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Bupa Arabia for Cooperative Insurance Co. announces its Interim Financial Results for the Period Ending on 2021-09-30 ( Nine Months )

Element ListCurrent QuarterSimilar quarter for previous year%ChangePrevious Quarter% Change
Gross Written Premiums (GWP) 3,458,7843,076,17512.4372,569,71734.597
Net Written Premiums (NWP) 3,446,1733,067,62412.342,552,87334.991
Net Incurred Claims 2,247,3082,180,2823.0742,049,9969.624
Net Profit (Loss) of Policy Holders Investment 19,08730,496-37.41121,935-12.983
Surplus (deficit) of insurance operations minus the revenues of policy holders' investments (operational procedures results) 156,203122,74627.257282,205-44.649
Net Profit (loss) of Shareholders Capital Investment 61,82526,455133.69851,94119.029
Net Profit (Loss) before Zakat 228,277170,06834.226333,612-31.574
Total Comprehensive Income 169,383207,112-18.216357,775-52.656
All figures are in (Thousands) Saudi Arabia, Riyals
Element ListCurrent PeriodSimilar period for previous year%Change
Gross Written Premiums (GWP) 9,281,2838,789,3715.596
Net Written Premiums (NWP) 9,227,2168,752,6385.422
Net Incurred Claims 6,438,8136,298,5452.226
Net Profit (Loss) of Policy Holders Investment 64,65793,740-31.025
Surplus (deficit) of insurance operations minus the revenues of policy holders' investments (operational procedures results) 559,659628,031-10.886
Net Profit (loss) of Shareholders Capital Investment 150,00774,307101.874
Net Profit (Loss) before Zakat 737,306738,782-0.199
Total Comprehensive Income 676,877747,121-9.401
Total Share Holders Equity (after Deducting Minority Equity) 4,187,4323,782,29710.711
Profit (Loss) per Share 5.075.25
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 increase in profits before Zakat and Income Tax for the quarter of SR 58,209K compared with same quarter of the previous year, an increase of 34%, was due to the following main reasons:

• Increase in net underwriting results of SR 22,145K compared with the same quarter of the previous year, an increase of 6.9%. This was driven by an increase in net earned premiums of SR 12,054K from the same quarter of the previous year, an increase of 0.5%, in addition to the drop in policy acquisition costs expensed of SR 77,117K, a decrease of 38.8% from the same quarter of the previous year. 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. This was despite the increase in the net claims incurred by SR 67,026K compared with the same quarter of the previous year, an increase of 3.1%, 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.

• Decrease in the provision for doubtful receivables of SR 33,340K compared with the same quarter of the previous year, a decrease of 79.5%.

• Increase in investment and other income of SR 27,602K compared with the same quarter of the previous year, an increase of 43.5%.

These favorable movements were partially offset by an increase in operating expenses of SR 22,673K compared with the same quarter of the previous year, an increase of 14.4%, as well as an increase in Policyholders’ share of insurance operations’ surplus of 14.4% reaching SR 17,529K in the current quarter versus SR 15,324K in the same quarter of the previous year.

Gross Written Premiums (GWP) grew by SR 382,609K from the same quarter of the previous year, an increase of 12.4%.

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 decrease in profits before Zakat and Income Tax for the quarter of SR 105,335K compared with the previous quarter was due to the following main reasons:

• Decrease in net underwriting results of SR 108,569K compared with the previous quarter, a decrease of 24%. This was driven by an increase in net claims incurred of SR 197,312K, an increase of 9.6%. This was despite the increase in net earned premiums of SR 142,828K compared with the previous quarter, an increase of 5.6%.

• These movements were further offset by an increase in policy acquisition costs reaching SR 121,465K, an increase of 80.3% from the previous quarter, as well as an increase in operating expenses of SR 17,624K, an increase of 10.9% from the previous quarter.

These unfavorable movements were partially offset by the following:

• Decrease in the provision for doubtful receivables of SR 727K compared with the previous quarter, a decrease of 7.8%.

• Increase in investment and other income of SR 7,246K compared with the previous quarter, an increase of 8.7%.

• Decrease in Policyholders share of insurance operations’ reaching SR 17,529K in the current quarter versus SR 30,414K in the previous quarter, a decrease of 42.4%.

Gross Written Premiums (GWP) grew by SR 889,067K in the quarter compared with the previous quarter, an increase of 34.6%.

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 slight decrease in profits before Zakat and Income Tax for the period of SR 1,476K compared with same period of the previous year was due to the following main reasons:

• Decrease in net underwriting results of SR 54,791K compared with the same period of the previous year, a decrease of 4.8%. This was driven by a decrease in net earned premiums by SR 289,912K in the current period compared with the same period of the previous year, a decrease of 3.6%, and the increase in net claims incurred by SR 140,268K compared with the same period of the previous year, an increase of 2.2%. This was despite the drop in deferred acquisition costs expensed of 375,389K compared with the same period of the previous year, a decrease of 60.5%.

• Increase in the operating expenses of SR 24,370K compared with the same period of the previous year, an increase of 5.1%.

• These unfavorable movements were partially offset with the increase in investment and other income by 30%, reaching SR 244,991K in the current period and the decrease in provision for doubtful receivables of SR 11,457K compared to the same period of the previous year, a decrease of 24.7%. Decrease in Policyholders’ share of insurance operations’ surplus to reach SR 62,432K in the current period versus SR 72,177K in the same period of the previous year, a decrease of 13.5%.

Gross Written Premiums (GWP) increased by SR 491,912K in the current period compared with the same period of the previous year, an increase of 5.6%.

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 14,787K compared to SR 20,427K for the same quarter of the previous year, a decrease of 27.6%, and SR 27,041K for the previous quarter, a decrease of 45.3%. Total Shareholders Comprehensive Income for the current quarter is SR 172,125K compared to SR 202,009K for the same quarter of the previous year, a decrease of 14.8%, and SR 361,148K for the previous quarter, a decrease of 52.3%.

The earnings per share (EPS) for the current quarter is SR 1.49 per share versus SR 1.17 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 177,716K over the weighted average number of ordinary outstanding shares of 119,608K for the current quarter and SR 139,618K over 119,446K shares for the same quarter of the previous year.

Total Shareholders’ Equity (no minority interest) as at end of current quarter is SR 4,187 Million versus SR 3,782 Million as at end of same quarter previous year, an increase of 10.7%.

The profits after Zakat and Income Tax for the current quarter reached SR 177,716K compared to SR 139,618K for the same quarter of the previous year, an increase of 27.3%, and SR 287,959K for the previous quarter, a decrease of 38.3%.

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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