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Bupa Arabia for Cooperative Insurance Co. announces the interim financial results for the period ending on 31-12-2015 (Twelve Months)

8210
BUPA ARABIA
-0.91 %
1437/04/09     01/05/2016 10:18:47
Element Current quarter Similar quarter for previous year % Change current Previous quarter % Change previous
Net profit (loss) before Zakat
209,327
123,871
68.99
285,774
-26.75
Surplus (deficit) of insurance transactions less returns of policy holders investment (operating transactions results)
216,608
129,998
66.62
330,755
-34.51
Gross written premiums (GWP)
1,099,994
821,384
33.92
2,257,200
-51.27
Net written premiums (NWP)
1,075,879
819,963
31.21
2,251,004
-52.2
Net incurred claims
1,437,009
1,084,704
32.48
1,156,744
24.23
Net profit (loss) of policy holders investment
11,643
5,179
124.81
2,431
378.94
Net profit (loss) of shareholders capital investment
4,010
2,340
71.37
-12,588
-
All figures are in (Thousands) Saudi Arabia, Riyals
Element Current period Similar period for previous year % Change
Net profit (loss) before Zakat
645,077
301,275
114.12
Surplus (deficit) of insurance transactions less returns of policy holders investment (operating transactions results)
704,915
308,425
128.55
Gross written premiums (GWP)
7,328,016
5,740,449
27.66
Net written premiums (NWP)
7,285,552
5,658,642
28.75
Net incurred claims
5,211,046
3,649,005
42.81
Net profit (loss) of policy holders investment
26,261
18,844
39.36
Net profit (loss) of shareholders capital investment
-7,714
10,804
-
Earning or loss per share, Riyals
8.07
3.78
-
All figures are in (Thousands) Saudi Arabia, Riyals
Element EXPLAINATION
Reasons of increase (decrease) for the quarter compared with same quarter last year The improvement in results for the three (3) month period ended 31 December 2015, versus the same period of 2014, was mainly due to strong business growth resulting in higher written and earned premiums driving an improved underwriting result, despite increased claims versus the prior year same period, due to a higher net claims incurred to net earned premium ratio, in the current year three month period. The net underwriting result gains were partially offset by increased growth related operational expenses, such as commissions, levies, staff/infrastructural related expenses, to support the growth, as well as by a higher Cooperative distribution expense. The Cooperative distribution expense was at SR22,825K for 2015 Q4, versus 2014 Q4 at SR13,518K, due to the higher 2015 fourth quarter surplus from insurance operations. Gross Written Premium (GWP) increased by SR278,610K, an increase of 34%, and the net underwriting result for the three month period ended 31 December 2015, versus the same period of 2014, improved by SR57,821K, representing an increase of 18%. The improvement in net earned premium of SR410,126K represented an increase of 29%, versus the same period of 2014. The surplus from Insurance Operations of SR228,251K, is an increase of SR93,074K, versus a surplus of SR135,177K for the same period of 2014, representing an increase of 69%.
Reasons of increase (decrease) for the period compared with same period last year The improvement in results for the twelve (12) month period ended 31st December 2015, versus the same period of 2014, was mainly due to strong business growth resulting in a higher net earned premium and, combined with an improved, lower, net claims incurred to net earned premium ratio (2015 at 77.3% versus 2014 at 79.4%), resulting in a significantly higher net underwriting result. The net underwriting result gains were partially offset by increased growth related operational expenses, such as commissions, levies, bad debt provision expense and other operating expenses, including staff costs, as well as a higher Cooperative distribution expense. Additionally a reduction in investment and other income, of SR23,035K, in part due to the stock market major decline in the third quarter of the current year, versus the same period of the previous year, also partially offset the net underwriting result gains. Gross Written Premium (GWP) increased by SR1,587,567K, an increase of 28%, the Net earned premium increased by SR2,144,323K, an increase of 47%, and the net underwriting result for the twelve month period ended 31st December 2015, versus the same period of 2014, improved by SR582,282K, representing an increase of 62%. The surplus from Insurance Operations of SR731,176K, is an increase of SR403,907K, versus a surplus of SR327,269K for the same period of 2014, representing an increase of 123%. The Cooperative distribution expense was at SR73,118K for 2015, versus 2014 at SR32,727K, an increase of SR40,391K, due to the significantly higher 2015 surplus from Insurance Operations.
Reasons of increase (decrease) for the quarter compared with the previous quarter The deterioration in result in the fourth quarter of 2015, versus the third quarter of 2015, by SR76,537K, a reduction of 27%, was mainly due to the adverse seasonality of claims in the fourth quarter (third quarter lower claims due to the impact of summer) which resulted in an adverse, higher, net claims incurred to net earned premium ratio, in the fourth quarter, of 79.3%, versus the third quarter, of 65.5%. As a result the net underwriting result for the three month period ended 31 December 2015, versus the three month period ended 30 September 2015, deteriorated by SR233,555K, a reduction of 38%. The reduction in net underwriting result was partially offset by bad debt provision expense (fourth quarter collections not impacted by summer), levies (lower written), Cooperative distribution expense (lower insurance operations surplus), and also Investment income all favourable in the fourth quarter versus the third quarter. In the fourth quarter there was a reduction in Gross Written Premium (GWP), of SR1,157,206K, a reduction of 51%, due mainly to the third quarter GWP including major account renewals. The net earned premium for the fourth quarter of 2015 increased, versus the third quarter of 2015, by SR46,710K, representing an increase of 3%.
External auditor's report containing reservation The joint auditors interim review report on the financial statements mentions that the financial statements have been prepared in accordance with International Accounting Standard 34 and not in accordance with the Standard of interim financial reporting issued by SOCPA. However the company assures that there are no significant differences in the results contained within the financial statements due to using International Accounting Standards rather than the SOCPA accounting standards.
Reclassifications in quarterly financial results Some numbers have been re-classified for comparative reasons

The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.

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