contracts and will be recognized as the entity provides services in the future. The CSM cannot be negative at inception; any net negative amount of the fulfilment cash flows at inception will be recorded in profit or loss immediately.At the end of each subsequent reporting period the carrying amount of a group of insurance contracts is remeasured to be the sum of:the liability for remaining coverage, which comprises the FCF related to future services and the CSM of the group at that date;and the liability for incurred claims, which is measured as the FCF related to past services allocated to the group at that date.The CSM is adjusted subsequently for changes in cash flows related to future services but the CSM cannot be negative, so changes in future cash flows that are greater than the remaining CSM are recognized in 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 group2)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 for in addition to adjustment under general model:i.changes in the entity’s share of the fair value of underlying items; andii.changes in the effect of the time value of money and financial risks not relating to the underlying items.In addition, a simplified Premium Allocation Approach (PAA) is permitted for the measurement of the liability for the remaining coverage if it provides a measurement that is not materially different from the general model or if the coverage period for each contract in the group is one year or less. With the PAA, the liability for remaining coverage corresponds to premiums received at initial recognition less insurance acquisition cash flows. 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, 2023. Earlier application is permitted if both IFRS 15 – Revenue from Contracts with Customers and IFRS 9 – Financial Instruments have also been applied. The Company intend to apply the standard on its effective date.TransitionRetrospective application is required. However, if full retrospective application for a group of insurance contracts is impracticable, then the entity is required to 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 to the 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: WATANIYA INSURANCE COMPANY (A Saudi Joint Stock Company)Notes to the interim condensed financial statements (continued)June 30, 2021(All amounts in Saudi Riyals thousands unless otherwise stated)3 Significant accounting policies (continued)Standards issued but not yet effective (continued) IFRS 17 – Insurance contracts (continued)Impact areaSummary of impactFinancial impactA limited financial impact review was done, as required by the SAMA, for under writing during the year 2018. The financial impact of applying requirements of IFRS 17 compared to IFRS 4 was not significant. A more detailed review is planned for the last quarter of 2021.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 systemsOracle Financial Analyzer tool (OFSAA) has been procured by the Company to implement IFRS 17. Oracle Corporation has been awarded the contract to implement the OFSAA tool. Technical discussions between the Source core systems and the impacted systems have started. The impact analysis is in progress including the data benchmarking to comply IFRS 17 reporting.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 have been evaluated under the requirements of the IFRS 17 standard. The initial conclusion is that the reinsurance arrangements qualify for the PAA assessment. The initial conclusion is under constant review.Impact on policies & control’s frameworksThe Company is in the process of updating Accounting and Finance Policies and Procedures to cover the new and additional requirements: Unbundling Level of aggregation Measurement models Risk Adjustment Methodologies New presentation and disclosure requirementThe revised manual will be followed by Finance function to ensure that financial statements are in conformity with IFRS 17 on the effective date.Human resources The Company has recruited several key personnel, including the Deputy CFO, Chief Technical Officer, who will play a key role in the IFRS 17 implementation. It has alsodeveloped a training plan and 3 training sessions have already been completed as following:1- IFRS 17 overview to all stakeholders2- PAA Measurement Model3- GMM Measurement ModelRemaining sessions are planned to be completed during 2021.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] | 3 Significant accounting policiesThe 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, 2020 except as explained below:New IFRS, International Financial Reporting and Interpretations Committee’s interpretations (IFRIC) and amendments thereof, adopted by the CompanyA number of new standards and amendments became applicable for the current reporting period. The Company did not have to change its accounting policies or make retrospective adjustments as a result of adopting these amended standards.Standards issued but not yet effectiveStandards and interpretation 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 are effectiveStandard/InterpretationDescriptionEffective from periods beginning on or after the following dateIFRS 17Insurance Contracts See note belowIFRS 9Financial InstrumentsSee note belowIFRS 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, 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; or2.Adopt IFRS 9 but, for designated financial assets, remove from profit or loss the effects of some of the accounting mismatches that may occur before the new insurance contract standard is implemented. During the interim period, additional disclosures are required.The Company has performed a detailed 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 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; anda risk adjustment for non-financial risk.b)the Contractual Service Margin (CSM). The CSM represents the unearned profit for a group of insurance contracts and will be recognized as the entity provides services in the future. The CSM cannot be negative at inception; any net negative amount of the fulfilment cash flows at inception will be recorded in profit or loss immediately.At the end of each subsequent reporting period the carrying amount of a group of insurance contracts is remeasured to be the sum of:the liability for remaining coverage, which comprises the FCF related to future services and the CSM of the group at that date;and the liability for incurred claims, which is measured as the FCF related to past services allocated to the group at that date.The CSM is adjusted subsequently for changes in cash flows related to future services but the CSM cannot be negative, so changes in future cash flows that are greater than the remaining CSM are recognized in 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 group2)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 for in addition to adjustment under general model:i.changes in the entity’s share of the fair value of underlying items; andii.changes in the effect of the time value of money and financial risks not relating to the underlying items.In addition, a simplified Premium Allocation Approach (PAA) is permitted for the measurement of the liability for the remaining coverage if it provides a measurement that is not materially different from the general model or if the coverage period for each contract in the group is one year or less. With the PAA, the liability for remaining coverage corresponds to premiums received at initial recognition less insurance acquisition cash flows. 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, 2023. Earlier application is permitted if both IFRS 15 – Revenue from Contracts with Customers and IFRS 9 – Financial Instruments have also been applied. The Company intend to apply the standard on its effective date.TransitionRetrospective application is required. However, if full retrospective application for a group of insurance contracts is impracticable, then the entity is required to 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 to the 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: WATANIYA INSURANCE COMPANY (A Saudi Joint Stock Company)Notes to the interim condensed financial statements (continued)June 30, 2021(All amounts in Saudi Riyals thousands unless otherwise stated)3 Significant accounting policies (continued)Standards issued but not yet effective (continued) IFRS 17 – Insurance contracts (continued)Impact areaSummary of impactFinancial impactA limited financial impact review was done, as required by the SAMA, for under writing during the year 2018. The financial impact of applying requirements of IFRS 17 compared to IFRS 4 was not significant. A more detailed review is planned for the last quarter of 2021.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 systemsOracle Financial Analyzer tool (OFSAA) has been procured by the Company to implement IFRS 17. Oracle Corporation has been awarded the contract to implement the OFSAA tool. Technical discussions between the Source core systems and the impacted systems have started. The impact analysis is in progress including the data benchmarking to comply IFRS 17 reporting.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 have been evaluated under the requirements of the IFRS 17 standard. The initial conclusion is that the reinsurance arrangements qualify for the PAA assessment. The initial conclusion is under constant review.Impact on policies & control’s frameworksThe Company is in the process of updating Accounting and Finance Policies and Procedures to cover the new and additional requirements: Unbundling Level of aggregation Measurement models Risk Adjustment Methodologies New presentation and disclosure requirementThe revised manual will be followed by Finance function to ensure that financial statements are in conformity with IFRS 17 on the effective date.Human resources The Company has recruited several key personnel, including the Deputy CFO, Chief Technical Officer, who will play a key role in the IFRS 17 implementation. It has alsodeveloped a training plan and 3 training sessions have already been completed as following:1- IFRS 17 overview to all stakeholders2- PAA Measurement Model3- GMM Measurement ModelRemaining sessions are planned to be completed during 2021.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] | 4Cash and cash equivalentsJune 30, 2021(Unaudited)December 31, 2020(Audited)Cash in hand2226Bank balances56,60767,707Deposits maturing within 3 months from the acquisition date13,00013,00069,62980,733Except for balances amounting to SAR 1.24 million (December 31, 2020: SAR 0.33 million), the bank balances and deposits are with a bank which is a related party (see note 22), registered in Saudi Arabia and are denominated in Saudi Riyals and US Dollars. The deposits have an original maturity of less than three months and yield income at rates of 0.4% to 0.6% per annum (December 31, 2020: 0.65% per annum). | 4 |
| Description of accounting policy for receivables [text block] | 6Premiums receivable - netJune 30, 2021 (Unaudited)December 31, 2020(Audited)Receivable from policy holders304,368235,313Impairment allowance for doubtful premium receivables(44,655)(40,775)259,713194,538Movement in the impairment allowance for doubtful premium receivables is as follows: June 30, 2021 (Unaudited)December 31, 2020(Audited)Opening 40,77533,838Provision for the period / year6,21810,625Write-offs(2,338)(3,688)Closing 44,65540,775 | 6 |
| Description of accounting policy for zakat [text block] | 13Zakat and income tax13.1 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 Zakat, Tax and Customs Authority (“ZATCA”) could be different from the declaration filed by the Company. 13.2 Provision for zakat and income taxZakatIncome taxTotalJanuary 1, 20215,1131,4916,604Provision for the current period1,970-1,970Payments during the period(5,016)(1,054)(6,070)June 30, 20212,0674372,504ZakatIncome taxTotalJanuary 1, 20204,6691,1845,853Provision for the current year4,9991,4536,452Other adjustments769165934Payments during the year(5,324)(1,311)(6,635)December 31, 20205,1131,4916,604Zakat 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. No provision for income tax has been charged in these interim condensed financial statements as the Company has incurred a taxable loss during the six-month period ended June 30, 2021 (June 30, 2020: SAR 1.25 million).The shareholding percentage subject to zakat and income tax is as follows:June 30, 2021(Unaudited)December 31, 2020 (Audited) % %Zakat share in capital76.2475.33Zakat share in profit76.24 75.34Income tax share in capital23.7624.67Income tax share in profit23.76 24.6613.3Status of assessments The Company has filed its tax returns with ZATCA from inception up to 2020. 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.During 2019, the Company had received an assessment for the 2018 withholding tax liability in which the ZATCA had imposed additional taxes, including penalties, of SAR 11.37 million. Management believes that the assessment raised is without merit and had appealed against this assessment. The Company’s initial appeal was rejected by the ZATCA and was escalated to the General Secretariat of Tax Committee (GSTC) online portal in order to assign the hearing session by the Committee for Resolution of Tax Violations and Disputes (“CRTVD”). On August 05, 2021 the CRTVD issued its summary decision in which they agreed with the ZATCA's revised assessments. The Company is awaiting the official written decision from CRTVD in order to understand the rationale behind the decision. The Company plans to escalate its objection to the Advanced Committee for Tax Violations and Dispute Resolution (ACTVDR) within 30 days from receiving the official written decision. Management of the Company continues to believe that there is a high probability that the majority of this assessment would be waived and hence no additional liability has been recorded against this assessment. | 13 |
| Description of accounting policy for fair value measurement [text block] | 20Fair 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 liabilityThe 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. 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 year end. There are no transfers between Level 1, Level 2 and Level 3 during the year.As at June 30, 2021 and December 31, 2020, all financial instruments which are fair valued are Level 3 instruments except for investment in sukuks and equity amounting to SAR 27.29 million (December 31, 2020: SAR 28.42 million) and SAR 8.70 million (December 31, 2020: SAR 16.25 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. Significant unobservable inputs used in the valuation of level 3 investments include the Fund administrator report based on NAV and assumptions about rates for other investments as confirmed by the discretionary portfolio manager. Available-for-sale investment amounting to SAR 1.9 million (December 31, 2020: SAR 1.9 million) is carried at cost as its fair value cannot be measured reliably. | 20 |
| Description of accounting policy for investment income [text block] | 9 Investments NoteJune 30, 2021(Unaudited)December 31,2020(Audited)Fair value through income statement investments (FVIS)9.1164,359162,029Held-to-maturity investment9.28,0003,000Available-for-sale investment9.31,9231,923174,282166,9529.1 Fair value through statement of income investments (FVSI)Movement in FVSI is as follows:Six-month period ended June 30, 2021(Unaudited)Year ended December 31, 2020(Audited)Opening balance162,029110,645Additions during the period / year -50,000Changes in fair value of investments2,3301,384Closing balance 164,359162,029FVSI includes investments managed by a Fund manager under the discretionary portfolio of investments where all such investments are carried at fair value as provided by the Fund manager. Fund manager keeps such investments in various fixed income securities, mutual funds, equity investments, Sukuks and Murabaha placements.9.2 Held to maturity investmentsNoteSix-month period ended June 30, 2021(Unaudited)Year endedDecember 31, 2020(Audited)Saudi Fransi Bank Sukuksa3,0003,000Saudi Real Estate Refinance Company Sukuksb5,000-8,0003,000a)This represents the Company’s investment in Saudi Fransi Tier 1 Sukuks. These represent 3 Sukuks at a face value of SAR 1 million per Sukuk with a coupon rate of 4.50% per annum. These Sukuks have a maturity duration of 5 years commencing from November 3, 2020. The Company has earned commission income of SAR 0.07 million during the period (December 31, 2020: Nil)b)This represents the Company’s investment in Saudi Real Estate Refinance Company Sukuks. These represent 5 Sukuks at a face value of SAR 1 million per Sukuk with a coupon rate of 2.11% per annum. These Sukuks have a maturity duration of 7 years commencing from March 3, 2021.9.3Available-for-sale investmentThis represents the Company’s 3.85% (December 31, 2020: 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 value cannot be ascertained reliably. | 9 |
| Description of accounting policy for segment reporting [text block] | 21 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, 2020. 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 June 30, 2021 and December 31, 2020, its total revenues, expenses, and net income for the three-month and six-month periods ended June 30, 2021 and June 30, 2020, are as follows:MarinePropertyMotorEngineeringAccident & liabilityExtended warrantyTerm lifeTotal Three-monthperiod ended June 30,2021(unaudited)RevenuesGross premiums written9,38939,204121,41112,11619,7156,92417,998226,757Reinsurance premiumsceded (6,584)(32,042)13(10,190)(17,587)(3,967)(10,600)(80,957)Excess of loss expenses(1,211)(3,402) (2,641)(944)---(8,198)Net premiums written1,5943,760118,7839822,1282,9577,398137,602Change in unearned premiums, net1,724(1,826)(10,307)542(132)(2,712)(2,432)(15,143)Net premiums earned3,3181,934108,4761,5241,9962454,966122,459Reinsurance commissions 2,0445,145522,0641,860902(3)12,064Other underwriting income21576217-4125Total revenues5,3837,084108,6043,5903,8731,1474,967134,648Cost and expensesGross claims paid and loss adjustment expenses, net of recoveries1,4435,53987,1293,1396381,7969,284108,968Reinsurer’s share of claims paid(1,152)(4,444)(814)(3,020)(463)(1,796)(7,663)(19,352)Net claims paid2911,09586,315119175-1,62189,616Changes in outstanding claims, net(330)1,699(1,763)304369-164443Changes in claims incurred but not reported, net(54)224775(606)(105)-94328Net claims incurred(93)3,01885,327(183)439-1,87990,387Premium deficiency reserve--(2,249)----(2,249)Additional unexpired risk reserve---328256--584Unallocated loss adjustment expense provision(37)(6)(37)(182)24-(6)(244)Policy acquisition costs1,3593,2347,0921,9091,3437931,38017,110Other underwriting expenses3172123,34024517087154,386Total underwriting cost and expenses1,5466,45893,4732,1172,2328803,268109,974Net underwriting income 3,83762615,1311,4731,6412671,69924,674Other operating income /(expenses)Impairment allowance for doubtful premium, reinsurers and other receivables(6,756)General and administration expenses(26,216)Commission income on deposits339Unrealized gain on investments782Commission income on investments43Other income23Total other operating expenses, net(31,785)Net loss for the period attributable to the shareholders, before zakat and income tax(7,111)Zakat(1,170)Net loss for the period(8,281)MarinePropertyMotorEngineeringAccident & liabilityExtended warrantyTerm lifeTotal Six-month period ended June 30,2021 (unaudited)RevenuesGross premiums written22,636112,722265,25244,35941,55913,10735,545535,180Reinsurance premiumsceded (15,406)(93,688)51(37,098)(35,573)(8,642)(19,813)(210,169)Excess of loss expenses(2,108)(4,324)(4,558)(1,439)---(12,429)Net premiums written5,122 14,710 260,7455,822 5,9864,46515,732312,582Change in unearned premiums, net(175)(10,002)(49,001)(3,143)(2,184)(4,195)(6,279)(74,979)Net premiums earned4,9474,708211,7442,6793,8022709,453237,603Reinsurance commissions 4,12510,0841964,2153,7811,7749824,273Other underwriting income42 14 154 6 29 - 7252Total revenues9,11414,806212,0946,9007,6122,0449,558262,128Cost and expensesGross claims paid and loss adjustment expenses, net of recoveries3,13820,367162,32110,9198793,07820,051220,753Reinsurer’s share of claims paid(2,340)(17,168)(1,932)(10,129)(492)(3,078)(16,455)(51,594)Net claims paid7983,199160,389790387-3,596169,159Changes in outstanding claims, net4002,9647,005(336)114-11210,259Changes in claims incurred but not reported, net(89)243(309)(540)(387)-(689)(1,771)Net claims incurred1,1096,406167,085(86)114-3,019177,647Premium deficiency reserve--(3,206)----(3,206)Additional unexpired risk reserve---736256992Unallocated loss adjustment expense provision117(20)36(336)33-(72)(242)Policy acquisition costs2,4275,97913,7763,3402,5281,4342,53832,022Other underwriting expenses6191,51312,0066325672661515,618Total underwriting cost and expenses4,27213,878189,6974,2863,4981,7005,500222,831Net underwriting income 4,84292822,3972,6144,1143444,05839,297Other operating income / (expenses)Impairment allowance for doubtful premium, reinsurers and other receivables(7,048)General and administration expenses(61,185)Commission income on deposits683Unrealized gain on investments2,330Realized gain on investments77Other income244Total other operating expenses, net(64,899)Net loss for the period attributable to the shareholders, before zakat and income tax(25,602)Zakat(1,970)Net loss for the period(27,572)MarinePropertyMotorEngineeringAccident & liabilityExtended warrantyTerm lifeTotal Three-monthperiod ended June 30,2020 (unaudited) RevenuesGross premiums written7,08914,946120,39636411,5375,26220,100179,694Reinsurance premiumsceded (5,609)(13,257)(3,006)87(10,156)(5,262)(9,307)(46,510)Excess of loss expenses(1,480)(775)(3,775)(300)(90)--(6,420)Net premiums written-914113,6151511,291-10,793126,764Change in unearned premiums, net2,8561,005(26,380)330894-(5,113)(26,408)Net premiums earned2,8561,91987,2354812,185-5,680100,356Reinsurance commissions 3,3524,8473491,9761,93060264813,704Other underwriting income203-24-130Total revenues6,2286,76987,5842,4594,1196026,329114,090Cost and expensesGross claims paid and loss adjustment expenses, net of recoveries3,9652,21731,2161,3021,10795315,42356,183Reinsurer’s share of claims paid(3,264)(2,051)(789)(1,118)(552)(953)(12,511)(21,238)Net claims paid70116630,427184555-2,91234,945Changes in outstanding claims, net(405)1,7095,244(53)(291)-(747)5,457Changes in claims incurred but not reported claims, net(63)1281,581(129)(146)-5231,894Net claims incurred2332,00337,252 2118-2,68842,296Premium deficiency reserve--5,147----5,147Additional unexpired risk reserve---20---20Unallocated loss adjustment expense provision(7)19217 (5)(19)-(44) 161Policy acquisition costs2,3552,7695,9538091,1994352,04515,565Other underwriting expenses226412146029-201Total underwriting cost and expenses2,6034,85548,5818401,3584644,68963,390Net underwriting income3,6251,91439,0031,6192,7611381,64050,700Other operating (expenses) / incomeImpairment allowance for doubtful premium, reinsurers and other receivables(8,961)General and administration expenses(31,793)Commission income on deposits783Unrealized gain on investments984Other income2,465Total other operating expenses, net(36,522)Net income for the period 14,178 Total income attributed to policyholders(1,476)Net income for the period attributable to the shareholders before zakat and income tax12,702Zakat(2,156)Income tax(1,245)Net income for the period9,301MarinePropertyMotorEngineeringAccident & liabilityExtended warrantyTerm lifeTotal Six-monthperiod ended June 30,2020 (unaudited) RevenuesGross premiums written24,63480,248255,34035,64030,05512,37944,166482,462Reinsurance premiumsceded (18,831)(72,693)(6,374)(33,702)(23,548)(12,379)(29,198)(196,725)Excess of loss expenses(2,869)(1,450)(5,125)(600)(180)--(10,224)Net premiums written2,9346,105243,8411,3386,327-14,968275,513Change in unearned premiums, net1,709(2,300)(61,686)(124)(1,843)-(6,567)(70,811)Net premiums earned4,6433,805182,1551,2144,484-8,401204,702Reinsurance commissions 6,5649,0647246,5613,3331,0973,64430,987Other underwriting income4013-617-581Total revenues11,24712,882182,8797,7817,8341,09712,050235,770Cost and expensesGross claims paid and loss adjustment expenses, net of recoveries6,2513,96499,9821,9574,5432,54024,084143,321Reinsurer’s share of claims paid(4,848)(3,680)(2,828)(1,690)(3,669)(2,540)(19,921)(39,176)Net claims paid1,40328497,154267874-4,163104,145Changes in outstanding claims, net(306)1,7209,09221(331)-24510,441Changes in claims incurred but not reported, net(157)1421,512(223)14-6391,927Net claims incurred9402,146107,75865557-5,047116,513Premium deficiency reserve--5,223----5,223Additional unexpired risk reserve---(262)---(262)Unallocated loss adjustment expense provision10253226(5)(12)-(71)293Policy acquisition costs3,9635,13912,6573,5932,1077913,95532,205Other underwriting expenses186618373882191522961,896Total underwriting cost and expenses5,1917,956125,9013,7792,8719439,227155,868Net underwriting income 6,0564,92656,9784,0024,9631542,82379,902Other operating (expenses) / incomeImpairment allowance for doubtful premium, reinsurers and other receivables(10,852)General and administration expenses(66,088)Commission income on deposits1,838Unrealized gain / (loss) on investments(529)Other income2,884Total other operating loss(72,747)Net income for the period7,155Total income attributed to the policy holders(1,153)Net income for the period attributable to the shareholders, before zakat and income tax6,002Zakat(3,356)Income tax(1,245)Net income for the period1,401 MarinePropertyMotorEngineeringAccident & LiabilityExtended warrantyTerm Life TotalAs at June 30, 2021(Unaudited)AssetsReinsurers’ share of unearned premiums6,73767,037-31,81732,36641,77713,834193,568Reinsurers’ share of outstanding claims12,98292,111962380,199110,9331067,543604,836Reinsurers’ share of claims incurred but not reported2,70110,07285919,8819,740-5,99349,246Deferred policy acquisition costs8797,09714,1294,3122,80511,7703,087 44,079Unallocated assets899,776Total assets1,791,505LiabilitiesUnearned premiums9,46580,246235,42336,99836,68645,97224,018468,808Unearned reinsurance commission1,34810,85515,1883,30412,904133,601Outstanding claims15,455100,43175,697383,812112,6541069,051697,206Claims incurred but not reported2,94210,57943,84819,94011,3037,49196,103Premium deficiency reserve--9,760----9,760Additional unexpired risk reserve---939256--1,195Unallocated loss adjustment expense provision4355372,451196571-222 4,412Unallocated liabilities242,428Total liabilities 1,553,513MarinePropertyMotorEngineeringAccident & LiabilityExtended WarrantyTerm Life TotalAs at December 31, 2020 (Audited)AssetsReinsurers’ share of unearned premiums8,73033,8731,28721,16920,11838,5105,684129,371Reinsurers’ share of outstanding claims5,41958,4692,294383,118104,322416,174559,837Reinsurers’ share of claims incurred but not reported2,4478,5902,18822,6948,195-8,74952,863Deferred policy acquisition costs1,0743,64111,8602,8751,9729,7411,13632,299Unallocated assets820,358Total assets1,594,728LiabilitiesUnearned premiums11,28337,080187,70923,20722,25338,5109,590329,632Unearned reinsurance commission2,1336,0942004,9493,41713,48710630,386Outstanding claims7,49363,82470,024387,067105,929417,570641,948Claims incurred but not reported2,7788,85445,48623,29210,144-10,937101,491Premium deficiency reserve--12,966---12,966Additional unexpired risk reserve---203---203Unallocated loss adjustment expense provision3195562,415532538-2944,654Unallocated liabilities207,616Total liabilities 1,328,896 | 21 |
| Description of accounting policy for statutory deposit [text block] | 11Statutory 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 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. | 11 |
| Disclosure of notes forming part of accounts [abstract] | | |
| Disclosure of investments [text block] | 9 Investments NoteJune 30, 2021(Unaudited)December 31,2020(Audited)Fair value through income statement investments (FVIS)9.1164,359162,029Held-to-maturity investment9.28,0003,000Available-for-sale investment9.31,9231,923174,282166,9529.1 Fair value through statement of income investments (FVSI)Movement in FVSI is as follows:Six-month period ended June 30, 2021(Unaudited)Year ended December 31, 2020(Audited)Opening balance162,029110,645Additions during the period / year -50,000Changes in fair value of investments2,3301,384Closing balance 164,359162,029FVSI includes investments managed by a Fund manager under the discretionary portfolio of investments where all such investments are carried at fair value as provided by the Fund manager. Fund manager keeps such investments in various fixed income securities, mutual funds, equity investments, Sukuks and Murabaha placements.9.2 Held to maturity investmentsNoteSix-month period ended June 30, 2021(Unaudited)Year endedDecember 31, 2020(Audited)Saudi Fransi Bank Sukuksa3,0003,000Saudi Real Estate Refinance Company Sukuksb5,000-8,0003,000a)This represents the Company’s investment in Saudi Fransi Tier 1 Sukuks. These represent 3 Sukuks at a face value of SAR 1 million per Sukuk with a coupon rate of 4.50% per annum. These Sukuks have a maturity duration of 5 years commencing from November 3, 2020. The Company has earned commission income of SAR 0.07 million during the period (December 31, 2020: Nil)b)This represents the Company’s investment in Saudi Real Estate Refinance Company Sukuks. These represent 5 Sukuks at a face value of SAR 1 million per Sukuk with a coupon rate of 2.11% per annum. These Sukuks have a maturity duration of 7 years commencing from March 3, 2021.9.3Available-for-sale investmentThis represents the Company’s 3.85% (December 31, 2020: 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 value cannot be ascertained reliably. | 9 |
| Disclosure of investments at fair value through statement of income [text block] | 9.1 Fair value through statement of income investments (FVSI)Movement in FVSI is as follows:Six-month period ended June 30, 2021(Unaudited)Year ended December 31, 2020(Audited)Opening balance162,029110,645Additions during the period / year -50,000Changes in fair value of investments2,3301,384Closing balance 164,359162,029FVSI includes investments managed by a Fund manager under the discretionary portfolio of investments where all such investments are carried at fair value as provided by the Fund manager. Fund manager keeps such investments in various fixed income securities, mutual funds, equity investments, Sukuks and Murabaha placements. | 9.1 |
| Disclosure of due from related parties [text block] | 22Related party balances and transactions 22.1Related party 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 the 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 June 30, 2021(Unaudited)Three-month period ended June 30, 2020 (Unaudited)Six-month period ended June 30, 2021 (Unaudited)Six-month period ended June 30, 2020 (Unaudited)Related PartyNature of TransactionsBoard MembersFees and related expenses752361,5081,265Key management personnelShareholders’ and related parties (common ownership)-Remuneration and related expenses2,8062,7485,7125,580-Loans & advances-250-250-Insurance premiums written14,7476,32432,53521,007-Claims paid3,8272,0706,2234,903-Facultative premiums ceded4296191,3961,725-Facultative commission received175323297-Facultative claim recovered(23)-71208-Expenses incurred1,7981,4893,3512,820-Commission income on deposits2247834551,83822.2Related party balances June 30,2021(Unaudited)December 31, 2020(Audited)Premiums receivable, net8,9246,377Claims payable(3,328)1,041Cash and cash equivalents with a shareholder 68,36480,379Short-term deposits with a shareholder190,000192,250Amounts due to a shareholder for facultative transactions (1,218)(174)Advances due from key management personnel 196627Income tax receivable from foreign shareholders 359359Statutory deposit with a shareholder 20,00020,000Accrued income on statutory deposit1,5491,469Employee benefits payable to key management personnel3,6213,312 | 22 |
| Disclosure of cash and cash equivalents [text block] | 4Cash and cash equivalentsJune 30, 2021(Unaudited)December 31, 2020(Audited)Cash in hand2226Bank balances56,60767,707Deposits maturing within 3 months from the acquisition date13,00013,00069,62980,733Except for balances amounting to SAR 1.24 million (December 31, 2020: SAR 0.33 million), the bank balances and deposits are with a bank which is a related party (see note 22), registered in Saudi Arabia and are denominated in Saudi Riyals and US Dollars. The deposits have an original maturity of less than three months and yield income at rates of 0.4% to 0.6% per annum (December 31, 2020: 0.65% per annum). | 4 |
| Disclosure of statutory deposit [text block] | 11Statutory 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 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. | 11 |
| Disclosure of due to related parties [text block] | 22Related party balances and transactions 22.1Related party 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 the 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 June 30, 2021(Unaudited)Three-month period ended June 30, 2020 (Unaudited)Six-month period ended June 30, 2021 (Unaudited)Six-month period ended June 30, 2020 (Unaudited)Related PartyNature of TransactionsBoard MembersFees and related expenses752361,5081,265Key management personnelShareholders’ and related parties (common ownership)-Remuneration and related expenses2,8062,7485,7125,580-Loans & advances-250-250-Insurance premiums written14,7476,32432,53521,007-Claims paid3,8272,0706,2234,903-Facultative premiums ceded4296191,3961,725-Facultative commission received175323297-Facultative claim recovered(23)-71208-Expenses incurred1,7981,4893,3512,820-Commission income on deposits2247834551,83822.2Related party balances June 30,2021(Unaudited)December 31, 2020(Audited)Premiums receivable, net8,9246,377Claims payable(3,328)1,041Cash and cash equivalents with a shareholder 68,36480,379Short-term deposits with a shareholder190,000192,250Amounts due to a shareholder for facultative transactions (1,218)(174)Advances due from key management personnel 196627Income tax receivable from foreign shareholders 359359Statutory deposit with a shareholder 20,00020,000Accrued income on statutory deposit1,5491,469Employee benefits payable to key management personnel3,6213,312 | 22 |
| Disclosure of zakat [text block] | 13Zakat and income tax13.1 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 Zakat, Tax and Customs Authority (“ZATCA”) could be different from the declaration filed by the Company. 13.2 Provision for zakat and income taxZakatIncome taxTotalJanuary 1, 20215,1131,4916,604Provision for the current period1,970-1,970Payments during the period(5,016)(1,054)(6,070)June 30, 20212,0674372,504ZakatIncome taxTotalJanuary 1, 20204,6691,1845,853Provision for the current year4,9991,4536,452Other adjustments769165934Payments during the year(5,324)(1,311)(6,635)December 31, 20205,1131,4916,604Zakat 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. No provision for income tax has been charged in these interim condensed financial statements as the Company has incurred a taxable loss during the six-month period ended June 30, 2021 (June 30, 2020: SAR 1.25 million).The shareholding percentage subject to zakat and income tax is as follows:June 30, 2021(Unaudited)December 31, 2020 (Audited) % %Zakat share in capital76.2475.33Zakat share in profit76.24 75.34Income tax share in capital23.7624.67Income tax share in profit23.76 24.6613.3Status of assessments The Company has filed its tax returns with ZATCA from inception up to 2020. 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.During 2019, the Company had received an assessment for the 2018 withholding tax liability in which the ZATCA had imposed additional taxes, including penalties, of SAR 11.37 million. Management believes that the assessment raised is without merit and had appealed against this assessment. The Company’s initial appeal was rejected by the ZATCA and was escalated to the General Secretariat of Tax Committee (GSTC) online portal in order to assign the hearing session by the Committee for Resolution of Tax Violations and Disputes (“CRTVD”). On August 05, 2021 the CRTVD issued its summary decision in which they agreed with the ZATCA's revised assessments. The Company is awaiting the official written decision from CRTVD in order to understand the rationale behind the decision. The Company plans to escalate its objection to the Advanced Committee for Tax Violations and Dispute Resolution (ACTVDR) within 30 days from receiving the official written decision. Management of the Company continues to believe that there is a high probability that the majority of this assessment would be waived and hence no additional liability has been recorded against this assessment. | 13 |
| Disclosure of income tax [text block] | 13Zakat and income tax13.1 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 Zakat, Tax and Customs Authority (“ZATCA”) could be different from the declaration filed by the Company. 13.2 Provision for zakat and income taxZakatIncome taxTotalJanuary 1, 20215,1131,4916,604Provision for the current period1,970-1,970Payments during the period(5,016)(1,054)(6,070)June 30, 20212,0674372,504ZakatIncome taxTotalJanuary 1, 20204,6691,1845,853Provision for the current year4,9991,4536,452Other adjustments769165934Payments during the year(5,324)(1,311)(6,635)December 31, 20205,1131,4916,604Zakat 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. No provision for income tax has been charged in these interim condensed financial statements as the Company has incurred a taxable loss during the six-month period ended June 30, 2021 (June 30, 2020: SAR 1.25 million).The shareholding percentage subject to zakat and income tax is as follows:June 30, 2021(Unaudited)December 31, 2020 (Audited) % %Zakat share in capital76.2475.33Zakat share in profit76.24 75.34Income tax share in capital23.7624.67Income tax share in profit23.76 24.6613.3Status of assessments The Company has filed its tax returns with ZATCA from inception up to 2020. 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.During 2019, the Company had received an assessment for the 2018 withholding tax liability in which the ZATCA had imposed additional taxes, including penalties, of SAR 11.37 million. Management believes that the assessment raised is without merit and had appealed against this assessment. The Company’s initial appeal was rejected by the ZATCA and was escalated to the General Secretariat of Tax Committee (GSTC) online portal in order to assign the hearing session by the Committee for Resolution of Tax Violations and Disputes (“CRTVD”). On August 05, 2021 the CRTVD issued its summary decision in which they agreed with the ZATCA's revised assessments. The Company is awaiting the official written decision from CRTVD in order to understand the rationale behind the decision. The Company plans to escalate its objection to the Advanced Committee for Tax Violations and Dispute Resolution (ACTVDR) within 30 days from receiving the official written decision. Management of the Company continues to believe that there is a high probability that the majority of this assessment would be waived and hence no additional liability has been recorded against this assessment. | 13 |
| Disclosure of statutory reserve [text block] | 15Statutory reserveIn compliance with the Insurance Implementing Regulations issued by SAMA, 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. | 15 |
| Disclosure of technical reserve for insurance/takaful/reinsurance/retakaful operations [text block] | 8Technical reserves8.1 Net outstanding claims and reserves Net outstanding claims and reserves comprise of the following:June 30,2021 (Unaudited) December 31,2020(Audited)Outstanding claims697,206641,948Claims incurred but not reported96,103101,491Premium deficiency reserve9,76012,966Additional unexpired risk reserve1,195203Unallocated loss adjustment expense provision4,4124,654808,676761,262Less:Reinsurers’ share of outstanding claims(604,836)(559,837)Reinsurers’ share of claims incurred but not reported(49,246)(52,863)(654,082)(612,700)Net outstanding claims and reserves154,594148,5628.2 Movement in unearned premiumsMovement in unearned premiums comprise of the following:Six-month period ended June 30, 2021(Unaudited)GrossReinsuranceNetBalance at the beginning of the period329,632(129,371)200,261Premium written during the period535,180(222,598)312,582Premium earned during the period(396,004)158,401(237,603)Balance at the end of the period468,808(193,568)275,240Year ended December 31, 2020(Audited)GrossReinsuranceNetBalance at the beginning of the year259,887(104,944)154,943Premium written during the year785,881(322,901)462,980Premium earned during the year(716,136)298,474(417,662)Balance at the end of the year329,632(129,371)200,261 | 8 |
| Disclosure of compensation to key management personnel [text block] | 22Related party balances and transactions 22.1Related party 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 the 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 June 30, 2021(Unaudited)Three-month period ended June 30, 2020 (Unaudited)Six-month period ended June 30, 2021 (Unaudited)Six-month period ended June 30, 2020 (Unaudited)Related PartyNature of TransactionsBoard MembersFees and related expenses752361,5081,265Key management personnelShareholders’ and related parties (common ownership)-Remuneration and related expenses2,8062,7485,7125,580-Loans & advances-250-250-Insurance premiums written14,7476,32432,53521,007-Claims paid3,8272,0706,2234,903-Facultative premiums ceded4296191,3961,725-Facultative commission received175323297-Facultative claim recovered(23)-71208-Expenses incurred1,7981,4893,3512,820-Commission income on deposits2247834551,83822.2Related party balances June 30,2021(Unaudited)December 31, 2020(Audited)Premiums receivable, net8,9246,377Claims payable(3,328)1,041Cash and cash equivalents with a shareholder 68,36480,379Short-term deposits with a shareholder190,000192,250Amounts due to a shareholder for facultative transactions (1,218)(174)Advances due from key management personnel 196627Income tax receivable from foreign shareholders 359359Statutory deposit with a shareholder 20,00020,000Accrued income on statutory deposit1,5491,469Employee benefits payable to key management personnel3,6213,312 | 22 |
| Disclosure of earnings per share [text block] | 14Share capital and earnings per share The authorized, issued and paid up capital of the Company is SAR 200 million divided into 20 million shares of SR 10 each (December 31, 2020: SAR 200 million divided into 20 million shares of SR 10 each).Earnings/(loss) per share for the three-month and six-month periods ended June 30, 2021 and 2020 have been calculated by dividing the net (loss)/income for the respective period attributable leases to the shareholders by the weighted average number of ordinary shares at the reporting date. Diluted (loss)/earnings per share is not applicable to the Company. | 14 |
| Disclosure of investments held at fair value through statement of income [text block] | 9 Investments NoteJune 30, 2021(Unaudited)December 31,2020(Audited)Fair value through income statement investments (FVIS)9.1164,359162,029Held-to-maturity investment9.28,0003,000Available-for-sale investment9.31,9231,923174,282166,9529.1 Fair value through statement of income investments (FVSI)Movement in FVSI is as follows:Six-month period ended June 30, 2021(Unaudited)Year ended December 31, 2020(Audited)Opening balance162,029110,645Additions during the period / year -50,000Changes in fair value of investments2,3301,384Closing balance 164,359162,029FVSI includes investments managed by a Fund manager under the discretionary portfolio of investments where all such investments are carried at fair value as provided by the Fund manager. Fund manager keeps such investments in various fixed income securities, mutual funds, equity investments, Sukuks and Murabaha placements.9.2 Held to maturity investmentsNoteSix-month period ended June 30, 2021(Unaudited)Year endedDecember 31, 2020(Audited)Saudi Fransi Bank Sukuksa3,0003,000Saudi Real Estate Refinance Company Sukuksb5,000-8,0003,000a)This represents the Company’s investment in Saudi Fransi Tier 1 Sukuks. These represent 3 Sukuks at a face value of SAR 1 million per Sukuk with a coupon rate of 4.50% per annum. These Sukuks have a maturity duration of 5 years commencing from November 3, 2020. The Company has earned commission income of SAR 0.07 million during the period (December 31, 2020: Nil)b)This represents the Company’s investment in Saudi Real Estate Refinance Company Sukuks. These represent 5 Sukuks at a face value of SAR 1 million per Sukuk with a coupon rate of 2.11% per annum. These Sukuks have a maturity duration of 7 years commencing from March 3, 2021.9.3Available-for-sale investmentThis represents the Company’s 3.85% (December 31, 2020: 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 value cannot be ascertained reliably. | 9 |
| Disclosure of related party transactions [text block] | 22Related party balances and transactions 22.1Related party 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 the 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 June 30, 2021(Unaudited)Three-month period ended June 30, 2020 (Unaudited)Six-month period ended June 30, 2021 (Unaudited)Six-month period ended June 30, 2020 (Unaudited)Related PartyNature of TransactionsBoard MembersFees and related expenses752361,5081,265Key management personnelShareholders’ and related parties (common ownership)-Remuneration and related expenses2,8062,7485,7125,580-Loans & advances-250-250-Insurance premiums written14,7476,32432,53521,007-Claims paid3,8272,0706,2234,903-Facultative premiums ceded4296191,3961,725-Facultative commission received175323297-Facultative claim recovered(23)-71208-Expenses incurred1,7981,4893,3512,820-Commission income on deposits2247834551,83822.2Related party balances June 30,2021(Unaudited)December 31, 2020(Audited)Premiums receivable, net8,9246,377Claims payable(3,328)1,041Cash and cash equivalents with a shareholder 68,36480,379Short-term deposits with a shareholder190,000192,250Amounts due to a shareholder for facultative transactions (1,218)(174)Advances due from key management personnel 196627Income tax receivable from foreign shareholders 359359Statutory deposit with a shareholder 20,00020,000Accrued income on statutory deposit1,5491,469Employee benefits payable to key management personnel3,6213,312 | 22 |
| Disclosure of entity's operating segments [text block] | 21 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, 2020. 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 June 30, 2021 and December 31, 2020, its total revenues, expenses, and net income for the three-month and six-month periods ended June 30, 2021 and June 30, 2020, are as follows:MarinePropertyMotorEngineeringAccident & liabilityExtended warrantyTerm lifeTotal Three-monthperiod ended June 30,2021(unaudited)RevenuesGross premiums written9,38939,204121,41112,11619,7156,92417,998226,757Reinsurance premiumsceded (6,584)(32,042)13(10,190)(17,587)(3,967)(10,600)(80,957)Excess of loss expenses(1,211)(3,402) (2,641)(944)---(8,198)Net premiums written1,5943,760118,7839822,1282,9577,398137,602Change in unearned premiums, net1,724(1,826)(10,307)542(132)(2,712)(2,432)(15,143)Net premiums earned3,3181,934108,4761,5241,9962454,966122,459Reinsurance commissions 2,0445,145522,0641,860902(3)12,064Other underwriting income21576217-4125Total revenues5,3837,084108,6043,5903,8731,1474,967134,648Cost and expensesGross claims paid and loss adjustment expenses, net of recoveries1,4435,53987,1293,1396381,7969,284108,968Reinsurer’s share of claims paid(1,152)(4,444)(814)(3,020)(463)(1,796)(7,663)(19,352)Net claims paid2911,09586,315119175-1,62189,616Changes in outstanding claims, net(330)1,699(1,763)304369-164443Changes in claims incurred but not reported, net(54)224775(606)(105)-94328Net claims incurred(93)3,01885,327(183)439-1,87990,387Premium deficiency reserve--(2,249)----(2,249)Additional unexpired risk reserve---328256--584Unallocated loss adjustment expense provision(37)(6)(37)(182)24-(6)(244)Policy acquisition costs1,3593,2347,0921,9091,3437931,38017,110Other underwriting expenses3172123,34024517087154,386Total underwriting cost and expenses1,5466,45893,4732,1172,2328803,268109,974Net underwriting income 3,83762615,1311,4731,6412671,69924,674Other operating income /(expenses)Impairment allowance for doubtful premium, reinsurers and other receivables(6,756)General and administration expenses(26,216)Commission income on deposits339Unrealized gain on investments782Commission income on investments43Other income23Total other operating expenses, net(31,785)Net loss for the period attributable to the shareholders, before zakat and income tax(7,111)Zakat(1,170)Net loss for the period(8,281)MarinePropertyMotorEngineeringAccident & liabilityExtended warrantyTerm lifeTotal Six-month period ended June 30,2021 (unaudited)RevenuesGross premiums written22,636112,722265,25244,35941,55913,10735,545535,180Reinsurance premiumsceded (15,406)(93,688)51(37,098)(35,573)(8,642)(19,813)(210,169)Excess of loss expenses(2,108)(4,324)(4,558)(1,439)---(12,429)Net premiums written5,122 14,710 260,7455,822 5,9864,46515,732312,582Change in unearned premiums, net(175)(10,002)(49,001)(3,143)(2,184)(4,195)(6,279)(74,979)Net premiums earned4,9474,708211,7442,6793,8022709,453237,603Reinsurance commissions 4,12510,0841964,2153,7811,7749824,273Other underwriting income42 14 154 6 29 - 7252Total revenues9,11414,806212,0946,9007,6122,0449,558262,128Cost and expensesGross claims paid and loss adjustment expenses, net of recoveries3,13820,367162,32110,9198793,07820,051220,753Reinsurer’s share of claims paid(2,340)(17,168)(1,932)(10,129)(492)(3,078)(16,455)(51,594)Net claims paid7983,199160,389790387-3,596169,159Changes in outstanding claims, net4002,9647,005(336)114-11210,259Changes in claims incurred but not reported, net(89)243(309)(540)(387)-(689)(1,771)Net claims incurred1,1096,406167,085(86)114-3,019177,647Premium deficiency reserve--(3,206)----(3,206)Additional unexpired risk reserve---736256992Unallocated loss adjustment expense provision117(20)36(336)33-(72)(242)Policy acquisition costs2,4275,97913,7763,3402,5281,4342,53832,022Other underwriting expenses6191,51312,0066325672661515,618Total underwriting cost and expenses4,27213,878189,6974,2863,4981,7005,500222,831Net underwriting income 4,84292822,3972,6144,1143444,05839,297Other operating income / (expenses)Impairment allowance for doubtful premium, reinsurers and other receivables(7,048)General and administration expenses(61,185)Commission income on deposits683Unrealized gain on investments2,330Realized gain on investments77Other income244Total other operating expenses, net(64,899)Net loss for the period attributable to the shareholders, before zakat and income tax(25,602)Zakat(1,970)Net loss for the period(27,572)MarinePropertyMotorEngineeringAccident & liabilityExtended warrantyTerm lifeTotal Three-monthperiod ended June 30,2020 (unaudited) RevenuesGross premiums written7,08914,946120,39636411,5375,26220,100179,694Reinsurance premiumsceded (5,609)(13,257)(3,006)87(10,156)(5,262)(9,307)(46,510)Excess of loss expenses(1,480)(775)(3,775)(300)(90)--(6,420)Net premiums written-914113,6151511,291-10,793126,764Change in unearned premiums, net2,8561,005(26,380)330894-(5,113)(26,408)Net premiums earned2,8561,91987,2354812,185-5,680100,356Reinsurance commissions 3,3524,8473491,9761,93060264813,704Other underwriting income203-24-130Total revenues6,2286,76987,5842,4594,1196026,329114,090Cost and expensesGross claims paid and loss adjustment expenses, net of recoveries3,9652,21731,2161,3021,10795315,42356,183Reinsurer’s share of claims paid(3,264)(2,051)(789)(1,118)(552)(953)(12,511)(21,238)Net claims paid70116630,427184555-2,91234,945Changes in outstanding claims, net(405)1,7095,244(53)(291)-(747)5,457Changes in claims incurred but not reported claims, net(63)1281,581(129)(146)-5231,894Net claims incurred2332,00337,252 2118-2,68842,296Premium deficiency reserve--5,147----5,147Additional unexpired risk reserve---20---20Unallocated loss adjustment expense provision(7)19217 (5)(19)-(44) 161Policy acquisition costs2,3552,7695,9538091,1994352,04515,565Other underwriting expenses226412146029-201Total underwriting cost and expenses2,6034,85548,5818401,3584644,68963,390Net underwriting income3,6251,91439,0031,6192,7611381,64050,700Other operating (expenses) / incomeImpairment allowance for doubtful premium, reinsurers and other receivables(8,961)General and administration expenses(31,793)Commission income on deposits783Unrealized gain on investments984Other income2,465Total other operating expenses, net(36,522)Net income for the period 14,178 Total income attributed to policyholders(1,476)Net income for the period attributable to the shareholders before zakat and income tax12,702Zakat(2,156)Income tax(1,245)Net income for the period9,301MarinePropertyMotorEngineeringAccident & liabilityExtended warrantyTerm lifeTotal Six-monthperiod ended June 30,2020 (unaudited) RevenuesGross premiums written24,63480,248255,34035,64030,05512,37944,166482,462Reinsurance premiumsceded (18,831)(72,693)(6,374)(33,702)(23,548)(12,379)(29,198)(196,725)Excess of loss expenses(2,869)(1,450)(5,125)(600)(180)--(10,224)Net premiums written2,9346,105243,8411,3386,327-14,968275,513Change in unearned premiums, net1,709(2,300)(61,686)(124)(1,843)-(6,567)(70,811)Net premiums earned4,6433,805182,1551,2144,484-8,401204,702Reinsurance commissions 6,5649,0647246,5613,3331,0973,64430,987Other underwriting income4013-617-581Total revenues11,24712,882182,8797,7817,8341,09712,050235,770Cost and expensesGross claims paid and loss adjustment expenses, net of recoveries6,2513,96499,9821,9574,5432,54024,084143,321Reinsurer’s share of claims paid(4,848)(3,680)(2,828)(1,690)(3,669)(2,540)(19,921)(39,176)Net claims paid1,40328497,154267874-4,163104,145Changes in outstanding claims, net(306)1,7209,09221(331)-24510,441Changes in claims incurred but not reported, net(157)1421,512(223)14-6391,927Net claims incurred9402,146107,75865557-5,047116,513Premium deficiency reserve--5,223----5,223Additional unexpired risk reserve---(262)---(262)Unallocated loss adjustment expense provision10253226(5)(12)-(71)293Policy acquisition costs3,9635,13912,6573,5932,1077913,95532,205Other underwriting expenses186618373882191522961,896Total underwriting cost and expenses5,1917,956125,9013,7792,8719439,227155,868Net underwriting income 6,0564,92656,9784,0024,9631542,82379,902Other operating (expenses) / incomeImpairment allowance for doubtful premium, reinsurers and other receivables(10,852)General and administration expenses(66,088)Commission income on deposits1,838Unrealized gain / (loss) on investments(529)Other income2,884Total other operating loss(72,747)Net income for the period7,155Total income attributed to the policy holders(1,153)Net income for the period attributable to the shareholders, before zakat and income tax6,002Zakat(3,356)Income tax(1,245)Net income for the period1,401 MarinePropertyMotorEngineeringAccident & LiabilityExtended warrantyTerm Life TotalAs at June 30, 2021(Unaudited)AssetsReinsurers’ share of unearned premiums6,73767,037-31,81732,36641,77713,834193,568Reinsurers’ share of outstanding claims12,98292,111962380,199110,9331067,543604,836Reinsurers’ share of claims incurred but not reported2,70110,07285919,8819,740-5,99349,246Deferred policy acquisition costs8797,09714,1294,3122,80511,7703,087 44,079Unallocated assets899,776Total assets1,791,505LiabilitiesUnearned premiums9,46580,246235,42336,99836,68645,97224,018468,808Unearned reinsurance commission1,34810,85515,1883,30412,904133,601Outstanding claims15,455100,43175,697383,812112,6541069,051697,206Claims incurred but not reported2,94210,57943,84819,94011,3037,49196,103Premium deficiency reserve--9,760----9,760Additional unexpired risk reserve---939256--1,195Unallocated loss adjustment expense provision4355372,451196571-222 4,412Unallocated liabilities242,428Total liabilities 1,553,513MarinePropertyMotorEngineeringAccident & LiabilityExtended WarrantyTerm Life TotalAs at December 31, 2020 (Audited)AssetsReinsurers’ share of unearned premiums8,73033,8731,28721,16920,11838,5105,684129,371Reinsurers’ share of outstanding claims5,41958,4692,294383,118104,322416,174559,837Reinsurers’ share of claims incurred but not reported2,4478,5902,18822,6948,195-8,74952,863Deferred policy acquisition costs1,0743,64111,8602,8751,9729,7411,13632,299Unallocated assets820,358Total assets1,594,728LiabilitiesUnearned premiums11,28337,080187,70923,20722,25338,5109,590329,632Unearned reinsurance commission2,1336,0942004,9493,41713,48710630,386Outstanding claims7,49363,82470,024387,067105,929417,570641,948Claims incurred but not reported2,7788,85445,48623,29210,144-10,937101,491Premium deficiency reserve--12,966---12,966Additional unexpired risk reserve---203---203Unallocated loss adjustment expense provision3195562,415532538-2944,654Unallocated liabilities207,616Total liabilities 1,328,896 | 21 |
| Disclosure of capital management [text block] | 23Capital 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 amounts of dividends paid to shareholders or issue shares.As per guidelines laid out by SAMA in Article 66 of the Implementing Insurance Regulations detailing the solvency margin required to be maintained, the Company shall maintain solvency margin equivalent to the highest of the following three methods as per SAMA Implementing Regulations:Minimum Capital Requirement of SAR 100 millionPremium Solvency MarginClaims Solvency MarginThe Company solvency margin as at 30 June 2021, is below the minimum solvency requirements set by SAMA. Management is at present taking active steps to restore solvency to the minimum level. | 23 |
| Disclosure of commitments and contingencies, general [text block] | 16Commitments and contingencies16.1 The Company’s bankers have issued payment guarantee of SAR 2.41 million (December 31, 2020: SR 2.2 million) to its suppliers on behalf of the Company. 16.2 See note 13.3 for zakat and tax related contingencies.16.3 The Company is a defendant in a case that was filed by a client amounting to SAR 19 million (2020: SAR 19 million). The preliminary decision of the Primary Committee for Resolution of Insurance Disputes and Violations ruled in favor of the Company and dismissed the case brought by the claimant. The Appeal Committee for Settlement of Insurance Disputes and Violations has issued a verdict which cancels the preliminary decision and decided to return the case to the Primary Committee for Resolution of Insurance Disputes and Violations for consideration and review. The Primary Committees for Resolution of Insurance Disputes and Violation rejected the lawsuit filed by the Plaintiff against the Company. However, the Plaintiff has filed an appeal against such decision. Management believes that the case is without merit and has therefore not taken any provisions there against. 16.4 The Company has not discounted any letter of credits issued in its favor by any of its customers as at June 30, 2021 (December 31, 2020: SAR 3.7 million). | 16 |
| Disclosure of comparative figures [text block] | 26 Comparative figuresThe reclassification in comparative interim statement of income for the three month and six-month period ended June 30, 2021 relates to Value Added Tax accrued on reinsurance commission income amounting to SAR 0.20 million and SAR 1.89 million respectively, from the "general and administrative expenses" to "other underwriting expenses”. | 26 |
| Disclosure of board of director's approval of the financial statements [text block] | 27Approval of the interim condensed financial Statements These interim condensed financial statements have been approved by the Board of Directors on August 9, 2021 corresponding to Muharram 1, 1443 H. | 27 |
| Disclosure of other notes relevant to understanding of financial statements [text block] | 25 Impact of COVID-19The World Health Organisation declared the Coronavirus (COVID-19) to be a global pandemic on March 11, 2020, escalating from a declaration of a public health emergency on January 30, 2020. COVID-19 has had unexpected human and economic consequences across many countries and has resulted in significant market volatility. COVID-19 pandemic continues to disrupt global markets as many geographies are beginning to experience a “second / third 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, including start of vaccination process, and has begun taking phased measures to normalize international travel and resume Umrah pilgrimage. 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.Management of the Company is closely monitoring the situation as it evolves which is outlined on the broad dimensions as below: (a)Business impactAs 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.There has been a limited impact on collections and liquidity during the current phase and this is being monitored regularly by management. Overall, product and pricing strategies continue to be on track and hence management does not see any significant changes presently.Based upon the current trends, management has updated its sales forecasts to reflect these for the future. Management will continue to monitor the impact and update the forecasts further considering the situation as it continues to evolve.(b)Impact on claims and reservingMotor technical reservesIn response to the COVID-19 pandemic, SAMA issued a circular 189 (the “circular”) dated May 8, 2020 to all insurance companies in the Kingdom of Saudi Arabia. Amongst other things, the circular instructed insurance companies to extend the period of validity of all existing retail motor insurance policies by further two months as well as providing a two-month additional coverage for all new retail motor policies written within one month of this circular, without any additional consideration from the policyholders.The management, in conjunction with its appointed actuary, deliberated on a variety of internal factors and concluded, that the Company considers the extension of two months in existing motor policies as new policy and recorded a premium deficiency reserve based on the expected claims for the extended 2 months period. The Company has performed a liability adequacy test using current estimates of future cash flows under its insurance contracts at an aggregated level for motor line of business and recorded within Premium deficiency reserve amounting to SAR 9.7 million as at June 30, 2021 (December 31, 2020: SAR 12.96 million).The reserving towards IBNR continues to be consistent with the methodology and techniques applied as at December 31, 2020 and it factors the actual claim experience in the period ended June 30, 2021.(c)Impact on financial assetsIn line with the impact upon the capital markets and interest-rates in the initial period of the pandemic in March 2020, there was some volatility and impact on the investment valuation which has recovered during the year ended December 31, 2020 and period ended June 30, 2021. The determination of fair value considers observable market information, determining whether specific markets are active or inactive, and whether transactions in inactive markets are deemed to be disorderly (i.e. forced or distressed), with none noted for the portfolio of financial assets held by the Company. The Company continued to assess whether there is an objective evidence that a financial asset or a group of financial assets is impaired. During the period ended June 30, 2021, the Company applied the accounting policy for impairment of financial assets consistent with prior year. With respect to insurance and reinsurance receivables, the Company is closely monitoring the credit quality of its customers and reinsurance companies and updating the allowance for impairment whenever there is an objective evidence of credit impairment.Based on these assessments, the Company believes that the COVID-19 pandemic has had no material effect on the Company’s reported results for the three-month and six-month periods ended June 30, 2021. The Company continues to monitor the situation closely.(d)Accounting and financial reportingIn the current phase of COVID-19 pandemic, the Company continues to apply its accounting policies consistently without deviation. Considering the impact on the business is limited, management continues to adopt a consistent approach to the use of estimates in the financial information. As the situation evolves in future, management will continue to monitor and consider updates as appropriate at that timeThe Company continues to maintain a sound liquidity position during this phase. | 25 |
