Annual Report for 2016

Transcription

1 Ministry of Finance Iraqi Insurance Company Iraqi Insurance Company Annual Report for 216 Prepared &Translated By Planning Dept

2 Introduction We are pleased to present our fifty seven annual report of the company's business activities for 216 after having been approved by Board of Supreme Audit for the year ended 31 st December, 215. In 216, our company has provided insurance protection to many policy holders with various insurance types life and non-life insurance. We provide protection to around one million borrowers, to the state property and to the banks through covering the losses of loan projects. The company is planning for a lot of expansion in the customer services to cover the expected needs of the local market according to the technical criteria. / / 217 1

3 Abstract 1- The nominal and paid up capital of the company is ID. two billion by Insurance Regulatory Act No. (1) of 25. One billion is specified to underwrite with Takaful Islamic Insurance. 2-The company comprises of 15 departments and it has 19 branches distributed in Iraq between Baghdad and other provinces, 6 in Baghdad and 13 in the provinces. 3-The premiums earned in 216 are ID /- and this value exceeds the planned premiums of 216 by 11% and exceeds the premiums achieved in 215by 16%. 4-The claims paid in 216 are ID. 3684/- for (6595) claims for different types of insurance which exceed the planned claims of 216 by 96% and exceed the claims paid of 215 by 13%. 5-The company deals with different types of insurance: (Individual., Group)lif& healtl)., Motor Ins., Marine Cargo Ins., Fire and Accidents Ins., Engineering Ins. and Civil Liability Ins.) 6-There awe 41 empliyees wovking wt the company, whether admimstrtvative or technical,of whicg 24 owr males and 197 awe females, noting that the numbev of employees was 411 in the last year, which means there is a decrease of 2% in employmewt compared to lost year. 7-The invested amounts volume reached to ID in 216 down by 16% of the planned amounts and vpby by 6% of the achieved amount in The investment revenues have risen to ID. 2797/- which represents an increase of 1% compared with 215 and represents 13% rate of implementation. 9-The solvency of the company is 222% which indicates the progress and improvement of the company. 1-The company achieves a net profit of ID. 7499/- which exceeds 216% of the planned amounts but down by 121% of the achieved amounts in The lawsuits which are filed against our company during 215 are 28. 2

4 Ministry of Finance Iraq Insurance Company Annual Report / 216 First: General Information A- Profile & History: The Iraq Insurance Company established on 14/1/1959 according to Commercial Companies Act No. 31 of 1957 in Baghdad as a private company dealing with all types of insurance and reinsurance, in 1964 the company was nationalized by the companies nationalization resolutions specializing in life assurance only, and all the portfolios of foreign and Arabian companies in the Iraqi market at that time quoted to the company portfolio. The resolution No. 392 of 1988, allowed the company again to practice all types of insurance. Public Companies Act of 1997, opened a wide range of development and competition to the company. Insurance Regulatory Act No. 1 of 25 organized the company activities. The company aims to develop the national economics through spreading the privileges of insurance among people. B The Capital: The nominal and paid up capital is two billion Dinar. One billion Dinar is specified to underwrite with Takaful Islamic Insurance. In addition to the total assets which are more than (57) billion Dinar. According to the instructions No. 15 of 212 regarding the minimum limit of the capital which is published in Iraqi Gazette number No on 21/5/212, it is approached General Secretariat for the Council of Ministers to increase the company capital to seven billion Dinar. 3

5 C- Organizational Structure of Iraq Insurance Co. Board of Directors Director-General Branches Departments Outside Baghdad Inside Baghdad Administrative Dept. Technical Dept. Karbala Br. Nineveh Br. Kirkuk Br. Al-Rusafa Br. Al-Sadoun Br. Financial Dept. Internal Auditing Dept. Life Assurance (Underwriting) Dept. Al-Najaf Br. Diyala Br. Al-Adhamiya Br. Planning Dept. Life Assurance (Claims) Dept. Al-Qadisiya Br. Al-Muthana Br. Al-Anbar Br. Babil Br. Al-Kadhumiya Br. Al-Karkh Br. Marketing Dept. Investment Dept. Marine-Cargo Ins. Dept. Fire and Accidents Ins. Dept. Thi-Qar Br. Wassit Br. Baghdad Al-Jadeeda Br. Legal Dept. Motor Ins. Dept. Al-Basra Br. Missan Br. I.T Dept. Group Ins. Dept. 4

6 The internal system consists of the organizational structure of Iraqi Insurance Company : 1- Board of Directors : The highest legislative power in the company, according to State Companies Law No. 22 of 1997, consists of each of the following :- Name Members Haifaa Shamoon essa Chairman Saeed Abbas Mirza Kareem Yunis Kadhum shadha Abdulhadi Hashim Angham Rahi Abdulwahid Lamyaa Fadil Wuhaib Experienced & Competent Member Experienced & Competent Member Appointed Member Elected Member Elected Member Faiza Salman Ibrahim Firyal Salim Abbas Appointed Member Appointed Member 5

7 2- Departments of the Co.: The headquarter consists of the following departments :- Departments Planning Dept. Legal Dept. Technical Dept. Life Assurance ( underwriting ) Dept. Financial Dept. Group Ins. Dept. Motor Dept. Marine Dept. Life Assurance ( claims ) Dept. Internal Auditing Dept. Investment Dept. Fire and Accidents Dept. Administrative Dept. I.T. Dept. Marketing Dept. Manager Names Shadha Abdulhadi Hashim Angham Rahi Abdulwahid Nesreen Abdulmajeed Abdulazeez Lamyaa Fadil Wuhaib Faiza Salman Ibrahim Firyal Salim Abbas Majida Sada Hussein Sabriya Murshid Basha Nedaa Naji Saleh Kifah Hussein Kadhum Jinan Hassan Ali Ameera Mousa Abd Nada Abdul Sattar Abdul Jabbar Nagham Tariq Mahmood Samer Abdul Melik Muhamed Saleh 6

8 3-Branches of the Co. : The company has 19 branches distributed in Iraq between Baghdad and other provinces, 6 in Baghdad and 13 in the provinces. Branches Rusafa Branch Al-Karkh Branch Sadoun Branch Al-Kadhumiya Branch Al-Adhamiya Branch Baghdad Al-Jadeeda Branch Wassit Branch Al-Najaf Branch Kirkuk Branch Al-Qadisiya Branch Karbala Branch Diyala Branch Babil Branch Missan Branch Al-Basrah Branch Al-Muthnna Branch Thi-Qar Branch Al-Anbar Branch Ninavah Branch Manager Names Thair Diyab Salim sattar Maki Raad Najwa Odeshu Dawood Iman Safi Salih Basim Maala Hussein Thamir Abdulkareem Mhamad Hameed Sarhan Sabah Abdulhussein Abdulzahra Amir Mhamad Ali Ismael Oruba Faisal Marwan Mahdi saleh mahdi Sheerin Mahdi Mhamad Juad Bahaa Zuhair Mhamad Thair Abdulhussein Muhsin Wisam Mhamad Musa Kareem Sail Shikheb Rafid Saleh Hussein Qeisser Tahseen Jubeir Standstill Work 7

9 D- Manpower: The number of employees in the company is 41 down by 2% of 215, distributed between admin. and technical, 24 males and 197 females. The following table indicates the development of manpower for the years ( ) and the number of inactive manpower. Table No. ( 1 ) Development of manpower Total No. of Manpower of Change Number of Inactive Manpower Number of Active Manpower of Change of Inactive Manpower % 7% -.5% 1% -2% % 7% -1.5% -1% -2% 1% 1% 2% 4% 3% 8

10 E- Training and Development: 115 of the employees have participated in training programs held by Iraqi Accounting and Financial Training Center. The following table indicates the development of training in the last five years and the rate of trainees' number to the total number of manpower in the company Table No. ( 2 ) Training & development for the last five years Total No. of Manpower No. of Trainees of Trainees to the Total 35% 31% of Change 73% 5% % 29% 29% 4% 2% 4% Trainees Number For No. of Trainees Total No. of Manpower Secondly: General Indicators of the Company Performance: 9

11 A Achievement of Objectives: The company participates in developing Economics through providing insurance protection to the customers, encouraging them to save money which used in investment. 1- Insurance Premiums: The company deals with all types of insurance, life and non-life insurance. The following table indicates the development of planned and earned premiums and the rates of implementation for the last five years. Table No. ( 3 ) Development of planned and earned premiums 212 Planned Premiums 22 of Change % 1% Earned Premiums of Change % 76% of Implement. 199% % 3% 54% % 18% 5% 171% 155% 16% % 89% Development of planned and Earned Premiums Planned Premiums Earned Premiums

12 2- Investment Revenues: The revenues earned from investing the surplus. The following table indicates the development of planned and earned investment revenues and the rates of implementation for the last five years. Table No. ( 4 ) Development of planned and earned investment revenues Planned Investment Revenues of Change % 17% 15% 4% 1% 3% Earned Investment Revenues of Change % 4% 4% 5% 1% 1% of Implement. % 86% 14% 15% 15% 13% Development of planned and earned investment revenues For Planned Investment Revenues Earned Investment Revenues

13 3 -Technical Reserves Table No. (5) Development of technical reserves for ( ) Amounts of Planned Reserves Confined Reserves of Confined to Planned Reserves of Change % 55% % 19% % 3% % 21% % -6% Development of technical reserves for ( ) Confined Reserves Amounts of Planned Reserves

14 Table No. ( 6 ) Types of technical reserves compared to 215 Type of Reserves Reserved Amounts in216 Reserved Amounts in215 of Change Reserves of Effected Risks Reserves of Outstanding Claims Reserves of Emergency Accounting Reserves % -31% 13%.3% This table indicates increase in the reserves of the effected risks compared with 215 because contracting with banks to cover motor loans along the whole year, the reserves of outstanding claims increased because of the incomplete claim requirements of the policy holders, the reserves of emergency has been increased to face the catastrophic risks in insurance. Types of technical reserves compared to Reserved Amounts in216 Type of Reserves Resrves of efrfected Risks Reserves of Outstanding Claims Reserves of Emergency Accounting Reserves 13

15 B Scope of Implementation of the Plan 1- Insurance Premiums according to Portfolios: The company distributes its plan according to marketing insurance portfolios. The following table indicates the development of planned and earned premiums for each insurance portfolio, with a comparison between planned and earned premiums for each insurance portfolio. Portfolio Individual Life Ass. Group Ins. Motor Ins. Marine- Cargo Ins. Fire Ins. Engineering Ins. Public Accidents Ins. Table No. ( 7 ) Planned & earned premiums according to portfolios in 216 Planned Premiums Earned Premiums of Implement. % 93% 8% 329% 68% 15% 14% 127% Earned Premiums in of Change % -13% -18% -21% 193% 2% 83% -17% Planned & earned premiums according to portfolios in Individual Group Ins. Motor Ins. Marine- Life Ass. Cargo Ins. Fire Ins.Engineering Public ins Accidents Ins. Planned Premiums Earned Premiums Earned Premiums in

16 2- Individual Life Assurance: The individual life assurance distinguished from other types of insurance that it offers saving and protection services. The company has an annual plan to follow up the marketer activities in addition to the mentioned premiums plan. The two following tables indicate the development of the number and insurance amounts of the new individual life assurance policies for ( ). Table No. ( 8 ) Development of planned and earned individual life assurance policies 212 Planned Policies No. 11 Earned Policies No of Implement. 14% of Change 42% % -2% % 191% % 13% % 5% The earned policies number: are the issued policies number deducted the cancelled policies number. Development of planned and earned individual life assurance policies Earned Policies No. Planned Policies No

17 Table No. ( 9 ) Development of planned and earned individual life assurance amounts 212 Planned Ass. Amounts 75 Earned Ass. Amounts of Implement. 88% of Change 1% % 5% % 132% % (11%) % -8% Development of planned and earned individual life assurance amounts Earned Ass. Amounts Planned Ass. Amounts 16

18 Real Estate Investment Fixed Deposits Real Estate Loans Contribution in private and mixed sector Total 3- Types of Investment Amoumts Revenues: There are four types of the investment of the surplus:- A- Real Estate Investment. B- Contribution in the private and mixed sectors companies. C- Real Estate Loans. D- Deposit at Banks. The following table indicates the planned and earned investment revenues in 216 compared with 215. Table No. ( 1 ) Planned and Earned Investment Revenues in 216 Type of Investment Real Estate Investment Fixed Deposits Real Estate Loans Contribution in private and mixed sector companies Total Planned Revenues Earned Revenues to Total 62% 21% 5% 12% 1% of Implement. 99% 9% 1% 128% 13% Earned Revenues in of Change -14% -5% -23% 93% 1% Planned and Earned Investment Revenues in Planned Revenues Earned Revenues Earned Revenues in

19 The invested amounts volume rises to ID /- which is more than the invested amounts in 215 by 6%. The following table indicates the development of the earned and planned investment revenues and rate of investment revenue to the invested amount in the last five years. Table No. ( 11 ) Development of investment amounts compared with returns 212 Planned Investment Amounts 211 Earned Investment Amounts of Implement. 13% of Change 3% Earned Investment Revenues of Revenue to Invested Amount 8% % 25% % % 31% % % (3%) % % 6% % Development of investment amounts compared with returns Earned Investment Amounts Planned Investment Amounts Earned Investment Revenues 18

20 Table No. ( 12 ) Investment amounts according to the types Real Estate Investment Type Shares Loans Deposits Investment amounts according to the types for Real Estate Deposits Loans Shares

21 The following table indicates the names of private and mixed companies which our company shares in their capital more than 1% of our company capital with the contribution amounts for each. Table No. ( 13 ) Names of mixed & private companies 1 Company Name Baghdad Soft Drinks Co. Sector Private Contribution Amount Investment Bank of Iraq Private Bahrain National Holding Co. Arabian Co. (outside Iraq) Light Industries Co. Mixed Arab Reinsurance Co. Arabian Co. (outside Iraq) $ Modern Paint Industries Co. Mixed Baghdad Al-Salam Co. for Food Industries Modern Construction Co. Mixed Mixed Iraqi Co. Seeds Production Mixed 375 2

22 A- Analysis of the Company Profitability: The distributable surplus amount of operating processes rises to /- IQD as on 31/12/216 which is more than the planned profit by (316%) and more than the achieved profit of 215 by (121%). Table No. ( 14 ) Development of planned and earned profits 212 Net Planned Profit 3677 Net Earned Profit of Implement. 15% of Change 24% % 28% % 46% % -52% % 121% Development of planned and earned profits for B- Expenses: 3 The company's expenses are divided into two main types: Ins. Operating Expenses: A- Claims: claims paid to policyholders and beneficiaries which form the bulk of the Net Earned Profit Net Planned Profit 21

23 B- Expenses. The two following tables indicate the development of paid and expected claims & the rate of paid claims to earned premiums for each insurance portfolio. Table No. ( 15 ) Development of expected and paid claims for ( ) Expected Claims Paid Claims of Paid to Expected Claims 161% 171% 18% 131% of Change in Paid Claims 96% 44% 27% 9% % -13% Development of expected and paid claims for ( ) Expected Claims Paid

24 Table No. ( 16 ) Paid claims compared to earned premiums portfolios in 216 Portfolio Individual Life Ass. Earned Premiums Paid Claims of Claims to Premiums 93% Group Ins % Motor Ins % Marine-Cargo Ins Public Accidents Ins % Fire Ins % Engineering Ins Reins. Revenues % Total % Paid claims compared to earned premiums portfolios in Earned Premiums 2 1 Individual Life Ass. Group Ins. Motor Ins. Marine-Cargo Ins. Public Accidents Ins. Fire Ins. Engineering Ins. Reins. Revenues Total 23

25 B- Reinsurance Premiums: The reinsurance premiums reached to ID. 4346/- in 216 which represents 8% of the total premiums less (19%) compared with 215. Note that the bulk of the premiums belong to non-life insurance policies while the company retains approximately the entire of the sum insured of life assurance policies. The following table indicates the development of reinsurance premiums for the last five years. Table No. ( 17 ) Development of reinsurance premiums for ( ) Earned Premiums Reinsurance Premiums of Reins. Premiums to Earned Premiums 13% 12% 13% 8% of Change 34% 1% 32% -32% % -19% Development of reinsurance premiums for ( ) Earned Premiums Reinsurance Premiums 24

26 C- Reinsurance Claims: The reinsurance paid claims reached to ID /- in 216 which represents 4% of the total claims Table No. ( 18 ) Development of reinsurance share in claims Paid Claims Reinsurance Share of Reins. Share in Paid Claims,2% 6% 3% 1% 4% of Change -88% 4513% -32% -52% 144% Development of reinsurance share in claims for Reinsurance Share Paid Claims

27 D- Productivity: 1- Employee Productivity The following table indicates the development of the employee productivity for the last five years. Table No. ( 19 ) Development of employee productivity for ( ) Earned Premiums Employees No Employee Productivity Development of employee productivity for ( ) Employee Productivity Earned

28 2- Fee Productivity The following table indicates the development of the fee productivity for the last five years. Table No. ( 2 ) Development of fee productivity for ( ) Earned Premiums Paid Salaries & Fees Fee Productivity 11,742 12,697 12,456 13, Development of fee productivity for ( ) Paid Salaries & Fees Earned Premiums

29 2- Management Expenses: A- Total Numbers: The management expenses include salaries, fees, requirements of goods, services and other expenses. The planned management expenses for 216 reached to ID. 9974/- whereas the paid management expenses reached to ID. 5842/- which represents 59% ( of implementation). The following table indicates the development of the planned and paid management expenses for the last five years. Table No. (21) Development of planned & paid management expenses 212 Planned Management Expenses 5545 of Change 15% Paid Management Expenses of Change 9% of Implement. 83% % 14% % 5% 82% 69% % 18% % -.3% 69% 59% Development of planned & paid management expenses for Paid Management Expenses Planned Management Expenses

30 B- Advertisement: Table No (22) Development of Advertisement Amounts for Planned Amounts Paid Amounts of Implement. of Change % 23% %.9% % 14% % -39% % 32% Development of Advertisement Amounts for

31 C- Hospitality Table No (23) Development of Hospitality Amounts for Planned Amounts Paid Amounts of Implement. of Change % 39% % 71% % 21% % 26% % -21% Development of Hospitality Amounts for Planned Amounts Paid Amounts

32 D- Travel: Table No (24) Development of Travel Amounts for Planned Amounts Paid Amounts of Implement. of Change % 2% % -3% % -2% % -21% % -2% Development of Travel Amounts for Planned Amounts Paid Amounts

33 E- Gifts: None F- Research & Development: Table No (25) Development of Research Amounts for Planned Amounts Paid Amounts of Implement. of Change % 17% % 18% % - 4% % - 52% % 121% Development of Research Amounts for Planned Amounts Paid 32

34 G- Solvency: The solvency of the company reached to 222% in 216 which indicates the progress and improvement of the company. The following table indicates the development of the solvency for the last five years Table No. (26) Development of Solvency Current Solvency Required Solvency Acceptable Solvency 117% 137% of Change -22% 17% % 168% 222% 25% 11% 32% Development of Solvency For Required Solvency Current Solvency

35 H- Effect of Activity on Balance of Payment: The following table states summary of the outgoing and incoming amounts. Table No. (27) Effect of Activity on Balance of Payment for Figures are in USD Incoming Amounts Outgoing Amounts Effect of Activity on Balance of Payment The table above states that the activity result is in favor of our company because dealing with foreign companies and organizations is limited to the non-technical activity of the company, whereas the technical activity, represented by share of reinsurance companies of the underwriting premiums, is accomplished only by Iraqi Reinsurance Company. Effect of Activity on Balance of Payment for Figures are in USD Outgoing Effect of Activity on Balance of Payment Incoming Amounts 34

36 I- Effect of Activity on Inflation: Because of the change in the general average of the rates, higher inflation, restructuring of Iraqi economy and the bad security situation for the two decades ago, the value of life assurance policy and its profits are dropped a lot. This policy is distinguished from other policies that its period is long and it is a saving policy, its premium consists of two parts, risk premium and saving premium which effects a lot for the aforementioned reasons. In spite of the procedures taken by the company to develop its investment but the investments are bad because they depend on benefit of governmental banks on fixed deposits reached to 59% of the gross investments in 215, As for the generad Insurance, veducing the impact of inflation is achieved by the prompt settlement of claims duving the insurance year. J- Contracts: No contracts in 215 except insurance contracts and contracts with lessees. Currency Iraqi Dinars ID. US $ 1 = 1166 ID. Figures in 1 ID. MINISTRY OF FINANCE IRAQ INSURANCE COMPANY BALANCE SHEET AS ON 31/Dec/215 Assets Figures in 1 ID. 216 Figures in 1 ID. 215 Money Investments Debtors Fixed Assets Total Liabilities Figures in 1 ID. 216 Figures in 1 ID. 215 Current Liabilities Creditors Fixed Liabilities Paid Capital 2 2 General Reserves Technical Reserves Total

37 MINISTRY OF FINANCE IRAQ INSURANCE COMPANY Profits and Losses Account & Distribution for Financial year on 31/Dec./215 Operating Activity Revenues Ins. Processes Revenues Investment Revenues Figures in 1 ID. 215 Figures in 1 ID Operating activity Expenses Figures in 1 ID. 214 Figures in 1 ID. 216 Ins. Processes Expenses Depreciation Management Expenses Figures in 1 ID. 215 Figures in 1 ID. 216 Operating Processes Surplus Other Revenues Other Expenses social protecti on bene fits Surplus Figures in 1 ID. Figures in 1 ID Figures in 1 ID. Figures in 1 ID