bupa middle east limited e
METLIFE, AMERICAN INTERNATIONAL GROUP AND ARAB NATIONAL BANK COOPERATIVE INSURANCE COMPANY (A SAUDI JOINT STOCK COMPANY) INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) AND INDEPENDENT AUDITORS' LIMITED REVIEW REPORT 31 December 2016
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) INTERIM CONDENSED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' LIMITED REVIEW REPORT (UNAUDITED) At 31 December 2016
INDEX Independent auditors’ limited review report Interim statement of financial position
PAGE 1 2-3
Interim statement of insurance operations
4
Interim statement of shareholders’ comprehensive operations
5
Interim statement of changes in shareholders’ equity
6
Interim statement of insurance operations’ cash flows
7
Interim statement of shareholders’ cash flows
8
Notes to the interim condensed financial statements
9 – 24
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) INTERIM STATEMENT OF FINANCIAL POSITION
Notes INSURANCE OPERATIONS' ASSETS Cash and cash equivalents Time deposits Premiums receivable, net Reinsurers’ balances receivable Reinsurers’ share of unearned premiums Reinsurers’ share of mathematical reserves Reinsurers’ share of outstanding claims Deferred policy acquisition costs Due from related parties Prepaid expenses and other assets Due from shareholders operations Property and equipment, net
4 5
1.1
6
TOTAL INSURANCE OPERATIONS' ASSETS SHAREHOLDERS’ ASSETS Cash and cash equivalents Time deposits Held to maturity investment Prepaid expenses and other assets Available for sale investments Statutory deposit Commission on statutory deposit TOTAL SHAREHOLDERS’ ASSETS TOTAL INSURANCE OPERATIONS' AND SHAREHOLDERS’ ASSETS
Managing Director/ Chief Executive Officer
4
7 7
31 December 2016 (Unaudited) SR
31 December 2015 ( Audited) SR
44,784,851 15,000,000 53,391,350 1,249,349 28,592,267 234,842,010 33,804,252 9,083,617 2,195,571 35,261,723 2,904,525 3,776,580 ───────── 464,886,095 ─────────
64,689,241 35,661,423 27,622,732 251,654,626 19,923,644 4,857,863 624,740 13,750,066 8,010,111 5,757,153 ───────── 432,551,599 ─────────
104,001,918 49,000,000 49,457,138 750,301 3,175,163 35,000,000 366,774 ───────── 241,751,294 ─────────
66,314,800 10,000,000 944,930 3,175,163 17,500,000 174,521 ───────── 98,109,414 ─────────
706,637,389 ═════════
530,661,013 ═════════
Chief Financial Officer
The accompanying notes 1 to 13 form an integral part of these interim condensed financial statements. 2
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) INTERIM STATEMENT OF FINANCIAL POSITION (CONTINUED)
Note INSURANCE OPERATIONS’ LIABILITIES Gross unearned premiums Gross outstanding claims Gross mathematical reserves Payables, accruals and others Reinsurance balances payable Unearned reinsurance commission income Due to related parties Employees' terminal benefits
1.1
6
TOTAL INSURANCE OPERATIONS’ LIABILITIES
31 December 2016 (Unaudited) SR
31 December 2015 ( Audited) SR
96,831,054 81,112,229 234,842,010 22,226,258 20,292,935 4,952,097 2,615,731 2,013,781 ───────── 464,886,095 ─────────
92,031,067 39,652,073 251,654,626 12,871,984 29,875,305 3,754,021 1,675,037 1,037,486 ───────── 432,551,599 ─────────
523,658 871,560 366,774 2,904,525 ───────── 4,666,517 ─────────
615,473 733,060 174,521 8,010,111 ───────── 9,533,165 ─────────
350,000,000 (112,915,223) ───────── 237,084,777 ───────── 241,751,294 ─────────
175,000,000 (86,423,751) ───────── 88,576,249 ───────── 98,109,414 ─────────
706,637,389 ═════════
530,661,013 ═════════
SHAREHOLDERS’ LIABILITIES AND EQUITY SHAREHOLDERS’ LIABILITIES Zakat Payables, accruals and others Commission on statutory deposit Due to insurance operations
7
TOTAL SHAREHOLDERS’ LIABILITIES SHAREHOLDERS’ EQUITY Share capital Accumulated deficit TOTAL SHAREHOLDERS’ EQUITY TOTAL SHAREHOLDERS’ LIABILITIES AND EQUITY TOTAL INSURANCE OPERATIONS’ LIABILITIES AND SHAREHOLDERS’ LIABILITIES AND EQUITY
Managing Director/ Chief Executive Officer
8
Chief Financial Officer
The accompanying notes 1 to 13 form an integral part of these interim condensed financial statements. 3
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) INTERIM STATEMENT OF INSURANCE OPERATIONS For the three month period ended 31 December 2016 (Unaudited) SR Gross written premiums Reinsurance premiums ceded Excess of loss premiums NET WRITTEN PREMIUMS Net changes in unearned premiums NET EARNED PREMIUMS Reinsurance commission income Other underwriting income UNDERWRITING REVENUE
Gross claims paid Reinsurers’ share of claims paid NET CLAIMS PAID Net changes in outstanding claims NET CLAIMS INCURRED Commission incurred Inspection and supervisory fees Other direct underwriting expense Reversal of doubtful debt expenses/ doubtful debt expense UNDERWRITING EXPENSES UNDERWRITING RESULTS General and administrative expenses Special commission income NET DEFICIT FOR THE PERIOD FROM INSURANCE OPERATIONS Shareholders’ appropriation from deficit NET RESULT FOR THE PERIOD
Managing Director/ Chief Executive Officer
For the year ended 31 December 2016 (Unaudited) SR
For the three month period ended 31 December 2015 (Unaudited) SR
For the year ended 31 December 2015 (Audited) SR
60,143,735 (10,470,164) (163,171) ───────── 49,510,400
208,090,001 (58,487,360) (678,289) ───────── 148,924,352
33,632,117 (5,176,270) (90,171) ───────── 28,365,676
144,740,920 (47,695,383) (380,483) ───────── 96,665,054
(12,182,479) ───────── 37,327,921
(3,830,454) ───────── 145,093,898
(5,932,016) ───────── 22,433,660
(62,950,291) ───────── 33,714,763
3,027,972 1,961,059 ───────── 42,316,952 ─────────
10,732,808 5,945,810 ───────── 161,772,516 ─────────
1,987,844 874,584 ───────── 25,296,088 ─────────
4,650,695 1,933,163 ───────── 40,298,621 ─────────
(31,233,286) 9,177,165 ───────── (22,056,121)
(127,394,847) 30,962,876 ───────── (96,431,971)
(11,299,748) ───────── (33,355,869)
(27,579,549) ───────── (124,011,520)
(12,971,712) ───────── (21,538,681)
(19,440,698) ───────── (30,964,938)
(5,050,411) (580,161) (541,848)
(15,489,983) (2,319,132) (1,246,730)
(1,336,265) (354,166) (142,569)
(3,284,661) (548,375) (394,863)
589,008 ───────── (38,939,281) ───────── 3,377,671
(2,971,471) ───────── (146,038,836) ───────── 15,733,680
213,834 ───────── (23,157,847) ───────── 2,138,241
(1,232,300) ───────── (36,425,137) ───────── 3,873,484
(11,699,556) 440,241 ─────────
(43,497,187) 1,445,393 ─────────
(10,268,581) 156,164 ─────────
(35,304,973) 156,164 ─────────
(7,881,644) ───────── 7,881,644 ───────── ═════════
(26,318,114) ───────── 26,318,114 ───────── ═════════
(7,974,176) ───────── 7,974,176 ───────── ═════════
(31,275,325) ───────── 31,275,325 ───────── ═════════
(21,568,630) 13,001,661 ───────── (8,566,969)
(41,389,428) 29,865,188 ───────── (11,524,240)
Chief Financial Officer
The accompanying notes 1 to 13 form an integral part of these interim condensed financial statements. 4
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) INTERIM STATEMENT OF SHAREHOLDERS’ COMPREHENSIVE OPERATIONS
Note Appropriation of deficit from insurance operations Special commission income Dividend income General and administrative expenses NET LOSS BEFORE ZAKAT FOR THE PERIOD Zakat TOTAL COMPREHENSIVE LOSS FOR THE PERIOD LOSS PER SHARE: Basic and diluted loss per share restated
9
Managing Director/ Chief Executive Officer
For the three month period ended 31 December 2016 (Unaudited) SR
For the year ended 31 December 2016 (Unaudited) SR
For the three month period ended 31 December 2015 (Unaudited) SR
For the year ended 31 December 2015 (Audited) SR
(7,881,644)
(26,318,114)
(7,974,176)
(31,275,325)
1,848,126
5,490,310
298,511
623,569
-
384,616
-
339,103
(342,010) ─────────
(1,412,047) ─────────
(281,218) ─────────
(1,184,876) ─────────
(6,375,528)
(21,855,235)
(7,956,883)
(31,497,529)
(266,788) ─────────
(390,033) ─────────
(65,703) ─────────
(615,473) ─────────
(6,642,316) ═════════
(22,245,268) ═════════
(8,022,586) ═════════
(32,113,002) ═════════
(0.18) ═════════
(0.64) ═════════
(0.27) ═════════
(1.06) ═════════
Chief Financial Officer
The accompanying notes 1 to 13 form an integral part of these interim condensed financial statements. 5
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
Balance as at 1 January 2016 (Audited) Issue of share capital
Saudi and GCC Shareholders Share Accumulated Capital Deficit SR SR ───────── ───────── 105,000,000 (52,597,508) 105,000,000
Foreign Shareholders Share Accumulated Capital Deficit SR SR ───────── ───────── 70,000,000 (33,826,243) 70,000,000
Total Shareholders Share Accumulated Capital Deficit SR SR ───────── ───────── 175,000,000 (86,423,751) 175,000,000
Total SR ───────── 88,576,249 175,000,000
Transaction costs on issue of share capital
-
(2,547,722)
-
(1,698,482)
-
(4,246,204)
(4,246,204)
Net loss for the period
-
(13,113,141)
-
(8,742,094)
-
(21,855,235)
(21,855,235)
─────────
(390,033) ─────────
─────────
─────────
─────────
(390,033) ─────────
(390,033) ─────────
210,000,000 ═════════
(68,648,404) ═════════
140,000,000 ═════════
(44,266,819) ═════════
350,000,000 ═════════
(112,915,223) ═════════
237,084,777 ═════════
105,000,000
(33,083,518)
70,000,000
(21,227,231)
175,000,000
(54,310,749)
120,689,251
-
(18,898,517)
-
(12,599,012)
-
(31,497,529)
(31,497,529)
───────── 105,000,000 ═════════
(615,473) ───────── (52,597,508) ═════════
───────── 70,000,000 ═════════
───────── (33,826,243) ═════════
───────── 175,000,000 ═════════
(615,473) ───────── (86,423,751) ═════════
(615,473) ───────── 88,576,249 ═════════
Zakat Balance as at 31 December 2016 (Unaudited)
Balance as at 1 January 2015 (Audited) Net loss for the period Zakat Balance as at 31 December 2015 (Audited)
Managing Director/ Chief Executive Officer
Chief Financial Officer
The accompanying notes 1 to 13 form an integral part of these interim condensed financial statements. 6
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) INTERIM STATEMENT OF INSURANCE OPERATIONS’ CASH FLOWS
Note
For the year ended 31 December 2016 SR (Unaudited)
For the year ended 31 December 2015 SR (Audited)
OPERATING ACTIVITIES Net result for the period Adjustments for: Shareholders’ appropriation from deficit Depreciation Special commission income Provision for doubtful receivables Employees’ terminal benefits Changes in operating assets and liabilities: Premiums receivable Reinsurers’ balances receivable Reinsurers’ share of outstanding claims Reinsurers’ share of unearned premiums Reinsurers’ share of mathematical reserves Deferred policy acquisition costs Due from related parties Prepaid expenses and other assets Gross outstanding claims Gross unearned premiums Gross mathematical reserves Payables, accruals and others Reinsurance balances payable Unearned reinsurance commission income Due to related parties Due to/from shareholders’ operations Employees' terminal benefits paid Net cash (used in) / from operating activities INVESTING ACTIVITIES Time Deposits Purchase of property and equipment Special commission income received Net cash used in investing activities NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at the beginning of the period CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
Managing Director/ Chief Executive Officer
4
-
-
(26,318,114) 2,452,342 (1,445,393) 2,971,471 980,519 ────────── (21,359,175)
(31,275,325) 2,734,027 (156,164) 1,232,300 667,249 ────────── (26,797,913)
(20,701,398) (1,249,349) (13,880,608) (969,535) 16,812,616 (4,225,754) (1,570,831) (21,212,172) 41,460,156 4,799,987 (16,812,616) 9,354,274 (9,582,370) 1,198,076 940,694 31,423,700 (4,224) ────────── (5,578,529) ──────────
(33,472,171) (19,423,845) (24,371,633) (251,654,626) (4,388,175) (624,740) (10,626,135) 38,864,543 87,321,925 251,654,626 8,509,100 26,947,592 2,872,549 (147,850) 18,236,556 (12,645) ────────── 62,887,158 ──────────
(15,000,000) (471,769) 1,145,908 ────────── (14,325,861) ────────── (19,904,390)
(436,331) ────────── (436,331) ────────── 62,450,827
64,689,241 ──────────
2,238,414 ──────────
44,784,851 ══════════
64,689,241 ══════════
Chief Financial Officer
The accompanying notes 1 to 13 form an integral part of these interim condensed financial statements. 7
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) INTERIM STATEMENT OF SHAREHOLDERS’ CASH FLOWS
Note
For the year ended 31 December 2016 SR (Unaudited)
For the year ended 31 December 2015 SR (Audited)
OPERATING ACTIVITIES Net loss before Zakat Adjustments for: Appropriation of deficit from insurance operations Special commission income Dividends
Changes in operating assets and liabilities: Statutory deposit Due to/from insurance operations Prepaid expenses and other assets Payables, accruals and others Zakat paid
7
Net cash used in operating activities INVESTING ACTIVITIES Held to Maturity Investment Time deposits Special commission income received Dividends received Net cash (used in) / from investing activities FINANCING ACTIVITIES Issue of share capital Transaction costs on issue of share capital
8 8
Net cash from financing activities NET INCREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at the beginning of the period CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
Managing Director/ Chief Executive Officer
4
(21,855,235)
(31,497,529)
26,318,114 (5,490,310) (384,616) ────────── (1,412,047)
31,275,325 (623,569) (339,103) ────────── (1,184,876)
(17,500,000) (31,423,700) 670,825 138,500 (481,848) ────────── (50,008,270) ──────────
(18,236,556) (749,999) (553,113) ────────── (20,724,544) ──────────
(39,457,138) (49,000,000) 5,014,114 384,616 ────────── (83,058,408) ──────────
(10,000,000) 85,000,000 542,261 339,103 ────────── 75,881,364 ──────────
175,000,000 (4,246,204) ────────── 170,753,796 ────────── 37,687,118
────────── ────────── 55,156,820
66,314,800 ──────────
11,157,980 ──────────
104,001,918 ══════════
66,314,800 ══════════
Chief Financial Officer
The accompanying notes 1 to 13 form an integral part of these interim condensed financial statements. 8
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) For the year ended 31 December 2016 1
ORGANISATION AND PRINCIPAL ACTIVITIES
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (the “Company”) is a Saudi Joint Stock Company registered in the Kingdom of Saudi Arabia under Commercial Registration numbered 1010391438 dated 22 Dhul-Hijjah 1434H (corresponding to 27 October 2013). The address of registered office of the Company is as follows: MetLife, American International Group and Arab National Bank Cooperative Insurance Company P.O. Box 56437 Riyadh 11554 Kingdom of Saudi Arabia. The objective of the Company is to transact cooperative insurance operations and related activities in accordance with the Law on Supervision of Cooperative Insurance Companies and its implementing regulations applicable in the Kingdom of Saudi Arabia. Its principal lines of business include individual and group life, accident and health and all classes of general insurance. The Company’ shares were listed on the Saudi Arabian Stock Exchange (“Tadawul”) on 23 Muharram 1435H (corresponding to 26 November 2013).
1.1
METLIFE ALICO PORTFOLIO TRANSFER
The Company has entered into an agreement with MetLife ALICO (30% shareholder) by which MetLife ALICO has transferred its existing Saudi run-off portfolio to the Company effective 01 April 2015. This portfolio includes long-term life Protection and Savings insurance products and Personal Accident policies. The Company reinsures back to MetLife 100% of this portfolio under a quota-share reinsurance agreement. Accordingly, the Company has become the owner of the transferred policies and MetLife has become the reinsurer of this block of business. The transfer of the portfolio was made at book value with no cash payment. Accordingly, the liabilities related to this portfolio were recorded in the Company’s books at book value with an offsetting assets representing the reinsurance share of these liabilities. MetLife paid to the Company a reinsurance commission amounting to SR 2,643,120 for the year ended 31 December 2016 (SR 2,121,942 for the year ended 31 December 2015) to compensate the cost of capital for this portfolio in addition to reimbursing the Company for all expenses related to the administration of this portfolio by paying an administration fee amounting to SR 1,570,831 for the year ended 31 December 2016 (SR 754,181 for the year ended 31 December 2015) which is booked under “Other underwriting income”. The portfolio transfer has been approved by the Board of Directors on 16 February 2015 and by the shareholders of the Company in their General Assembly meeting on 12 May 2015. Saudi Arabian Monetary Agency (“SAMA”) has also provided their approval on 28/5/1436 H corresponding to 19 March 2015. Assets and liabilities of the transferred portfolio as at 31 December 2016 are shown as below: Assets
Cash and Cash equivalents Reinsurers’ share of unearned premiums Reinsurers’ share of mathematical reserves Reinsurers’ share of outstanding claims Reinsurers’ balances receivable Receivable & other assets Total
Liabilities
31 December 2016 (Unaudited) SR 3,724,653
31 December 2015 (Audited) SR 9,448,346
453,881
725,003
234,842,010
251,654,626
11,126,543
12,515,083
1,249,349 2,612,822
979,088
254,009,258
275,322,146
9
Gross unearned premiums Gross outstanding claims Gross mathematical reserves Reinsurance balances payable Due to shareholders operations Payable and other liabilities Total
31 December 2016 (Unaudited) SR 453,881
31 December 2015 (Audited) SR 725,003
11,126,543
12,515,083
234,842,010
251,654,626
-
7,505,330
7,485,578 101,246
2,871,659 50,445
254,009,258
275,322,146
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 1.2
MANAFETH AGREEMENT WITH TAWUNIYA
The Company participated in the Manafeth agreement between Tawuniya and the majority of the insurance companies in Saudi Arabia effective 01 January 2015 for co-insuring cars entering into Saudi Arabia from all Saudi borders (except the border with AL-Bahrain). Based on this agreement, all insurance companies participating in this coverage will have an equal share of the net result of this portfolio after allowing for all expenses related to managing this portfolio by Tawuniya. This deal is for three years starting from 01 January 2015 and is expected to renew at same terms. The income related to this portfolio is included in the interim statement of insurance operations under “Other underwriting income” and is allocated to Motor Insurance in the segment reporting. 2
BASIS OF PREPARATION
Basis of preparation The interim condensed financial statements have been prepared under the historical cost basis. As required by Saudi Arabian insurance regulations, the Company maintains separate accounts for Insurance Operations and Shareholders’ Operations. The physical custody of all assets related to the Insurance Operations and Shareholders’ Operations are held by the Company. Revenues and expenses clearly attributable to either activity are recorded in the respective accounts. The basis of allocation of other revenue and expenses from joint operations is as determined by the management and Board of Directors. As per the by-laws of the Company, the deficit arising from the Insurance Operations is allocated fully to Shareholders Operations whereas any surplus arising from the Insurance Operations is distributed as follows: Shareholders Policyholders
90% 10% 100%
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”). Accordingly, these interim condensed financial statements are not intended to be a presentation in conformity with the accounting standards generally accepted in the Kingdom of Saudi Arabia, as issued by the Saudi Organization for Certified Public Accountants (“SOCPA”). 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 financial statements of the Company for the year ended 31 December 2015. In management’s opinion, the interim condensed financial statements reflect all adjustments (which include normal recurring adjustments) necessary to present fairly the results of operations for the interim periods presented. The Company’s interim results may not be indicative of its annual results. Functional and presentational currency The functional and presentation currency of the Company is Saudi Riyals. 3
NEW STANDARDS, INTERPRETATIONS AND AMENDMENTS ADOPTED BY THE COMPANY
The accounting policies used in the preparation of these interim condensed financial statements are consistent with those used in the preparation of the Company’s annual financial statements for the year ended 31 December 2015, except for the adoption of new standards and amendments to existing standards effective for the annual period beginning 1 January 2016. The nature and the impact of each new standard / amendment are summarized as follows:
10
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 Annual improvements to IFRS 2010-2012 and 2011-2013 cycle applicable for annual periods beginning on or after 1 July 2014. A summary of the amendments is contained as under: •
IFRS 3 – “business combinations” amended to clarify the classification and measurement of contingent consideration in a business combination. It has been further amended to clarify that the standard does not apply to the accounting for the formation of all types of joint arrangements in IFRS 11.
•
IFRS 8 – “operating segments” has been amended to explicitly require disclosure of judgments made by management in applying aggregation criteria.
•
IFRS 13 has been amended to clarify measurement of interest free short term receivables and payables at their invoiced amount without discounting, if the effect of discounting is immaterial. It has been further amended to clarify that the portfolio exception potentially applies to contracts in the scope of IAS 39 and IFRS 9 regardless of whether they meet the definition of a financial asset or financial liability under IAS 32.
•
IAS 16 – “Property plant and equipment” and IAS 38 – “intangible assets”: – the amendments clarify the requirements of revaluation model recognizing that the restatement of accumulated depreciation (amortisation) is not always proportionate to the change in the gross carrying amount of the asset.
•
IAS 24 – “related party disclosures”– the definition of a related party is extended to include a management entity that provides key management personnel services to the reporting entity, either directly or indirectly.
Standards issued but not yet effective In addition to the above mentioned standards, the following standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective. Further, the Company has chosen not to early adopt the amendments and revisions to the International Financial Reporting Standards which have been published and are mandatory for compliance for the Company with effect from future dates. IFRS 9 Financial Instruments IFRS 9, as issued, reflects the first phase of the IASB’s work though the adoption date is subject to the recently issued Exposure Draft on the replacement of IAS 39 and applies to classification and measurement of financial assets and liabilities as defined in IAS 39. The standard was initially effective for annual periods beginning on or after 1 January 2013, but Amendments to IFRS 9 Mandatory Effective Date of IFRS 9 and Transition Disclosures, issued in December 2011, moved the mandatory effective date to 1 January 2015. However, on 19 November 2013, the IASB issued IFRS 9 Financial Instruments (Hedge Accounting and amendments to IFRS 9) amending IFRS 9 to include the new general hedge accounting model. In its February 2014 meeting, the IASB decided that IFRS 9 would be mandatorily effective for years ending on or after 31 December 2018. IFRS 16 Leases The amended IFRS 16 (Leases) released on January 13, 2016 which changes the set of requirements for the accounting treatment for asset, liability and other complexities such as non-lease element, variable lease period and option periods. The standard is effective from January 01, 2019 with early adoption permitted in certain circumstances.
11
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 4
CASH AND CASH EQUIVALENTS
31 December 2016 (Unaudited) Insurance Shareholders’ operations operations SR SR Cash at banks and in hand Short-term deposit with original maturity of three months or less
31 December 2015 (Audited) Insurance Shareholders’ operations operations SR SR
13,784,851
2,001,918
14,689,241
1,260,553
31,000,000 ───────── 44,784,851 ═════════
102,000,000 ───────── 104,001,918 ═════════
50,000,000 ───────── 64,689,241 ═════════
65,054,247 ───────── 66,314,800 ═════════
Cash at banks are placed with local commercial banks with good investment grade credit ratings.
5
PREMIUMS RECEIVABLE, NET 31 December 2016 (Unaudited) SR
Premiums receivable Provision for doubtful debts Premiums receivable, net
57,685,948 (4,294,598) ───────── 53,391,350 ═════════
12
31 December 2015 (Audited) SR 36,984,550 (1,323,127) ───────── 35,661,423 ═════════
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 6
RELATED PARTY TRANSACTIONS AND BALANCES
Related parties represent major shareholders and key management personnel of the Company. Pricing policies and term of settlements with related parties are as per the commercial terms. The significant related party transactions and the related balances at the end of the year are set out below: Amount of transactions For the For the year ended year ended 31 December 2016 31 December 2015 SR SR (Unaudited) (Audited)
Related party/ Nature of transactions
Premium receivable from / Commission Payable to a related party Arab National Bank (“ANB”) (Shareholder) Premiums receivable on policies sold through agency agreement with ANB agency Commission payable on policies sold through agency agreement with ANB agency Reinsurance balances payable American International Group (“AIG”) (Shareholder) Reinsurance premiums payable & XOL Reinsurance commission Reinsurance share of paid claims Delaware American Life Insurance Company (Owned 100% by MetLife) Reinsurance premiums payable Reinsurance commission Reinsurance share of paid claims Reinsurance balances receivable / (payable) American Life Insurance Company “ALICO” (Owned 100% by MetLife) Reinsurance premiums (portfolio transfer) Reinsurance commission Reinsurance share of claims paid (portfolio transfer)
13
Balance 31 December 2016 SR (Unaudited)
Balance 31 December 2015 SR (Audited)
11,938,623 (1,644,812) ═════════
60,662,974 (1,300,798) ═════════
572,042 (84,857) ═════════
547,723 (53,489) ═════════
15,189,388 (3,664,697) (690,042) ═════════
12,424,079 (2,814,045) (173,277) ═════════
6,768,162 ═════════
9,128,538 ═════════
2,775,607 (434,549) (1,339,336) ═════════
1,831,141 (286,848) (826,104) ═════════
541,001 ═════════
30,585 ═════════
14,799,727 (2,643,120) (27,668,020) ═════════
11,429,627 (2,121,942) (28,865,808) ═════════
1,249,349 ═════════
(7,505,330) ═════════
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 6
RELATED PARTY TRANSACTIONS AND BALANCES (continued) Amount of transactions For the For the year ended year ended 31 December 2016 31 December 2015 SR SR (Unaudited) (Audited)
Related party/ Nature of transactions
Due from related parties MetLife (Shareholder) General and administrative expenses paid on behalf of the Company and recharged to the Company Administration Fees Income (portfolio transfer) Due to related parties American International Group (“AIG”) (Shareholder) General and administrative expenses paid on behalf of the Company and recharged to the Company
14
Balance 31 December 2016 SR (Unaudited)
Balance 31 December 2015 SR (Audited)
1,570,831 ─────────
1,134,576 754,182 ─────────
2,195,571 ─────────
624,740 ─────────
940,695 ─────────
1,255,868 ─────────
2,615,731 ─────────
1,675,037 ─────────
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 6
RELATED PARTY TRANSACTIONS AND BALANCES (continued) Amount of transactions
Related party/ Nature of transactions
Commitments and Contingencies Arab National Bank (“ANB”) (Shareholder) Letters of Guarantee Investment activities Arab National Bank (“ANB”) (Shareholder) Time Deposits Special commission income on deposits Held to Maturity Investment (investment in ANB Sukuk) Special commission income on held to maturity investments Key management personnel Salaries and other benefits Board of Directors and Executive Committees’ fees
15
For the year ended 31 December 2016 SR (Unaudited)
For the year ended 31 December 2015 SR (Audited)
Balance 31 December 2016 SR (Unaudited)
Balance 31 December 2015 SR (Audited)
═════════
═════════
3,473,849 ═════════
3,538,097 ═════════
2,773,745 308,001 ═════════
263,857 70,649 ═════════
53,062,500 35,955 10,000,000 90,759 ═════════
42,062,500 72,695 10,000,000 70,649 ═════════
7,952,484 ═════════ 797,500 ═════════
7,668,858 ═════════ 787,000 ═════════
═════════ 797,500 ═════════
═════════ 718,500 ═════════
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 7
STATUTORY DEPOSIT 31 December 2016 (Unaudited) SR
Statutory Deposit (10% of paid-up share capital)
35,000,000 ───────── 35,000,000 ═════════
31 December 2015 ( Audited) SR 17,500,000 ───────── 17,500,000 ═════════
Statutory deposit represents 10% of the paid up share capital of the Company which is maintained in accordance with the Cooperative Insurance Companies Control Law issued by the Saudi Arabian Monetary Agency (“SAMA”). The Company has increased its capital during March 2016 by SR 175 million through rights issue and accordingly, the Company has increased the Statutory Deposit during March 2016 by additional SR 17.5 million. SAMA is entitled for the income generated on Statutory Deposit which cannot be withdrawn without the consent of SAMA. Commission on Statutory Deposit amounted to SR 366,774 as of 31 December 2016 (SR 174,521 as of 31 December 2015) and was reported separately under Shareholders’ Assets and Shareholders’ Liabilities in accordance with SAMA instructions. 8
SHARE CAPITAL
The authorized, issued and paid-up share capital of the Company is SR 350 million divided into 35 million shares of SAR 10 each (31 December 2015: SR 175 million divided into 17.5 million shares of SR 10 each). The Company held an extraordinary general assembly of its shareholders on 22 February 2016 to approve the increase in the share capital from SAR 175 million to SAR 350 million through rights issue. Based on the approval received from shareholders at the extraordinary general assembly, the Company proceeded successfully in March 2016 to raise SAR 175 million through a rights issue. Under the terms of the rights issue, the Company offered 17,500,000 ordinary new shares by way of rights to qualifying shareholders at an offer price of SR 10 per share at close of trading on the date of 22 February 2016 (the “Eligibility Date”). The rights were made on the ratio of one right for every one share held by shareholders as of the Eligibility Date. Rights issue transaction costs incurred amounting to SR 4,246,204 was charged to the interim statement of changes in shareholders’ equity. 9
BASIC AND DILUTED LOSS PER SHARE - Restated
Basic and diluted loss per share for the period has been calculated by dividing the net loss for the period by the weighted average number of outstanding shares at the period end. The weighted average number of shares has been retrospectively adjusted for all prior periods to reflect the bonus element of the rights issue as required by IAS 33, “Earnings per share” as follows:
Issued ordinary shares at the beginning of the period Adjusted rights issue Effects of rights issue of shares Weighted average number of ordinary shares
For the three month period ended 31 December 2016 SR
For the year ended 31 December 2016 SR
For the three month period ended 31 December 2015 SR
For the year ended 31 December 2015 SR
35,000,000 -
17,500,000 16,424,180 -
17,500,000 12,250,000
17,500,000 12,250,000
35,000,000
33,924,180
29,750,000
29,750,000
16
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 9
BASIC AND DILUTED LOSS PER SHARE - Restated (continued)
The weighted average number of ordinary shares for prior period is computed using an adjustment factor of 1.7, which is a ratio of the theoretical ex-rights of SR 33.52 and the closing price per share of SR 57.04 on 22 February 2016, the last day on which the shares were traded before the rights issue. The basic and diluted earnings per share are as follows: For the three month period ended 31 December 2016 SR Net loss before Zakat for the period Weighted average number of ordinary shares Basic and diluted (loss) per share
10
For the year ended 31 December 2016 SR
For the three month period ended 31 December 2015 SR
For the year ended 31 December 2015 SR
(6,375,528) ───────
(21,855,235) ───────
(7,956,883) ───────
(31,497,529) ───────
35,000,000 ─────── (0.18) ═══════
33,924,180 ─────── (0.64) ═══════
29,750,000 ─────── (0.27) ═══════
29,750,000 ─────── (1.06) ═══════
SEGMENT INFORMATION
Consistent with the Company’s internal reporting process, business segments have been approved by management in respect of the Company’s activities, assets and liabilities as stated below. Segment results do not include general and administration expenses. Segment assets do not include cash and cash equivalents, prepayments and other assets, due from shareholders’ operations and property and equipment. Accordingly they are included in unallocated assets. Segment liabilities do not include part of end-of-service indemnities, accrued expenses and other liabilities and due to related parties. Accordingly they are included in unallocated liabilities. All unallocated assets and liabilities are reported to chief operating decision maker as unallocated assets and liabilities and are monitored on a centralized basis. All of the Company’s operating assets and principal activities are located in the Kingdom of Saudi Arabia.
17
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 10
SEGMENT INFORMATION (Continued) a)
Interim statement of insurance operations For the three month period ended 31 December 2016 (Unaudited)
Gross written premiums Reinsurance premiums ceded Excess of loss premiums Net written premiums Net changes in unearned premiums Net earned premiums Reinsurance commission income Other underwriting income Underwriting revenue
Protection & Savings SR 6,635,845 (4,276,406) (17,453) 2,341,986 648,415 2,990,401 688,282 428,685 4,107,368
Health Insurance SR 43,077,364 (237,293) 42,840,071 (12,366,642) 30,473,429 116,370 30,589,799
Motor Insurance SR 3,384,082 (41,708) 3,342,374 (634,022) 2,708,352 1,313,621 4,021,973
Other General Insurance SR 7,046,444 (5,956,465) (104,010) 985,969 169,770 1,155,739 2,223,320 218,753 3,597,812
Total SR 60,143,735 (10,470,164) (163,171) 49,510,400 (12,182,479) 37,327,921 3,027,972 1,961,059 42,316,952
Gross claims paid Reinsurers' share of claims paid Net claims paid Changes in outstanding claims Net claims incurred Commissions incurred Inspection and supervisory fees Other direct underwriting expense Doubtful debt expense Underwriting expenses
(9,959,000) 8,838,984 (1,120,016) (4,044,495) (5,164,511) (648,778) (36,902) (8,758) (5,858,949)
(19,258,858) 168,802 (19,090,056) (6,215,020) (25,305,076) (2,708,579) (466,283) (331,784) 482,324 (28,329,398)
(1,837,719) (1,837,719) (750,551) (2,588,270) (382,298) (13,746) (14,314) 191,375 (2,807,253)
(177,709) 169,379 (8,330) (289,682) (298,012) (1,310,756) (63,230) (195,750) (75,933) (1,943,681)
(31,233,286) 9,177,165 (22,056,121) (11,299,748) (33,355,869) (5,050,411) (580,161) (541,848) 589,008 (38,939,281)
Underwriting result
(1,751,581)
2,260,401
1,214,720
1,654,131
3,377,671
Unallocated expenses
(11,699,556)
Unallocated special commission income
440,241 (7,881,644)
Net deficit for the period from insurance operations
18
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 For the year ended 31 December 2016 (Unaudited)
Gross written premiums Reinsurance premiums ceded Excess of loss premiums Net written premiums Net changes in unearned premiums Net earned premiums Reinsurance commission income Other underwriting income Underwriting revenue
Protection & Savings SR 24,198,511 (16,781,403) (24,306) 7,392,802 (778,781) 6,614,021 2,944,852 1,570,831 11,129,704
Health Insurance SR 127,311,630 (2,724,727) 124,586,903 2,646,606 127,233,509 496,302 127,729,811
Motor Insurance SR 13,572,220 (258,885) 13,313,335 (5,449,774) 7,863,561 4,156,226 12,019,787
Gross claims paid Reinsurers' share of claims paid Net claims paid Changes in outstanding claims Net claims incurred Commissions incurred Inspection and supervisory fees Other direct underwriting expense Doubtful debt expense Underwriting expenses
(32,888,273) 28,893,037 (3,995,236) (3,868,164) (7,863,400) (1,322,446) (116,899) (71,638) (9,374,383)
(89,514,394) 1,339,336 (88,175,058) (20,310,256) (108,485,314) (8,364,664) (1,953,259) (930,853) (2,248,040) (121,982,130)
(4,249,046) (4,249,046) (3,296,619) (7,545,665) (1,128,273) (40,589) (120,027) (652,558) (9,487,112)
(743,134) 730,503 (12,631) (104,510) (117,141) (4,674,600) (208,385) (195,850) 765 (5,195,211)
(127,394,847) 30,962,876 (96,431,971) (27,579,549) (124,011,520) (15,489,983) (2,319,132) (1,246,730) (2,971,471) (146,038,836)
1,755,321
5,747,681
2,532,675
5,698,003
15,733,680
Underwriting result Unallocated expenses
Other General Insurance SR 43,007,640 (38,981,230) (395,098) 3,631,312 (248,505) 3,382,807 7,291,654 218,753 10,893,214
Total SR 208,090,001 (58,487,360) (678,289) 148,924,352 (3,830,454) 145,093,898 10,732,808 5,945,810 161,772,516
(43,497,187)
Unallocated special commission income
1,445,393 (26,318,114)
Net deficit for the period from insurance operations
19
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 10
SEGMENT INFORMATION (Continued) a)
Interim statement of insurance operations For the three month period ended 31 December 2015 (Unaudited)
Gross written premiums Reinsurance premiums ceded Excess of loss premiums Net written premiums Net changes in unearned premiums Net earned premiums Reinsurance commission income Other underwriting income Underwriting revenue
Protection & Savings SR 2,891,838 (2,912,126) (3,654) (23,942) 1,250,225 1,226,283 1,291,322 289,270 2,806,875
Health Insurance SR 28,056,689 (34,041) 28,022,648 (7,346,641) 20,676,007 78,893 20,754,900
Motor Insurance SR 190,439 (1,684) 188,755 (168,962) 19,793 585,314 605,107
Other General Insurance SR 2,493,151 (2,230,103) (84,833) 178,215 333,362 511,577 617,629 1,129,206
Total SR 33,632,117 (5,176,270) (90,171) 28,365,676 (5,932,016) 22,433,660 1,987,844 874,584 25,296,088
Gross claims paid Reinsurers' share of claims paid Net claims paid Changes in outstanding claims Net claims incurred Commissions incurred Inspection and supervisory fees Other direct underwriting expense Doubtful debt expense Underwriting expenses
(12,780,123) 12,512,520 (267,603) (1,012,289) (1,279,892) (206,084) (21,812) 17,166 (1,490,622)
(8,634,778) 337,419 (8,297,359) (11,470,463) (19,767,822) (711,603) (311,494) (142,569) 200,968 (20,732,520)
(880) (880) (173,114) (173,994) (1,625) (131) (1,292) (177,042)
(152,849) 151,722 (1,127) (315,846) (316,973) (416,953) (20,729) (3,008) (757,663)
(21,568,630) 13,001,661 (8,566,969) (12,971,712) (21,538,681) (1,336,265) (354,166) (142,569) 213,834 (23,157,847)
1,316,253
22,380
428,065
371,543
2,138,241
Underwriting result
(10,268,581)
Unallocated expenses Unallocated special commission income
156,164 (7,974,176)
Net deficit for the period from insurance operations
20
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016
For the year ended 31 December 2015 (Audited)
Gross written premiums Reinsurance premiums ceded Excess of loss premiums Net written premiums Net changes in unearned premiums Net earned premiums Reinsurance commission income Other underwriting income Underwriting revenue
Protection & Savings SR 16,658,472 (11,684,553) (3,654) 4,970,265 (878,973) 4,091,292 2,250,660 754,181 7,096,133
Health Insurance SR 90,989,100 (1,858,145) 89,130,955 (61,259,999) 27,870,956 274,211 28,145,167
Motor Insurance SR 190,439 (1,684) 188,755 (168,962) 19,793 1,178,982 1,198,775
Other General Insurance SR 36,902,909 (34,152,685) (375,145) 2,375,079 (642,357) 1,732,722 2,125,824 3,858,546
Total SR 144,740,920 (47,695,383) (380,483) 96,665,054 (62,950,291) 33,714,763 4,650,695 1,933,163 40,298,621
Gross claims paid Reinsurers' share of claims paid Net claims paid Changes in outstanding claims Net claims incurred Commissions incurred Inspection and supervisory fees Other direct underwriting expense Doubtful debt expense Underwriting expenses
(30,210,371) 28,565,808 (1,644,563) (1,963,533) (3,608,096) (681,090) (78,066) (28,371) (4,395,623)
(10,703,298) 826,104 (9,877,194) (15,876,199) (25,753,393) (1,114,641) (424,604) (367,695) (469,936) (28,130,269)
(880) (880) (173,114) (173,994) (1,625) (131) (1,292) (177,042)
(474,879) 473,276 (1,603) (1,427,852) (1,429,455) (1,487,305) (45,574) (27,168) (732,701) (3,722,203)
(41,389,428) 29,865,188 (11,524,240) (19,440,698) (30,964,938) (3,284,661) (548,375) (394,863) (1,232,300) (36,425,137)
2,700,510
14,898
1,021,733
136,343
3,873,484
Underwriting result
(35,304,973)
Unallocated expenses Unallocated special commission income
156,164 (31,275,325)
Net deficit for the period from insurance operations
21
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 10
SEGMENT INFORMATION (Continued) b)
Insurance operations’ assets and liabilities 31 December 2016 (Unaudited)
Insurance operations’ assets Cash and cash equivalents Premiums receivable, net Reinsurers’ balances receivable Reinsurers' share of unearned premiums Reinsurers’ share of mathematical reserves Reinsurers' share of outstanding claims Deferred policy acquisition costs Due from related parties Prepaid expenses and other assets Time deposits Due from shareholders operations Property and equipment, net TOTAL INSURANCE OPERATIONS' ASSETS Insurance operations’ liabilities Gross unearned premiums Gross outstanding claims Gross mathematical reserves Payables, accruals and others Reinsurance balances payable Unearned reinsurance commission income Due to related parties Employees' terminal benefits TOTAL INSURANCE OPERATIONS’ LIABILITIES
Protection & Savings SR
Health Insurance SR
Motor Insurance SR
Other General Insurance SR
Unallocated SR
624,199 1,249,349
31,000,000 34,600,805 -
5,052,236 -
13,114,110 -
13,784,851 -
44,784,851 53,391,350 1,249,349
206,192
282,253
-
28,103,822
-
28,592,267
234,842,010
-
-
-
-
234,842,010
15,715,914 262,429 32,926 -
852,998 5,132,546 19,574,671 -
763,885 3,430,779 -
17,235,340 2,924,757 377,560 -
2,195,571 11,845,787 15,000,000 2,904,525 3,776,580
33,804,252 9,083,617 2,195,571 35,261,723 15,000,000 2,904,525 3,776,580
252,933,019
91,443,273
9,246,900
61,755,589
49,507,314
464,886,095
1,863,946 21,547,611 234,842,010 1,093,708 1,760,672
59,775,272 37,101,310 11,547,455 793,867
5,618,736 3,469,732 1,027,546 99,295
29,573,100 18,993,576 1,848,298 17,639,101
6,709,251 -
96,831,054 81,112,229 234,842,010 22,226,258 20,292,935
45,489 -
81,114 -
-
4,825,494 -
2,615,731 2,013,781
4,952,097 2,615,731 2,013,781
261,153,436
109,299,018
10,215,309
72,879,569
11,338,763
464,886,095
22
Total SR
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 10
SEGMENT INFORMATION (Continued) b)
Insurance operations’ assets and liabilities 31 December 2015 (Audited)
Insurance operations’ assets Cash and cash equivalents Premiums receivable, net Reinsurers' share of unearned premiums Reinsurers’ share of mathematical reserves Reinsurers' share of outstanding claims Deferred policy acquisition costs Due from related parties Prepaid expenses and other assets Due from shareholders operations Property and equipment, net TOTAL INSURANCE OPERATIONS' ASSETS Insurance operations’ liabilities Gross unearned premiums Gross outstanding claims Gross mathematical reserves Payables, accruals and others Reinsurance balances payable Unearned reinsurance commission income Due to related parties Employees' terminal benefits TOTAL INSURANCE OPERATIONS’ LIABILITIES
Protection & Savings SR
Health Insurance SR
Motor Insurance SR
Other General Insurance SR
Unallocated SR
318,524
50,000,000 17,020,050
85,666
18,237,183
14,689,241 -
64,689,241 35,661,423
178,864
147,265
-
27,296,603
-
27,622,732
251,654,626
-
-
-
-
251,654,626
12,222,662 153,059 17,742 -
300,053 2,320,193 3,603,685 -
13,983 1,180,363 -
7,400,929 2,370,628 251,632 -
624,740 8,696,644 8,010,111 5,757,153
19,923,644 4,857,863 624,740 13,750,066 8,010,111 5,757,153
264,545,477
73,391,246
1,280,012
55,556,975
37,777,889
432,551,599
1,057,837 14,186,195 251,654,626 (7,474) 8,158,119
62,286,890 16,238,108 5,416,566 (50,935)
168,962 173,114 7,010 4,856
28,517,378 9,054,656 1,590,248 21,763,265
5,865,634 -
92,031,067 39,652,073 251,654,626 12,871,984 29,875,305
44,440 -
36,828 -
-
3,672,753 -
1,675,037 1,037,486
3,754,021 1,675,037 1,037,486
275,093,743
83,927,457
353,942
64,598,300
8,578,157
432,551,599
23
Total SR
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 11
COMMITMENTS AND CONTINGENCIES
At 31 December 2016, Letters of Guarantee amounting to SR 3,499,207 were outstanding in favour of medical providers and general insurance tenders (SR 3,538,097 as at 31 December 2015). These letters of guarantee were issued against cash margin amounting to SR 3,499,207 and SR 3,538,097 as at 31 December 2016 and 31 December 2015 respectively which are classified under prepaid expenses and other assets in the interim statement of financial position. There were no other commitments, contingencies, or outstanding legal proceedings or disputes of material nature. 12
COMPARATIVE FIGURES
Certain figures for the prior period have been reclassified to conform to the presentation made in the current period; however the impact of such reclassifications was not material to the overall presentation of the interim financial statements. 13
APPROVAL OF THE INTERIM CONDENSED FINANCIAL STATEMENTS
The interim condensed financial statements have been approved on 18-Rabi Al-Akhar-1438H corresponding to (16January-2017 G).
Managing Director/ Chief Executive Officer
Chief Financial Officer
24
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) INTERIM CONDENSED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' LIMITED REVIEW REPORT (UNAUDITED) At 31 December 2016
INDEX Independent auditors’ limited review report Interim statement of financial position
PAGE 1 2-3
Interim statement of insurance operations
4
Interim statement of shareholders’ comprehensive operations
5
Interim statement of changes in shareholders’ equity
6
Interim statement of insurance operations’ cash flows
7
Interim statement of shareholders’ cash flows
8
Notes to the interim condensed financial statements
9 – 24
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) INTERIM STATEMENT OF FINANCIAL POSITION
Notes INSURANCE OPERATIONS' ASSETS Cash and cash equivalents Time deposits Premiums receivable, net Reinsurers’ balances receivable Reinsurers’ share of unearned premiums Reinsurers’ share of mathematical reserves Reinsurers’ share of outstanding claims Deferred policy acquisition costs Due from related parties Prepaid expenses and other assets Due from shareholders operations Property and equipment, net
4 5
1.1
6
TOTAL INSURANCE OPERATIONS' ASSETS SHAREHOLDERS’ ASSETS Cash and cash equivalents Time deposits Held to maturity investment Prepaid expenses and other assets Available for sale investments Statutory deposit Commission on statutory deposit TOTAL SHAREHOLDERS’ ASSETS TOTAL INSURANCE OPERATIONS' AND SHAREHOLDERS’ ASSETS
Managing Director/ Chief Executive Officer
4
7 7
31 December 2016 (Unaudited) SR
31 December 2015 ( Audited) SR
44,784,851 15,000,000 53,391,350 1,249,349 28,592,267 234,842,010 33,804,252 9,083,617 2,195,571 35,261,723 2,904,525 3,776,580 ───────── 464,886,095 ─────────
64,689,241 35,661,423 27,622,732 251,654,626 19,923,644 4,857,863 624,740 13,750,066 8,010,111 5,757,153 ───────── 432,551,599 ─────────
104,001,918 49,000,000 49,457,138 750,301 3,175,163 35,000,000 366,774 ───────── 241,751,294 ─────────
66,314,800 10,000,000 944,930 3,175,163 17,500,000 174,521 ───────── 98,109,414 ─────────
706,637,389 ═════════
530,661,013 ═════════
Chief Financial Officer
The accompanying notes 1 to 13 form an integral part of these interim condensed financial statements. 2
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) INTERIM STATEMENT OF FINANCIAL POSITION (CONTINUED)
Note INSURANCE OPERATIONS’ LIABILITIES Gross unearned premiums Gross outstanding claims Gross mathematical reserves Payables, accruals and others Reinsurance balances payable Unearned reinsurance commission income Due to related parties Employees' terminal benefits
1.1
6
TOTAL INSURANCE OPERATIONS’ LIABILITIES
31 December 2016 (Unaudited) SR
31 December 2015 ( Audited) SR
96,831,054 81,112,229 234,842,010 22,226,258 20,292,935 4,952,097 2,615,731 2,013,781 ───────── 464,886,095 ─────────
92,031,067 39,652,073 251,654,626 12,871,984 29,875,305 3,754,021 1,675,037 1,037,486 ───────── 432,551,599 ─────────
523,658 871,560 366,774 2,904,525 ───────── 4,666,517 ─────────
615,473 733,060 174,521 8,010,111 ───────── 9,533,165 ─────────
350,000,000 (112,915,223) ───────── 237,084,777 ───────── 241,751,294 ─────────
175,000,000 (86,423,751) ───────── 88,576,249 ───────── 98,109,414 ─────────
706,637,389 ═════════
530,661,013 ═════════
SHAREHOLDERS’ LIABILITIES AND EQUITY SHAREHOLDERS’ LIABILITIES Zakat Payables, accruals and others Commission on statutory deposit Due to insurance operations
7
TOTAL SHAREHOLDERS’ LIABILITIES SHAREHOLDERS’ EQUITY Share capital Accumulated deficit TOTAL SHAREHOLDERS’ EQUITY TOTAL SHAREHOLDERS’ LIABILITIES AND EQUITY TOTAL INSURANCE OPERATIONS’ LIABILITIES AND SHAREHOLDERS’ LIABILITIES AND EQUITY
Managing Director/ Chief Executive Officer
8
Chief Financial Officer
The accompanying notes 1 to 13 form an integral part of these interim condensed financial statements. 3
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) INTERIM STATEMENT OF INSURANCE OPERATIONS For the three month period ended 31 December 2016 (Unaudited) SR Gross written premiums Reinsurance premiums ceded Excess of loss premiums NET WRITTEN PREMIUMS Net changes in unearned premiums NET EARNED PREMIUMS Reinsurance commission income Other underwriting income UNDERWRITING REVENUE
Gross claims paid Reinsurers’ share of claims paid NET CLAIMS PAID Net changes in outstanding claims NET CLAIMS INCURRED Commission incurred Inspection and supervisory fees Other direct underwriting expense Reversal of doubtful debt expenses/ doubtful debt expense UNDERWRITING EXPENSES UNDERWRITING RESULTS General and administrative expenses Special commission income NET DEFICIT FOR THE PERIOD FROM INSURANCE OPERATIONS Shareholders’ appropriation from deficit NET RESULT FOR THE PERIOD
Managing Director/ Chief Executive Officer
For the year ended 31 December 2016 (Unaudited) SR
For the three month period ended 31 December 2015 (Unaudited) SR
For the year ended 31 December 2015 (Audited) SR
60,143,735 (10,470,164) (163,171) ───────── 49,510,400
208,090,001 (58,487,360) (678,289) ───────── 148,924,352
33,632,117 (5,176,270) (90,171) ───────── 28,365,676
144,740,920 (47,695,383) (380,483) ───────── 96,665,054
(12,182,479) ───────── 37,327,921
(3,830,454) ───────── 145,093,898
(5,932,016) ───────── 22,433,660
(62,950,291) ───────── 33,714,763
3,027,972 1,961,059 ───────── 42,316,952 ─────────
10,732,808 5,945,810 ───────── 161,772,516 ─────────
1,987,844 874,584 ───────── 25,296,088 ─────────
4,650,695 1,933,163 ───────── 40,298,621 ─────────
(31,233,286) 9,177,165 ───────── (22,056,121)
(127,394,847) 30,962,876 ───────── (96,431,971)
(11,299,748) ───────── (33,355,869)
(27,579,549) ───────── (124,011,520)
(12,971,712) ───────── (21,538,681)
(19,440,698) ───────── (30,964,938)
(5,050,411) (580,161) (541,848)
(15,489,983) (2,319,132) (1,246,730)
(1,336,265) (354,166) (142,569)
(3,284,661) (548,375) (394,863)
589,008 ───────── (38,939,281) ───────── 3,377,671
(2,971,471) ───────── (146,038,836) ───────── 15,733,680
213,834 ───────── (23,157,847) ───────── 2,138,241
(1,232,300) ───────── (36,425,137) ───────── 3,873,484
(11,699,556) 440,241 ─────────
(43,497,187) 1,445,393 ─────────
(10,268,581) 156,164 ─────────
(35,304,973) 156,164 ─────────
(7,881,644) ───────── 7,881,644 ───────── ═════════
(26,318,114) ───────── 26,318,114 ───────── ═════════
(7,974,176) ───────── 7,974,176 ───────── ═════════
(31,275,325) ───────── 31,275,325 ───────── ═════════
(21,568,630) 13,001,661 ───────── (8,566,969)
(41,389,428) 29,865,188 ───────── (11,524,240)
Chief Financial Officer
The accompanying notes 1 to 13 form an integral part of these interim condensed financial statements. 4
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) INTERIM STATEMENT OF SHAREHOLDERS’ COMPREHENSIVE OPERATIONS
Note Appropriation of deficit from insurance operations Special commission income Dividend income General and administrative expenses NET LOSS BEFORE ZAKAT FOR THE PERIOD Zakat TOTAL COMPREHENSIVE LOSS FOR THE PERIOD LOSS PER SHARE: Basic and diluted loss per share restated
9
Managing Director/ Chief Executive Officer
For the three month period ended 31 December 2016 (Unaudited) SR
For the year ended 31 December 2016 (Unaudited) SR
For the three month period ended 31 December 2015 (Unaudited) SR
For the year ended 31 December 2015 (Audited) SR
(7,881,644)
(26,318,114)
(7,974,176)
(31,275,325)
1,848,126
5,490,310
298,511
623,569
-
384,616
-
339,103
(342,010) ─────────
(1,412,047) ─────────
(281,218) ─────────
(1,184,876) ─────────
(6,375,528)
(21,855,235)
(7,956,883)
(31,497,529)
(266,788) ─────────
(390,033) ─────────
(65,703) ─────────
(615,473) ─────────
(6,642,316) ═════════
(22,245,268) ═════════
(8,022,586) ═════════
(32,113,002) ═════════
(0.18) ═════════
(0.64) ═════════
(0.27) ═════════
(1.06) ═════════
Chief Financial Officer
The accompanying notes 1 to 13 form an integral part of these interim condensed financial statements. 5
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
Balance as at 1 January 2016 (Audited) Issue of share capital
Saudi and GCC Shareholders Share Accumulated Capital Deficit SR SR ───────── ───────── 105,000,000 (52,597,508) 105,000,000
Foreign Shareholders Share Accumulated Capital Deficit SR SR ───────── ───────── 70,000,000 (33,826,243) 70,000,000
Total Shareholders Share Accumulated Capital Deficit SR SR ───────── ───────── 175,000,000 (86,423,751) 175,000,000
Total SR ───────── 88,576,249 175,000,000
Transaction costs on issue of share capital
-
(2,547,722)
-
(1,698,482)
-
(4,246,204)
(4,246,204)
Net loss for the period
-
(13,113,141)
-
(8,742,094)
-
(21,855,235)
(21,855,235)
─────────
(390,033) ─────────
─────────
─────────
─────────
(390,033) ─────────
(390,033) ─────────
210,000,000 ═════════
(68,648,404) ═════════
140,000,000 ═════════
(44,266,819) ═════════
350,000,000 ═════════
(112,915,223) ═════════
237,084,777 ═════════
105,000,000
(33,083,518)
70,000,000
(21,227,231)
175,000,000
(54,310,749)
120,689,251
-
(18,898,517)
-
(12,599,012)
-
(31,497,529)
(31,497,529)
───────── 105,000,000 ═════════
(615,473) ───────── (52,597,508) ═════════
───────── 70,000,000 ═════════
───────── (33,826,243) ═════════
───────── 175,000,000 ═════════
(615,473) ───────── (86,423,751) ═════════
(615,473) ───────── 88,576,249 ═════════
Zakat Balance as at 31 December 2016 (Unaudited)
Balance as at 1 January 2015 (Audited) Net loss for the period Zakat Balance as at 31 December 2015 (Audited)
Managing Director/ Chief Executive Officer
Chief Financial Officer
The accompanying notes 1 to 13 form an integral part of these interim condensed financial statements. 6
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) INTERIM STATEMENT OF INSURANCE OPERATIONS’ CASH FLOWS
Note
For the year ended 31 December 2016 SR (Unaudited)
For the year ended 31 December 2015 SR (Audited)
OPERATING ACTIVITIES Net result for the period Adjustments for: Shareholders’ appropriation from deficit Depreciation Special commission income Provision for doubtful receivables Employees’ terminal benefits Changes in operating assets and liabilities: Premiums receivable Reinsurers’ balances receivable Reinsurers’ share of outstanding claims Reinsurers’ share of unearned premiums Reinsurers’ share of mathematical reserves Deferred policy acquisition costs Due from related parties Prepaid expenses and other assets Gross outstanding claims Gross unearned premiums Gross mathematical reserves Payables, accruals and others Reinsurance balances payable Unearned reinsurance commission income Due to related parties Due to/from shareholders’ operations Employees' terminal benefits paid Net cash (used in) / from operating activities INVESTING ACTIVITIES Time Deposits Purchase of property and equipment Special commission income received Net cash used in investing activities NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at the beginning of the period CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
Managing Director/ Chief Executive Officer
4
-
-
(26,318,114) 2,452,342 (1,445,393) 2,971,471 980,519 ────────── (21,359,175)
(31,275,325) 2,734,027 (156,164) 1,232,300 667,249 ────────── (26,797,913)
(20,701,398) (1,249,349) (13,880,608) (969,535) 16,812,616 (4,225,754) (1,570,831) (21,212,172) 41,460,156 4,799,987 (16,812,616) 9,354,274 (9,582,370) 1,198,076 940,694 31,423,700 (4,224) ────────── (5,578,529) ──────────
(33,472,171) (19,423,845) (24,371,633) (251,654,626) (4,388,175) (624,740) (10,626,135) 38,864,543 87,321,925 251,654,626 8,509,100 26,947,592 2,872,549 (147,850) 18,236,556 (12,645) ────────── 62,887,158 ──────────
(15,000,000) (471,769) 1,145,908 ────────── (14,325,861) ────────── (19,904,390)
(436,331) ────────── (436,331) ────────── 62,450,827
64,689,241 ──────────
2,238,414 ──────────
44,784,851 ══════════
64,689,241 ══════════
Chief Financial Officer
The accompanying notes 1 to 13 form an integral part of these interim condensed financial statements. 7
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) INTERIM STATEMENT OF SHAREHOLDERS’ CASH FLOWS
Note
For the year ended 31 December 2016 SR (Unaudited)
For the year ended 31 December 2015 SR (Audited)
OPERATING ACTIVITIES Net loss before Zakat Adjustments for: Appropriation of deficit from insurance operations Special commission income Dividends
Changes in operating assets and liabilities: Statutory deposit Due to/from insurance operations Prepaid expenses and other assets Payables, accruals and others Zakat paid
7
Net cash used in operating activities INVESTING ACTIVITIES Held to Maturity Investment Time deposits Special commission income received Dividends received Net cash (used in) / from investing activities FINANCING ACTIVITIES Issue of share capital Transaction costs on issue of share capital
8 8
Net cash from financing activities NET INCREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at the beginning of the period CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
Managing Director/ Chief Executive Officer
4
(21,855,235)
(31,497,529)
26,318,114 (5,490,310) (384,616) ────────── (1,412,047)
31,275,325 (623,569) (339,103) ────────── (1,184,876)
(17,500,000) (31,423,700) 670,825 138,500 (481,848) ────────── (50,008,270) ──────────
(18,236,556) (749,999) (553,113) ────────── (20,724,544) ──────────
(39,457,138) (49,000,000) 5,014,114 384,616 ────────── (83,058,408) ──────────
(10,000,000) 85,000,000 542,261 339,103 ────────── 75,881,364 ──────────
175,000,000 (4,246,204) ────────── 170,753,796 ────────── 37,687,118
────────── ────────── 55,156,820
66,314,800 ──────────
11,157,980 ──────────
104,001,918 ══════════
66,314,800 ══════════
Chief Financial Officer
The accompanying notes 1 to 13 form an integral part of these interim condensed financial statements. 8
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) For the year ended 31 December 2016 1
ORGANISATION AND PRINCIPAL ACTIVITIES
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (the “Company”) is a Saudi Joint Stock Company registered in the Kingdom of Saudi Arabia under Commercial Registration numbered 1010391438 dated 22 Dhul-Hijjah 1434H (corresponding to 27 October 2013). The address of registered office of the Company is as follows: MetLife, American International Group and Arab National Bank Cooperative Insurance Company P.O. Box 56437 Riyadh 11554 Kingdom of Saudi Arabia. The objective of the Company is to transact cooperative insurance operations and related activities in accordance with the Law on Supervision of Cooperative Insurance Companies and its implementing regulations applicable in the Kingdom of Saudi Arabia. Its principal lines of business include individual and group life, accident and health and all classes of general insurance. The Company’ shares were listed on the Saudi Arabian Stock Exchange (“Tadawul”) on 23 Muharram 1435H (corresponding to 26 November 2013).
1.1
METLIFE ALICO PORTFOLIO TRANSFER
The Company has entered into an agreement with MetLife ALICO (30% shareholder) by which MetLife ALICO has transferred its existing Saudi run-off portfolio to the Company effective 01 April 2015. This portfolio includes long-term life Protection and Savings insurance products and Personal Accident policies. The Company reinsures back to MetLife 100% of this portfolio under a quota-share reinsurance agreement. Accordingly, the Company has become the owner of the transferred policies and MetLife has become the reinsurer of this block of business. The transfer of the portfolio was made at book value with no cash payment. Accordingly, the liabilities related to this portfolio were recorded in the Company’s books at book value with an offsetting assets representing the reinsurance share of these liabilities. MetLife paid to the Company a reinsurance commission amounting to SR 2,643,120 for the year ended 31 December 2016 (SR 2,121,942 for the year ended 31 December 2015) to compensate the cost of capital for this portfolio in addition to reimbursing the Company for all expenses related to the administration of this portfolio by paying an administration fee amounting to SR 1,570,831 for the year ended 31 December 2016 (SR 754,181 for the year ended 31 December 2015) which is booked under “Other underwriting income”. The portfolio transfer has been approved by the Board of Directors on 16 February 2015 and by the shareholders of the Company in their General Assembly meeting on 12 May 2015. Saudi Arabian Monetary Agency (“SAMA”) has also provided their approval on 28/5/1436 H corresponding to 19 March 2015. Assets and liabilities of the transferred portfolio as at 31 December 2016 are shown as below: Assets
Cash and Cash equivalents Reinsurers’ share of unearned premiums Reinsurers’ share of mathematical reserves Reinsurers’ share of outstanding claims Reinsurers’ balances receivable Receivable & other assets Total
Liabilities
31 December 2016 (Unaudited) SR 3,724,653
31 December 2015 (Audited) SR 9,448,346
453,881
725,003
234,842,010
251,654,626
11,126,543
12,515,083
1,249,349 2,612,822
979,088
254,009,258
275,322,146
9
Gross unearned premiums Gross outstanding claims Gross mathematical reserves Reinsurance balances payable Due to shareholders operations Payable and other liabilities Total
31 December 2016 (Unaudited) SR 453,881
31 December 2015 (Audited) SR 725,003
11,126,543
12,515,083
234,842,010
251,654,626
-
7,505,330
7,485,578 101,246
2,871,659 50,445
254,009,258
275,322,146
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 1.2
MANAFETH AGREEMENT WITH TAWUNIYA
The Company participated in the Manafeth agreement between Tawuniya and the majority of the insurance companies in Saudi Arabia effective 01 January 2015 for co-insuring cars entering into Saudi Arabia from all Saudi borders (except the border with AL-Bahrain). Based on this agreement, all insurance companies participating in this coverage will have an equal share of the net result of this portfolio after allowing for all expenses related to managing this portfolio by Tawuniya. This deal is for three years starting from 01 January 2015 and is expected to renew at same terms. The income related to this portfolio is included in the interim statement of insurance operations under “Other underwriting income” and is allocated to Motor Insurance in the segment reporting. 2
BASIS OF PREPARATION
Basis of preparation The interim condensed financial statements have been prepared under the historical cost basis. As required by Saudi Arabian insurance regulations, the Company maintains separate accounts for Insurance Operations and Shareholders’ Operations. The physical custody of all assets related to the Insurance Operations and Shareholders’ Operations are held by the Company. Revenues and expenses clearly attributable to either activity are recorded in the respective accounts. The basis of allocation of other revenue and expenses from joint operations is as determined by the management and Board of Directors. As per the by-laws of the Company, the deficit arising from the Insurance Operations is allocated fully to Shareholders Operations whereas any surplus arising from the Insurance Operations is distributed as follows: Shareholders Policyholders
90% 10% 100%
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”). Accordingly, these interim condensed financial statements are not intended to be a presentation in conformity with the accounting standards generally accepted in the Kingdom of Saudi Arabia, as issued by the Saudi Organization for Certified Public Accountants (“SOCPA”). 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 financial statements of the Company for the year ended 31 December 2015. In management’s opinion, the interim condensed financial statements reflect all adjustments (which include normal recurring adjustments) necessary to present fairly the results of operations for the interim periods presented. The Company’s interim results may not be indicative of its annual results. Functional and presentational currency The functional and presentation currency of the Company is Saudi Riyals. 3
NEW STANDARDS, INTERPRETATIONS AND AMENDMENTS ADOPTED BY THE COMPANY
The accounting policies used in the preparation of these interim condensed financial statements are consistent with those used in the preparation of the Company’s annual financial statements for the year ended 31 December 2015, except for the adoption of new standards and amendments to existing standards effective for the annual period beginning 1 January 2016. The nature and the impact of each new standard / amendment are summarized as follows:
10
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 Annual improvements to IFRS 2010-2012 and 2011-2013 cycle applicable for annual periods beginning on or after 1 July 2014. A summary of the amendments is contained as under: •
IFRS 3 – “business combinations” amended to clarify the classification and measurement of contingent consideration in a business combination. It has been further amended to clarify that the standard does not apply to the accounting for the formation of all types of joint arrangements in IFRS 11.
•
IFRS 8 – “operating segments” has been amended to explicitly require disclosure of judgments made by management in applying aggregation criteria.
•
IFRS 13 has been amended to clarify measurement of interest free short term receivables and payables at their invoiced amount without discounting, if the effect of discounting is immaterial. It has been further amended to clarify that the portfolio exception potentially applies to contracts in the scope of IAS 39 and IFRS 9 regardless of whether they meet the definition of a financial asset or financial liability under IAS 32.
•
IAS 16 – “Property plant and equipment” and IAS 38 – “intangible assets”: – the amendments clarify the requirements of revaluation model recognizing that the restatement of accumulated depreciation (amortisation) is not always proportionate to the change in the gross carrying amount of the asset.
•
IAS 24 – “related party disclosures”– the definition of a related party is extended to include a management entity that provides key management personnel services to the reporting entity, either directly or indirectly.
Standards issued but not yet effective In addition to the above mentioned standards, the following standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective. Further, the Company has chosen not to early adopt the amendments and revisions to the International Financial Reporting Standards which have been published and are mandatory for compliance for the Company with effect from future dates. IFRS 9 Financial Instruments IFRS 9, as issued, reflects the first phase of the IASB’s work though the adoption date is subject to the recently issued Exposure Draft on the replacement of IAS 39 and applies to classification and measurement of financial assets and liabilities as defined in IAS 39. The standard was initially effective for annual periods beginning on or after 1 January 2013, but Amendments to IFRS 9 Mandatory Effective Date of IFRS 9 and Transition Disclosures, issued in December 2011, moved the mandatory effective date to 1 January 2015. However, on 19 November 2013, the IASB issued IFRS 9 Financial Instruments (Hedge Accounting and amendments to IFRS 9) amending IFRS 9 to include the new general hedge accounting model. In its February 2014 meeting, the IASB decided that IFRS 9 would be mandatorily effective for years ending on or after 31 December 2018. IFRS 16 Leases The amended IFRS 16 (Leases) released on January 13, 2016 which changes the set of requirements for the accounting treatment for asset, liability and other complexities such as non-lease element, variable lease period and option periods. The standard is effective from January 01, 2019 with early adoption permitted in certain circumstances.
11
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 4
CASH AND CASH EQUIVALENTS
31 December 2016 (Unaudited) Insurance Shareholders’ operations operations SR SR Cash at banks and in hand Short-term deposit with original maturity of three months or less
31 December 2015 (Audited) Insurance Shareholders’ operations operations SR SR
13,784,851
2,001,918
14,689,241
1,260,553
31,000,000 ───────── 44,784,851 ═════════
102,000,000 ───────── 104,001,918 ═════════
50,000,000 ───────── 64,689,241 ═════════
65,054,247 ───────── 66,314,800 ═════════
Cash at banks are placed with local commercial banks with good investment grade credit ratings.
5
PREMIUMS RECEIVABLE, NET 31 December 2016 (Unaudited) SR
Premiums receivable Provision for doubtful debts Premiums receivable, net
57,685,948 (4,294,598) ───────── 53,391,350 ═════════
12
31 December 2015 (Audited) SR 36,984,550 (1,323,127) ───────── 35,661,423 ═════════
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 6
RELATED PARTY TRANSACTIONS AND BALANCES
Related parties represent major shareholders and key management personnel of the Company. Pricing policies and term of settlements with related parties are as per the commercial terms. The significant related party transactions and the related balances at the end of the year are set out below: Amount of transactions For the For the year ended year ended 31 December 2016 31 December 2015 SR SR (Unaudited) (Audited)
Related party/ Nature of transactions
Premium receivable from / Commission Payable to a related party Arab National Bank (“ANB”) (Shareholder) Premiums receivable on policies sold through agency agreement with ANB agency Commission payable on policies sold through agency agreement with ANB agency Reinsurance balances payable American International Group (“AIG”) (Shareholder) Reinsurance premiums payable & XOL Reinsurance commission Reinsurance share of paid claims Delaware American Life Insurance Company (Owned 100% by MetLife) Reinsurance premiums payable Reinsurance commission Reinsurance share of paid claims Reinsurance balances receivable / (payable) American Life Insurance Company “ALICO” (Owned 100% by MetLife) Reinsurance premiums (portfolio transfer) Reinsurance commission Reinsurance share of claims paid (portfolio transfer)
13
Balance 31 December 2016 SR (Unaudited)
Balance 31 December 2015 SR (Audited)
11,938,623 (1,644,812) ═════════
60,662,974 (1,300,798) ═════════
572,042 (84,857) ═════════
547,723 (53,489) ═════════
15,189,388 (3,664,697) (690,042) ═════════
12,424,079 (2,814,045) (173,277) ═════════
6,768,162 ═════════
9,128,538 ═════════
2,775,607 (434,549) (1,339,336) ═════════
1,831,141 (286,848) (826,104) ═════════
541,001 ═════════
30,585 ═════════
14,799,727 (2,643,120) (27,668,020) ═════════
11,429,627 (2,121,942) (28,865,808) ═════════
1,249,349 ═════════
(7,505,330) ═════════
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 6
RELATED PARTY TRANSACTIONS AND BALANCES (continued) Amount of transactions For the For the year ended year ended 31 December 2016 31 December 2015 SR SR (Unaudited) (Audited)
Related party/ Nature of transactions
Due from related parties MetLife (Shareholder) General and administrative expenses paid on behalf of the Company and recharged to the Company Administration Fees Income (portfolio transfer) Due to related parties American International Group (“AIG”) (Shareholder) General and administrative expenses paid on behalf of the Company and recharged to the Company
14
Balance 31 December 2016 SR (Unaudited)
Balance 31 December 2015 SR (Audited)
1,570,831 ─────────
1,134,576 754,182 ─────────
2,195,571 ─────────
624,740 ─────────
940,695 ─────────
1,255,868 ─────────
2,615,731 ─────────
1,675,037 ─────────
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 6
RELATED PARTY TRANSACTIONS AND BALANCES (continued) Amount of transactions
Related party/ Nature of transactions
Commitments and Contingencies Arab National Bank (“ANB”) (Shareholder) Letters of Guarantee Investment activities Arab National Bank (“ANB”) (Shareholder) Time Deposits Special commission income on deposits Held to Maturity Investment (investment in ANB Sukuk) Special commission income on held to maturity investments Key management personnel Salaries and other benefits Board of Directors and Executive Committees’ fees
15
For the year ended 31 December 2016 SR (Unaudited)
For the year ended 31 December 2015 SR (Audited)
Balance 31 December 2016 SR (Unaudited)
Balance 31 December 2015 SR (Audited)
═════════
═════════
3,473,849 ═════════
3,538,097 ═════════
2,773,745 308,001 ═════════
263,857 70,649 ═════════
53,062,500 35,955 10,000,000 90,759 ═════════
42,062,500 72,695 10,000,000 70,649 ═════════
7,952,484 ═════════ 797,500 ═════════
7,668,858 ═════════ 787,000 ═════════
═════════ 797,500 ═════════
═════════ 718,500 ═════════
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 7
STATUTORY DEPOSIT 31 December 2016 (Unaudited) SR
Statutory Deposit (10% of paid-up share capital)
35,000,000 ───────── 35,000,000 ═════════
31 December 2015 ( Audited) SR 17,500,000 ───────── 17,500,000 ═════════
Statutory deposit represents 10% of the paid up share capital of the Company which is maintained in accordance with the Cooperative Insurance Companies Control Law issued by the Saudi Arabian Monetary Agency (“SAMA”). The Company has increased its capital during March 2016 by SR 175 million through rights issue and accordingly, the Company has increased the Statutory Deposit during March 2016 by additional SR 17.5 million. SAMA is entitled for the income generated on Statutory Deposit which cannot be withdrawn without the consent of SAMA. Commission on Statutory Deposit amounted to SR 366,774 as of 31 December 2016 (SR 174,521 as of 31 December 2015) and was reported separately under Shareholders’ Assets and Shareholders’ Liabilities in accordance with SAMA instructions. 8
SHARE CAPITAL
The authorized, issued and paid-up share capital of the Company is SR 350 million divided into 35 million shares of SAR 10 each (31 December 2015: SR 175 million divided into 17.5 million shares of SR 10 each). The Company held an extraordinary general assembly of its shareholders on 22 February 2016 to approve the increase in the share capital from SAR 175 million to SAR 350 million through rights issue. Based on the approval received from shareholders at the extraordinary general assembly, the Company proceeded successfully in March 2016 to raise SAR 175 million through a rights issue. Under the terms of the rights issue, the Company offered 17,500,000 ordinary new shares by way of rights to qualifying shareholders at an offer price of SR 10 per share at close of trading on the date of 22 February 2016 (the “Eligibility Date”). The rights were made on the ratio of one right for every one share held by shareholders as of the Eligibility Date. Rights issue transaction costs incurred amounting to SR 4,246,204 was charged to the interim statement of changes in shareholders’ equity. 9
BASIC AND DILUTED LOSS PER SHARE - Restated
Basic and diluted loss per share for the period has been calculated by dividing the net loss for the period by the weighted average number of outstanding shares at the period end. The weighted average number of shares has been retrospectively adjusted for all prior periods to reflect the bonus element of the rights issue as required by IAS 33, “Earnings per share” as follows:
Issued ordinary shares at the beginning of the period Adjusted rights issue Effects of rights issue of shares Weighted average number of ordinary shares
For the three month period ended 31 December 2016 SR
For the year ended 31 December 2016 SR
For the three month period ended 31 December 2015 SR
For the year ended 31 December 2015 SR
35,000,000 -
17,500,000 16,424,180 -
17,500,000 12,250,000
17,500,000 12,250,000
35,000,000
33,924,180
29,750,000
29,750,000
16
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 9
BASIC AND DILUTED LOSS PER SHARE - Restated (continued)
The weighted average number of ordinary shares for prior period is computed using an adjustment factor of 1.7, which is a ratio of the theoretical ex-rights of SR 33.52 and the closing price per share of SR 57.04 on 22 February 2016, the last day on which the shares were traded before the rights issue. The basic and diluted earnings per share are as follows: For the three month period ended 31 December 2016 SR Net loss before Zakat for the period Weighted average number of ordinary shares Basic and diluted (loss) per share
10
For the year ended 31 December 2016 SR
For the three month period ended 31 December 2015 SR
For the year ended 31 December 2015 SR
(6,375,528) ───────
(21,855,235) ───────
(7,956,883) ───────
(31,497,529) ───────
35,000,000 ─────── (0.18) ═══════
33,924,180 ─────── (0.64) ═══════
29,750,000 ─────── (0.27) ═══════
29,750,000 ─────── (1.06) ═══════
SEGMENT INFORMATION
Consistent with the Company’s internal reporting process, business segments have been approved by management in respect of the Company’s activities, assets and liabilities as stated below. Segment results do not include general and administration expenses. Segment assets do not include cash and cash equivalents, prepayments and other assets, due from shareholders’ operations and property and equipment. Accordingly they are included in unallocated assets. Segment liabilities do not include part of end-of-service indemnities, accrued expenses and other liabilities and due to related parties. Accordingly they are included in unallocated liabilities. All unallocated assets and liabilities are reported to chief operating decision maker as unallocated assets and liabilities and are monitored on a centralized basis. All of the Company’s operating assets and principal activities are located in the Kingdom of Saudi Arabia.
17
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 10
SEGMENT INFORMATION (Continued) a)
Interim statement of insurance operations For the three month period ended 31 December 2016 (Unaudited)
Gross written premiums Reinsurance premiums ceded Excess of loss premiums Net written premiums Net changes in unearned premiums Net earned premiums Reinsurance commission income Other underwriting income Underwriting revenue
Protection & Savings SR 6,635,845 (4,276,406) (17,453) 2,341,986 648,415 2,990,401 688,282 428,685 4,107,368
Health Insurance SR 43,077,364 (237,293) 42,840,071 (12,366,642) 30,473,429 116,370 30,589,799
Motor Insurance SR 3,384,082 (41,708) 3,342,374 (634,022) 2,708,352 1,313,621 4,021,973
Other General Insurance SR 7,046,444 (5,956,465) (104,010) 985,969 169,770 1,155,739 2,223,320 218,753 3,597,812
Total SR 60,143,735 (10,470,164) (163,171) 49,510,400 (12,182,479) 37,327,921 3,027,972 1,961,059 42,316,952
Gross claims paid Reinsurers' share of claims paid Net claims paid Changes in outstanding claims Net claims incurred Commissions incurred Inspection and supervisory fees Other direct underwriting expense Doubtful debt expense Underwriting expenses
(9,959,000) 8,838,984 (1,120,016) (4,044,495) (5,164,511) (648,778) (36,902) (8,758) (5,858,949)
(19,258,858) 168,802 (19,090,056) (6,215,020) (25,305,076) (2,708,579) (466,283) (331,784) 482,324 (28,329,398)
(1,837,719) (1,837,719) (750,551) (2,588,270) (382,298) (13,746) (14,314) 191,375 (2,807,253)
(177,709) 169,379 (8,330) (289,682) (298,012) (1,310,756) (63,230) (195,750) (75,933) (1,943,681)
(31,233,286) 9,177,165 (22,056,121) (11,299,748) (33,355,869) (5,050,411) (580,161) (541,848) 589,008 (38,939,281)
Underwriting result
(1,751,581)
2,260,401
1,214,720
1,654,131
3,377,671
Unallocated expenses
(11,699,556)
Unallocated special commission income
440,241 (7,881,644)
Net deficit for the period from insurance operations
18
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 For the year ended 31 December 2016 (Unaudited)
Gross written premiums Reinsurance premiums ceded Excess of loss premiums Net written premiums Net changes in unearned premiums Net earned premiums Reinsurance commission income Other underwriting income Underwriting revenue
Protection & Savings SR 24,198,511 (16,781,403) (24,306) 7,392,802 (778,781) 6,614,021 2,944,852 1,570,831 11,129,704
Health Insurance SR 127,311,630 (2,724,727) 124,586,903 2,646,606 127,233,509 496,302 127,729,811
Motor Insurance SR 13,572,220 (258,885) 13,313,335 (5,449,774) 7,863,561 4,156,226 12,019,787
Gross claims paid Reinsurers' share of claims paid Net claims paid Changes in outstanding claims Net claims incurred Commissions incurred Inspection and supervisory fees Other direct underwriting expense Doubtful debt expense Underwriting expenses
(32,888,273) 28,893,037 (3,995,236) (3,868,164) (7,863,400) (1,322,446) (116,899) (71,638) (9,374,383)
(89,514,394) 1,339,336 (88,175,058) (20,310,256) (108,485,314) (8,364,664) (1,953,259) (930,853) (2,248,040) (121,982,130)
(4,249,046) (4,249,046) (3,296,619) (7,545,665) (1,128,273) (40,589) (120,027) (652,558) (9,487,112)
(743,134) 730,503 (12,631) (104,510) (117,141) (4,674,600) (208,385) (195,850) 765 (5,195,211)
(127,394,847) 30,962,876 (96,431,971) (27,579,549) (124,011,520) (15,489,983) (2,319,132) (1,246,730) (2,971,471) (146,038,836)
1,755,321
5,747,681
2,532,675
5,698,003
15,733,680
Underwriting result Unallocated expenses
Other General Insurance SR 43,007,640 (38,981,230) (395,098) 3,631,312 (248,505) 3,382,807 7,291,654 218,753 10,893,214
Total SR 208,090,001 (58,487,360) (678,289) 148,924,352 (3,830,454) 145,093,898 10,732,808 5,945,810 161,772,516
(43,497,187)
Unallocated special commission income
1,445,393 (26,318,114)
Net deficit for the period from insurance operations
19
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 10
SEGMENT INFORMATION (Continued) a)
Interim statement of insurance operations For the three month period ended 31 December 2015 (Unaudited)
Gross written premiums Reinsurance premiums ceded Excess of loss premiums Net written premiums Net changes in unearned premiums Net earned premiums Reinsurance commission income Other underwriting income Underwriting revenue
Protection & Savings SR 2,891,838 (2,912,126) (3,654) (23,942) 1,250,225 1,226,283 1,291,322 289,270 2,806,875
Health Insurance SR 28,056,689 (34,041) 28,022,648 (7,346,641) 20,676,007 78,893 20,754,900
Motor Insurance SR 190,439 (1,684) 188,755 (168,962) 19,793 585,314 605,107
Other General Insurance SR 2,493,151 (2,230,103) (84,833) 178,215 333,362 511,577 617,629 1,129,206
Total SR 33,632,117 (5,176,270) (90,171) 28,365,676 (5,932,016) 22,433,660 1,987,844 874,584 25,296,088
Gross claims paid Reinsurers' share of claims paid Net claims paid Changes in outstanding claims Net claims incurred Commissions incurred Inspection and supervisory fees Other direct underwriting expense Doubtful debt expense Underwriting expenses
(12,780,123) 12,512,520 (267,603) (1,012,289) (1,279,892) (206,084) (21,812) 17,166 (1,490,622)
(8,634,778) 337,419 (8,297,359) (11,470,463) (19,767,822) (711,603) (311,494) (142,569) 200,968 (20,732,520)
(880) (880) (173,114) (173,994) (1,625) (131) (1,292) (177,042)
(152,849) 151,722 (1,127) (315,846) (316,973) (416,953) (20,729) (3,008) (757,663)
(21,568,630) 13,001,661 (8,566,969) (12,971,712) (21,538,681) (1,336,265) (354,166) (142,569) 213,834 (23,157,847)
1,316,253
22,380
428,065
371,543
2,138,241
Underwriting result
(10,268,581)
Unallocated expenses Unallocated special commission income
156,164 (7,974,176)
Net deficit for the period from insurance operations
20
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016
For the year ended 31 December 2015 (Audited)
Gross written premiums Reinsurance premiums ceded Excess of loss premiums Net written premiums Net changes in unearned premiums Net earned premiums Reinsurance commission income Other underwriting income Underwriting revenue
Protection & Savings SR 16,658,472 (11,684,553) (3,654) 4,970,265 (878,973) 4,091,292 2,250,660 754,181 7,096,133
Health Insurance SR 90,989,100 (1,858,145) 89,130,955 (61,259,999) 27,870,956 274,211 28,145,167
Motor Insurance SR 190,439 (1,684) 188,755 (168,962) 19,793 1,178,982 1,198,775
Other General Insurance SR 36,902,909 (34,152,685) (375,145) 2,375,079 (642,357) 1,732,722 2,125,824 3,858,546
Total SR 144,740,920 (47,695,383) (380,483) 96,665,054 (62,950,291) 33,714,763 4,650,695 1,933,163 40,298,621
Gross claims paid Reinsurers' share of claims paid Net claims paid Changes in outstanding claims Net claims incurred Commissions incurred Inspection and supervisory fees Other direct underwriting expense Doubtful debt expense Underwriting expenses
(30,210,371) 28,565,808 (1,644,563) (1,963,533) (3,608,096) (681,090) (78,066) (28,371) (4,395,623)
(10,703,298) 826,104 (9,877,194) (15,876,199) (25,753,393) (1,114,641) (424,604) (367,695) (469,936) (28,130,269)
(880) (880) (173,114) (173,994) (1,625) (131) (1,292) (177,042)
(474,879) 473,276 (1,603) (1,427,852) (1,429,455) (1,487,305) (45,574) (27,168) (732,701) (3,722,203)
(41,389,428) 29,865,188 (11,524,240) (19,440,698) (30,964,938) (3,284,661) (548,375) (394,863) (1,232,300) (36,425,137)
2,700,510
14,898
1,021,733
136,343
3,873,484
Underwriting result
(35,304,973)
Unallocated expenses Unallocated special commission income
156,164 (31,275,325)
Net deficit for the period from insurance operations
21
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 10
SEGMENT INFORMATION (Continued) b)
Insurance operations’ assets and liabilities 31 December 2016 (Unaudited)
Insurance operations’ assets Cash and cash equivalents Premiums receivable, net Reinsurers’ balances receivable Reinsurers' share of unearned premiums Reinsurers’ share of mathematical reserves Reinsurers' share of outstanding claims Deferred policy acquisition costs Due from related parties Prepaid expenses and other assets Time deposits Due from shareholders operations Property and equipment, net TOTAL INSURANCE OPERATIONS' ASSETS Insurance operations’ liabilities Gross unearned premiums Gross outstanding claims Gross mathematical reserves Payables, accruals and others Reinsurance balances payable Unearned reinsurance commission income Due to related parties Employees' terminal benefits TOTAL INSURANCE OPERATIONS’ LIABILITIES
Protection & Savings SR
Health Insurance SR
Motor Insurance SR
Other General Insurance SR
Unallocated SR
624,199 1,249,349
31,000,000 34,600,805 -
5,052,236 -
13,114,110 -
13,784,851 -
44,784,851 53,391,350 1,249,349
206,192
282,253
-
28,103,822
-
28,592,267
234,842,010
-
-
-
-
234,842,010
15,715,914 262,429 32,926 -
852,998 5,132,546 19,574,671 -
763,885 3,430,779 -
17,235,340 2,924,757 377,560 -
2,195,571 11,845,787 15,000,000 2,904,525 3,776,580
33,804,252 9,083,617 2,195,571 35,261,723 15,000,000 2,904,525 3,776,580
252,933,019
91,443,273
9,246,900
61,755,589
49,507,314
464,886,095
1,863,946 21,547,611 234,842,010 1,093,708 1,760,672
59,775,272 37,101,310 11,547,455 793,867
5,618,736 3,469,732 1,027,546 99,295
29,573,100 18,993,576 1,848,298 17,639,101
6,709,251 -
96,831,054 81,112,229 234,842,010 22,226,258 20,292,935
45,489 -
81,114 -
-
4,825,494 -
2,615,731 2,013,781
4,952,097 2,615,731 2,013,781
261,153,436
109,299,018
10,215,309
72,879,569
11,338,763
464,886,095
22
Total SR
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 10
SEGMENT INFORMATION (Continued) b)
Insurance operations’ assets and liabilities 31 December 2015 (Audited)
Insurance operations’ assets Cash and cash equivalents Premiums receivable, net Reinsurers' share of unearned premiums Reinsurers’ share of mathematical reserves Reinsurers' share of outstanding claims Deferred policy acquisition costs Due from related parties Prepaid expenses and other assets Due from shareholders operations Property and equipment, net TOTAL INSURANCE OPERATIONS' ASSETS Insurance operations’ liabilities Gross unearned premiums Gross outstanding claims Gross mathematical reserves Payables, accruals and others Reinsurance balances payable Unearned reinsurance commission income Due to related parties Employees' terminal benefits TOTAL INSURANCE OPERATIONS’ LIABILITIES
Protection & Savings SR
Health Insurance SR
Motor Insurance SR
Other General Insurance SR
Unallocated SR
318,524
50,000,000 17,020,050
85,666
18,237,183
14,689,241 -
64,689,241 35,661,423
178,864
147,265
-
27,296,603
-
27,622,732
251,654,626
-
-
-
-
251,654,626
12,222,662 153,059 17,742 -
300,053 2,320,193 3,603,685 -
13,983 1,180,363 -
7,400,929 2,370,628 251,632 -
624,740 8,696,644 8,010,111 5,757,153
19,923,644 4,857,863 624,740 13,750,066 8,010,111 5,757,153
264,545,477
73,391,246
1,280,012
55,556,975
37,777,889
432,551,599
1,057,837 14,186,195 251,654,626 (7,474) 8,158,119
62,286,890 16,238,108 5,416,566 (50,935)
168,962 173,114 7,010 4,856
28,517,378 9,054,656 1,590,248 21,763,265
5,865,634 -
92,031,067 39,652,073 251,654,626 12,871,984 29,875,305
44,440 -
36,828 -
-
3,672,753 -
1,675,037 1,037,486
3,754,021 1,675,037 1,037,486
275,093,743
83,927,457
353,942
64,598,300
8,578,157
432,551,599
23
Total SR
MetLife, American International Group and Arab National Bank Cooperative Insurance Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Continued) For the year ended 31 December 2016 11
COMMITMENTS AND CONTINGENCIES
At 31 December 2016, Letters of Guarantee amounting to SR 3,499,207 were outstanding in favour of medical providers and general insurance tenders (SR 3,538,097 as at 31 December 2015). These letters of guarantee were issued against cash margin amounting to SR 3,499,207 and SR 3,538,097 as at 31 December 2016 and 31 December 2015 respectively which are classified under prepaid expenses and other assets in the interim statement of financial position. There were no other commitments, contingencies, or outstanding legal proceedings or disputes of material nature. 12
COMPARATIVE FIGURES
Certain figures for the prior period have been reclassified to conform to the presentation made in the current period; however the impact of such reclassifications was not material to the overall presentation of the interim financial statements. 13
APPROVAL OF THE INTERIM CONDENSED FINANCIAL STATEMENTS
The interim condensed financial statements have been approved on 18-Rabi Al-Akhar-1438H corresponding to (16January-2017 G).
Managing Director/ Chief Executive Officer
Chief Financial Officer
24
