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Bupa Arabia for Cooperative Insurance Co. announces its Interim Financial Results for the Period Ending on 2021-06-30 ( Six Months )

Element ListCurrent QuarterSimilar quarter for previous year%ChangePrevious Quarter% Change
Gross Written Premiums (GWP) 2,569,7172,243,21814.5543,252,782-20.999
Net Written Premiums (NWP) 2,552,8732,232,60014.3453,228,171-20.918
Net Incurred Claims 2,049,9961,800,13213.882,141,508-4.273
Net Profit (Loss) of Policy Holders Investment 21,93528,994-24.34623,635-7.192
Surplus (deficit) of insurance operations minus the revenues of policy holders' investments (operational procedures results) 282,205434,381-35.032121,254132.738
Net Profit (loss) of Shareholders Capital Investment 51,94121,297143.88836,24143.321
Net Profit (Loss) before Zakat 333,612443,058-24.702175,41990.18
Total Comprehensive Income 357,775494,136-27.595149,722138.959
All figures are in (Thousands) Saudi Arabia, Riyals
Element ListCurrent PeriodSimilar period for previous year%Change
Gross Written Premiums (GWP) 5,822,4985,713,1961.913
Net Written Premiums (NWP) 5,781,0425,685,0141.689
Net Incurred Claims 4,191,5034,118,2631.778
Net Profit (Loss) of Policy Holders Investment 45,57063,244-27.945
Surplus (deficit) of insurance operations minus the revenues of policy holders' investments (operational procedures results) 403,457505,285-20.152
Net Profit (loss) of Shareholders Capital Investment 88,18247,85284.28
Net Profit (Loss) before Zakat 509,029568,714-10.494
Total Comprehensive Income 507,494540,009-6.021
Total Share Holders Equity (after Deducting Minority Equity) 3,995,7043,575,53811.751
Profit (Loss) per Share 3.584.08
All figures are in (Thousands) Saudi Arabia, Riyals
Element ListExplanation
The reason of the increase (decrease) in the net profit during the current quarter compared to the same quarter of the last year is The decrease in profits before Zakat and Income Tax for the quarter of SR 109,446K compared with same quarter the previous year was due to the following main reasons:

• Decrease in net underwriting results of SR 159,220K compared with the same quarter of the previous year, a decrease of 26.1%. This was driven by the increase in the net claims incurred by SR 249,864K compared with the same quarter of the previous year, an increase of 13.9%, as a result of the rebound in deferred claims from the abnormal low levels witnessed during the COVID-19 lockdown period of the previous year. Net underwriting results were also negatively impacted by the drop in net earned premiums of SR 127,473K compared with the same quarter of the previous year, a decrease of 4.7%. These movements were partially offset by the drop in policy acquisition costs expensed of SR 218,117K compared with the same quarter of the previous year, a decrease of 76.4%. The Premium Deficiency Reserve (PDR), which was established in 2020, required the write-off of certain deferred acquisition costs. This was to offset the expected surge in claims post COVID-19 lockdown and to reserve for the impact of the enforcement of Article 11 of the Cooperative Health Insurance Law.

• Increase in operating expenses of SR 8,661K compared with the same quarter of the previous year, an increase of 5.6%.

These unfavorable movements were partially offset due to the following reasons:

• Decrease in the provision for doubtful receivables of SR 16,707K compared with the same quarter of the previous year, a decrease of 64.1%.

• Increase in investment and other income of SR 25,805K compared with the same quarter of the previous year, an increase of 44.5%.

• Policyholders’ share of insurance operations’ surplus decreased to reach SR 30,414K in the current quarter versus SR 46,337K in the same quarter of the previous year.

Gross Written Premiums (GWP) grew by SR 326,499K from the same quarter of the previous year, an increase of 14.6%.

The reason of the increase (decrease) in the net profit during the current quarter compared to the previous period of the current year is The increase in profits before Zakat and Income Tax for the quarter of SR 158,193K compared with the previous quarter was due to the following main reasons:

• Increase in net underwriting results of SR 152,009K compared with the previous quarter, an increase of 50.7%. This was driven by an increase in net earned premiums of SR 71,209K from the previous quarter, an increase of 2.9%, as well as the drop in net claims incurred of SR 91,512K, a decrease of 4.3%. The favorable movements in underwriting results were partially offset with an increase in policy acquisition costs reaching SR 67,380K, an increase of 18.9% from the previous quarter.

• Increase in Investment and other income of SR 13,532K compared with the previous quarter, an increase of 19.3%.

• Decrease in the provision for doubtful receivables of SR 7,676K compared with the previous quarter, a decrease of 45.1%.

• Policyholders share of insurance operations’ surplus increased to reach SR 30,414K in the current quarter versus SR 14,489K in the previous quarter, an increase of 109.9%.

Gross Written Premiums (GWP) dropped by SR 683,065K in the quarter compared with the previous quarter, a decrease of 21%.

The reason of the increase (decrease) in the net profit during the current period compared to the same period of the last year is The decrease in profits before Zakat and Income Tax for the period of SR 59,685K compared with same period of the previous year was due to the following main reasons:

• Decrease in net underwriting results of SR 76,935K compared with the same period of the previous year, a decrease of 9.3%. This was driven by a decrease in net earned premiums by SR 301,967K in the current period compared with the same period of the previous year, a decrease of 5.6%, and the increase in net claims incurred by SR 73,240K compared with the same period of the previous year, an increase of 1.8%. This was despite the drop in deferred acquisition costs expensed of 298,272K compared with the same period of the previous year, a decrease of 70.6%.

• Increase in the provision for doubtful receivables of SR 21,883K compared to the same period of the previous year, an increase of 488.7%.

• Increase in the operating expenses of SR 1,698K compared with the same period of the previous year, an increase of 0.5%.

These unfavorable movements were partially offset with the increase in investment and other income by 23.1%, reaching SR 153,986K in the current period.

Policyholders’ share of insurance operations’ surplus decreased to reach SR 44,903K in the current period versus SR 56,853K in the same period of the previous year, a decrease of 21%.

Gross Written Premiums (GWP) increased by SR 109,302K in the current period compared with the same period of the previous year, an increase of 1.9%.

Statement of the type of external auditor's report Unmodified opinion
Modification, Qualification or Emphasis of a Matter as Stated within the External Auditor Opinion The external auditors interim review report on the financial statements mentions that the financial statements have been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting” as endorsed in the Kingdom of Saudi Arabia. And other standards and pronouncement issued by Saudi Organization for Certified Public Accountants (“SOCPA”).
Reclassification of Comparison Items Certain comparative figures have been reclassified and regrouped to conform with the current period’s presentation to these interim financial statements.
Additional Information Refer to Note 22 of the interim consolidated financial statements for further information about the impact of both COVID-19 and Article 11 of the Cooperative Health Insurance Law on the company’s operations and financials, including the recognition of a PDR.

Total Insurance Operations Comprehensive Income for the current quarter is SR 27,041K compared to SR 63,270K for the same quarter of the previous year, a decrease of 57.3%, and SR 10,756 K for the previous quarter, an increase of 151.4%. Total Shareholders Comprehensive Income for the current quarter is SR 361,148K compared to SR 477,203K for the same quarter of the previous year, a decrease of 24.3%, and SR 153,455K for the previous quarter, an increase of 135.3%.

The earnings per share (EPS) for the current quarter is SR 2.41 per share versus SR 3.25 per share for the same quarter of the previous year by dividing the net income attributed to shareholders after zakat and income tax amount of SR 287,959K over the weighted average number of ordinary outstanding shares of 119,611K for the current quarter and SR 387,907K over 119,446K shares for the same quarter of the previous year.

Total Shareholder Equity (no minority interest) as at end of current period is SR 3,996 Million versus SR 3,576 Million as at end of same quarter previous year, an increase of 11.8%.

The profits after Zakat and Income Tax for the current quarter reached SR 287,959K compared to SR 387,907K for the same quarter of the previous year, a decrease of 25.8%, and SR 139,903K for the previous quarter, an increase of 105.8%.

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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