Jordan International Insurance Company

Transcription

1 Jordan International Insurance Company 2015 Annual Report

2 شركة األردن الدولية للتأمني Jordan International Insurance The 20 th Annual Report and Consolidated Financial Statement and the Auditor Report for the Year Ended December 31, 2015 Annual Report 2015

3 TABLE OF CONTENTS Chairman s Letter Independent Auditor Report Consolidated Statement of Financial Position Consolidated Statement of Income Consolidated Statement of Comprehensive Income Consolidated Statement of Changes in Owners Equity Consolidated Statement of Cash Flows Statement of Underwriting Revenue for the Insurance Licenses Statement of Paid Claims Cost for the Insurance Licenses Statement of Profits Underwriting for the Insurance Licenses Statement of Underwriting Revenue for the Life Insurance Licenses Statement of Financial Position for the Life Insurance Notes to Consolidated Financial Statements

4 Annual Report Chairman s Letter On behalf of the Board of Directors, it gives me great pleasure to welcome you to the 20th general assembly meeting, and to present to you our audited financial statements and annual report. The company has achieved its objectives of growing its profitability by generating a net profit of 1.6m and growing the company s net book value from 24.4M to 25.9M as a result of the positive developments in both insurance and investment operations in The company s solvency margin has also increased from 380% to 413%, making it one of the most liquid insurance companies in Jordan with a very strong balance sheet to cover liabilities and subsequent claims. As a result the company is now the insurer of choice for large corporates and individuals. Additionally, we were recently selected by the leading industry publication MENA Insurance Review as the Best Insurer in Jordan for the second year, as a result of the management s innovative and professional approach to managing the insurance portfolio. As part of our growth and expansion strategy, we have established a liaison office in Dubai in order to capitalize on the large volume of premiums and business available in the UAE. We are also in the final stages of completing our new offices and retail space in our Amman headquarters, launching a strong HR initiative for the training and talent management of our dynamic and diverse team, and the launch of our commercial brand: Newton Insurance which will help differentiate JIIG in the local and foreign markets, and provide a platform for us to connect with new opportunities and compete with regards to disruptions occurring in the insurance and financial services industry. The management continue to adhere to the company s underwriting principles: 1. Understanding all risk exposures to the company s insurance portfolio. 2. Assessing conservatively the likelihood of any exposure causing a loss and the probable costs. 3. Setting a premium that will deliver a profit after both prospective loss costs and operating expenses are covered. 4. Developing insurance products that offer better coverage and protection; and that deliver better value to our shareholders.

5 6 Jordan International Insurance Company On the investment front, the company s investment portfolio continued to achieve a stellar performance led by our investment in the Royal Jordanian Air Academy. In addition, our brokerage business, Ibda a Brokerage, has improved profitability as Amman Stock Exchange volumes increased overall. As for our real-estate operating company, Jordan International Investment, the team has commissioned a feasibility and master plan study for the free zone in Hallabat, and has expanded its land bank with an acquisition in Al- Qastal. The company s growth strategy for 2016 will focus on: 1. Expanding the corporate insurance product in the cargo and property segments. 2. Growing the retail and SME segment through launching life insurance products and developing the bancassurance distribution channel. 3. Maintaining the current customer base through customer relationship management. 4. Attracting strategic investors to the Free Zone project 5. Building the company s team and talent base through continued focus on training and performance development. As indicated in our 2014 annual report, we are pleased to announce that dividends will be distributed for the year We recommend the distribution of 6% of net profits to shareholders and maintaining a healthy balance of 1.5% of profits to strengthen and enhance our solvency margin. In conclusion we are confident that Jordan International Insurance s team will build on the recent successes to achieve the Shareholder s long-term objectives. Mazen Darwazeh Chairman of the Board Board of Directors

6 Annual Report A NEW EQUATION IN INSURANCE 2016 marks a turning point for JIIG. Having restructured and streamlined our processes, and having diversified and trained our teams of experts and front house personnel; we have been focusing our efforts on building relations and understanding the needs of the market and developing services that can offer better solutions to a wider and more diversified pool of corporate and individual clients across all insurance lines. We want to be the constant smart choice for companies seeking excellent insurance packages and value adding solutions. Additionally we have been able to establish a good reputation in the health business line and this we have achieved through an aggressive plan to provide quality experts, offer fast processing of client transactions, a quality call center and support staff, better data usage, and better co-design and management of corporate package with clients. Finally our network of partners continues to grow, and we are excited to work closely together to build a brand and product that can continue to compete in an ever changing landscape. Thus our journey of evolution, innovation and learning continues. The Newton brand represents a move towards the future of insurance. With many companies in the financial services sector experiencing eroding customer trust - brought on by lack of quality service and unclear undifferentiated complex products; customers are left to compare providers based on price or proximity. Additionally, the industry has been experiencing many disruptions that have changed the way customers interact with providers on a fundamental level; and thus opening the door for smaller more innovative firms to compete for a share of wallet and to establish a strong position in this new market as serious contenders. The mission of the Newton brand is simple: To develop relevant, timely, easy to use solutions through a transparent, responsive and easy to engage with platform. Our dynamic team of employees the Newtonians are the force behind our excellent service: Knowledgeable, customer focused and dependable. Our service slogan is: Momentum on your side. We understand that our clients need to focus their energy and time on keeping their lives and business in motion, therefore it is our job to come up with smart ways to manage and organize their insurance needs whether in the long term or on

7 8 Jordan International Insurance Company the go. We are already reinventing the way health, marine, P&C and asset insurance is offered in Jordan and we plan to take this model to other countries in the region in the coming year. Newton s vision is to re-invent the way people buy and use insurance through using technology for fast, simple delivery and transparent relationship management, utilizing data to provide preventative advice and information to our clients and partners in real time, and to offer smart mix-and-match coverage that provide individuals, families and businesses the exact right solution at the right time and with flexible customization and renewal options. Finally, Newton is committed to working closely with key financial service providers, government bodies, local communities, online media, social groups and information partners to create a value network that provides all stakeholders with quality strategic and real-time information, timely targeted reports, smarter solutions and better prediction models to strengthen preventative measures. All this to serve the needs of our members. To keep life in motion. To keep businesses running. To progress. To be prepared for whatever is next. This is the core mission of the newton brand.

8 Annual Report Board of Directors H.E. Mr. Mazen Darwazeh Chairman (Executive Vice-Chairman, CEO of the MENA region for Hikma Pharmaceuticals) Mr. Kim Abu Jaber Chairman (Chairman of Abu Jaber Group) H.E. Mr. Sami Gammoh Representing United Group Management H.E. Dr. Michel Marto Director (Chairman of Housing Bank for Trade & Finance) Mr. Haytham Kamhiyah Representing Capital Bank (General Manager of Capital Bank) Mr. Ramzi Khouri Director (Chairman of Medica) Mr. Naim Khouri Director (Former Chairman of the Jordanian Association of Certified Public Accountants Association) Mrs. Lina Kreishan Director Representing Social Security Corporation Mr. Osama Al-Wazani Director (Partner in Al-Wazani Law Firm) Mr. Hazim Sarraf Director (CEO of SNAX) Mr. Faris Gammoh Director (CEO of JIIG)

9 10 Jordan International Insurance Company Major Shareholders 1. United Group Management Consulting 2. H. E. Mr. Sami Gammoh 3. Mr Kim Abu Jaber 4. Social Security Corporation 5. Mr. Qais Abu Jaber 6. Mr. Mazen Darwazeh JIIC Global Reinsurers Swiss Re, Switzerland (AM Best Rating: A+) SCOR Global Life, France (AM Best Rating: A) Gen Re, A Berkshire Hathaway Company, USA (AM Best Rating: A++) Odyssey Re, France (AM Best Rating: A) Korean Re, Korea (AM Best Rating: A) General Insurance Corporation, India (AM Best Rating: A-) Liberty Specialty Markets, United Kingdom (AM Best Rating: A) Insurance Products Corporate Lines Property Energy and Power Marine Cargo and Hull Group Medical and Life Insurance Financial Lines Casualty Personal Lines Home and Property Insurance Personal Accident and Travel Insurance Individual Medical and Life

10 Annual Report For more information about our products and services, please feel free to contact one of our staff members. JIIG Officers Mr Faris Gammoh General Manager Mr Mahmoud Matarneh Deputy General Manager

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12 Annual Report Consolidated Statement of Financial Position as at December 31,2015 December 31 Statement (A) ASSETS Note Deposits at banks 3 8,399,558 7,292,141 Financial assets at fair value through income statement 4 341,103 2,902,643 Financial assets at fair value through other comprehensive income 5 6,948,579 5,549,644 Financial assets at amortized cost 6 365, ,000 Real state investments 7 8,395,520 8,628,640 Total Investments 24,449,760 24,773,068 Cash on hand and at banks 8 632, ,349 Checks under collection 9 425, ,959 Accounts receivable - net 10 4,709,345 3,169,132 Reinsurance companies accounts - debit , ,722 Settlement guarantee fund contribution 12 25,000 25,000 Due from related parties , ,706 Deferred tax assets 13/B 588, ,438 Property and equipment - net 14 2,381,589 2,324,025 Intangible assets , ,000 Other assets , ,640 TOTAL ASSETS 35,169,163 33,430,039 LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES Unearned premiums provision - net 1,765,988 1,499,534 Claims provision - net 2,056,259 2,771,139 Mathematical provision - net 17 42,116 27,080 Total Insurance Contracts Liabilities 3,864,363 4,297,753 Accounts payable 18 1,067,841 1,379,069 Reinsurance companies accounts - credit 19 1,195, ,807 Accrued expenses 56,254 99,024 Due to related parties ,322 11,887 Other provisions , ,309 Provision for income tax 13/A 2,887 - Deferred tax Liabilities 13/B 562, ,085 Other liabilities 21 1,915,315 1,736,719 TOTAL LIABILITIES 9,172,143 9,026,653 SHAREHOLDERS' EQUITY Authorized and paid - up capital 1 & 22 18,150,000 18,150,000 Statutory reserve 23 2,584,294 2,419,770 Special reserve 24 2,225 2,225 Difference in purchasing non controlling shares , ,354 Cumulative change in fair value - net 26 1,781,698 1,781,929 Accumulated Gains (losses) 27 2,241, ,137 Total Shareholders' Equity 25,997,020 24,403,386 Non controlling intresets , ,971 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 35,169,163 33,430,039 THESE STATEMENTS ARE SELECTIVE EXTRACTS FROM THE ENGLISH FINANCIAL STATEMENTS AND SHOULD BE READ TOGETHER WITH THEM

13 16 Jordan International Insurance Company Consolidated Statement of Income as at December 31,2015 Statement (B) For the Year Ended December 31 Note Revenue: Gross written premiums 12,833,528 11,026,532 (Less): Re - insurers' share (8,125,564) (6,831,286) Net Written Premiums 4,707,964 4,195,246 Net change in unearned premiums reserve (266,454) (104,989) Net change in mathematical provision (15,036) (9,613) Net Written Premiums 4,426,474 4,080,644 Commissions revenue 874, ,606 Rent revenue 30 17,182 15,259 Policy issuance fees 377, ,762 Credit interest , ,009 Gains from financial assets and investments-net 30 1,494,848 1,535,116 Other revenue , ,938 Total Revenue 8,027,876 7,451,334 Claims, Losses and Expenses Paid claims 10,111,108 9,578,956 (Less): Recoveries (591,588) (629,102) Re - insurers' share (5,296,205) (4,019,285) Net Claims Paid 4,223,315 4,930,569 Net change in claims reserve (714,880) (1,337,105) Allocated employees' expenses 32 1,247,571 1,039,852 Allocated general and administrative expenses , ,129 Excess of loss premium 31,500 13,500 Cost of policies acquisition 53,484 53,698 Other expenses related to underwritings 208, ,127 Other expenses 47,222 8,610 Net Claims Paid Cost 5,379,744 5,156,380 Unallocated employees expenses , ,030 Unallocated general and administrative expenses , ,372 Depreciation and amortization 102, ,794 Impairment in accounts receivable provision 11&10 26,128 40,000 Other provisions 5,449 68,500 Total Expenses 6,383,235 6,235,076 Profit before Tax - Statement (E) 1,644,641 1,216,258 Income tax 13/A (41,621) (12,679) Net Profit for the Year - Statements (C), (D) 1,603,020 1,203,579 Refer to: Company Shareholders' 1,601,139 1,202,628 Non controlling interests 28 1, ,603,020 1,203,579 Earnings Per Share for the Year 34 0/088 0/066 THESE STATEMENTS ARE SELECTIVE EXTRACTS FROM THE ENGLISH FINANCIAL STATEMENTS AND SHOULD BE READ TOGETHER WITH THEM

14 Annual Report Consolidated Statement of Comprehensive Income as at December 31,2015 Statement (C) For the Year Ended December 31 Note Profit for the Year - Statement (B) 1,603,020 1,203,579 Comprehensive Income Items: Cumulative change in fair value -financial assets at fair value through other comprehensive income 26 (231) Gross Comprehensive Income - Statement (D) 1,602,789 1,203,579 Refer to: Company Shareholders' 1,600,908 1,202,628 Non controlling interests 1, ,602,789 1,203,579 THESE STATEMENTS ARE SELECTIVE EXTRACTS FROM THE ENGLISH FINANCIAL STATEMENTS AND SHOULD BE READ TOGETHER WITH THEM

15 18 Jordan International Insurance Company Consolidated Statement of Changes in Owner s Equity as at December 31,2015 Statement (D) Note Paid - up Capital Statutory Reserve Special Reserve Difference In Purchasing Non Controlling Shares Cumulative Change In Fair Value - Net Accumulated Gain (Losses) Realized Unrealized Total Non Total For the Year Ended December 31, 2015 Balance - beginning of the year 18,150,000 2,419,770 2, ,354 1,781,929 (49,826) 854,963 23,479, ,971 24,403,386 Profit for the year - Statement (B) ,601,139-1,601,139 1,881 1,603,020 Net change in investment evaluation reserve - net of tax (231) - - (231) - (231) Total comprehensive income - statement (231) 1,601,139-1,600,908 1,881 1,602,789 Other adjustments-purchasing of non controlling interests during the year , ,450 (14,605) (9,155) Transferred to Statutory reserve - 164, (164,524) Changes during the Year ,598 (266,598) Balance - End of the year 18,150,000 2,584,294 2, ,804 1,781,698 1,653, ,365 25,085, ,247 25,997,020 For the Year Ended December 31, 2014 Balance - beginning of the year 18,150,000 2,290,148 2, ,712 1,781,929 (971,350) 703,481 22,266, ,840 23,233,985 Profit for the year - Statement (B) ,051, ,482 1,202, ,203,579 Total Comprehensive Income - Statement (C) ,051, ,482 1,202, ,203,579 Other adjustments-purchasing of non controlling interests during the year , ,642 (44,820) (34,178) Transferred to statutory reserve - 129, (129,622) Balance - End of the year 18,150,000 2,419,770 2, ,354 1,781,929 (49,826) 854,963 23,479, ,971 24,403,386 THE ACCOMPANYING NOTES CONSTITUTE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS AND SHOULD BE READ WITH THEM.

16 Annual Report Consolidated Statement of Cash Flows as at December 31,2015 For the Year Ended December 31 Note Cash flows from operating activities: Profit before income tax 1,644,641 1,216,258 Adjustments for: Depreciation and amortization 102, ,794 Net change in unearned premiums reserve 266, ,989 Net change in claims reserve (714,880) (1,337,105) Net change in mathematical provision 15,036 9,613 Net change of Financial assets at fair value through income statement 30 23,600 (239,796) Net losses / (profits) on sale Financial assets through income statement (767) (198,069) Impairment in accounts receivable and reinsurance companies accounts - debit 10,11 26,128 40,000 Various provisions-net 20 79,846 72,170 Gain on sale of real state investments 31 (155,302) (71,034) Operating Cash Flows before changes in Assets and Liabilities 1,287,051 (289,180) (Increase) decrease in cheques under collection (98,679) (97,023) (Increase) in accounts receivable (1,566,341) 819,240 (Increase) decrease in Reinsurance companies accounts - debit 61,632 (609,435) Proceeds from Financial assets through income statement 1,951, ,274 (Purchasing) of financial assets through income statement (816,686) - (Increase) decrease in due from related parties (32,944) (83,719) (Increase) in other assets (171,385) (281,378) (Increase) in accounts payable (311,228) 353,905 Increase (decrease) in due to related parties 313,435 1,680 Increase in accured expenses (42,770) (120,043) Increase in Reinsurance companies accounts - credit 414,253 (987,003) Increase in other liability 178,596 90,065 Net Cash Flows from Operating Activities before Income Tax Paid 1,166,392 (606,617) Income tax paid on credit interests (6,031) - Statement (E) Income tax paid refund of interest payable 13-23,182 Paid and refund from various provisions - (22,500) Net Cash Flows from Operating Activities 1,160,361 (605,935) Cash flows from investing activities: Cash proceed from Acquisition of subsidiary company - - Purchasing real state investments (77,054) (636,422) Proceeds from sale of real state investments 452, ,000 Proceeds from sale of Financial assets through other comprehensive income 14 5,000 - Proceeds from Financial assets at amortized cost 35,000 25,000 (Increase) decrease in Deposits at banks (10,000) 1,786,627 (Acquisition) of property, equipment and intangible assets (52,170) (14,700) Proceeds from sale of Property and equipment 14 1,502 - Change in non controlling intresets (9,155) (34,178) Net increase (decrease) in cash and cash equivalents 1,505, ,392 Cash and cash equivalents - beginning of the year 35 7,177,910 6,320,518 Cash and cash equivalents - End of theyear 35 8,683,394 7,177,910 THESE STATEMENTS ARE SELECTIVE EXTRACTS FROM THE ENGLISH FINANCIAL STATEMENTS AND SHOULD BE READ TOGETHER WITH THEM

17 20 Jordan International Insurance Company Statement Of Underwriting Revenue for the Period Ended December 31,2015 Statement (F) Motor Marine and Transportation Aviation Fire and Other Public Liability Personal Accidents Medical Total Written premiums: Direct business - 1, , ,429 93,521 1,092,889 2,771,620 1,358, , ,820 1,243-7,124,027 6,717,475 11,169,302 10,425,691 Re - insurers' inward business ,705 1, ,072 90, ,777 91,975 Gross premiums - 1,984 1,089, ,499 93,521 1,092,889 3,408,692 1,448, , ,820 1,243-7,124,027 6,717,475 11,989,079 10,517,666 (Less): Local re - insurers' share ,754 1, , , , ,142 Foreign re - insurers' share , ,796 92,944 1,092,889 2,580,092 1,211, , , ,031,170 2,909,052 6,691,061 6,331,720 Net written premiums - 1, , , ,813 73,833 22,204 13, ,092,857 3,808,423 4,428,477 4,020,804 Add: Unearned premiums reserve - Beginning of the Year 14, , , , , ,235 1,146,745 22,736 15, ,351,706 2,471,873 3,461,202 4,242,014 Less: Re - insurers' share - Beginning of the Year , , , , ,487 1,131,355 20,354 13, ,106 1,129,493 1,961,668 2,847,469 Net unearned premiums reserve - Beginning of the Year - 13,865 51,804 21, ,748 15,390 2,382 1, ,421,600 1,342,380 1,499,534 1,394,545 Premiums deficiency reserve Less: Unearned premiums reserve - End of the Year , ,032 27, ,493 1,667, ,235 62,764 22, ,696,807 2,351,706 4,848,893 3,461,202 Re - insurers' share - End of the Year , ,228 27, ,493 1,583, ,487 56,652 20, ,076, ,106 3,082,905 1,961,668 Net unearned premiums reserve - End of the Year ,962 51, ,756 23,748 6,112 2, ,620,610 1,421,600 1,765,988 1,499,534 Change in unearned premiums reserve provision - (13,865) 2,158 30, (102) 61,008 8,358 3, (5) 199,010 79, , ,989 Net Revenue from the Underwritten Premiums - statement (H) - 15, ,558 92, ,805 65,475 18,474 12, ,893,847 3,729,203 4,162,023 3,915,815 THESE STATEMENTS ARE SELECTIVE EXTRACTS FROM THE ENGLISH FINANCIAL STATEMENTS AND SHOULD BE READ TOGETHER WITH THEM

18 Annual Report Statement of Paid Claims Cost for the Insurance Licenses for the Period Ended December 31,2015 Statement (G) Motor Marine and Transportation Aviation Fire and Other Public Liability Personal Accidents Medical Total Paid claims 685,269 1,566,339 1,458, ,919-1,431 1,416, ,569 16,119 5,218-2,553 6,171,073 6,573,666 9,747,559 9,060,695 (Less): Recoveries 107, ,227 25,443 96, ,421 23, , , , ,218 Local re -insurers' share ,288 12, ,288 12,532 Foreign re - insurers' share 4,483 84,269 1,347, ,848-1,431 1,034, ,565 8, ,461,594 2,790,565 4,857,034 3,582,174 Net Claims Paid - statement (B) 572,849 1,247,843 85,174 64, ,415 8,524 7,519 4,722-2,553 3,336,886 3,509,705 4,141,843 4,837,771 Add: Reported claims reserve - End of the Year 1,445,412 2,149,451 1,298, , ,070,996 16,551, , ,964 1,904 1, , ,653 13,650,841 20,301,490 IBNR End of the Year 50,000 70,000 30,000 25, ,000 30,000 25,000 25, , , , ,441 Re - insurers' share - End of the Year 305, , , ,957,719 16,279, , , ,932 12,069,003 17,934,800 1,127, ,685 Recoveries 72,719 77, ,719 77,479 Net claims reserve - End of the Year 1,117,363 1,760, , , , , , ,279 1,884 1, , ,162 2,030,536 2,750,652 (Less): Reported claims reserve - beginning of the year 2,149,451 3,657, ,571 1,092, ,551,881 16,717, , ,814 1,970 2, ,653 96,480 20,301,490 22,050,389 IBNR beginning of the year 70, ,088 25,000 15, ,000 20,000 25,000 10, , , , ,899 Re - insurers' share - beginning of the year 381, , , , ,279,494 16,451, , , , ,405 17,934,800 18,300,353 Recoveries 77, , , ,745 Net claims reserve - beginning of theyear 1,760,539 3,124, , , , , , ,288 1,953 2, , ,886 2,750,652 4,072,190 Net Paid Claims Cost - statement (H) (70,327) (115,960) 86,474 58, (19,695) 24,105 (3,990) 1,713 (69) 2,423 3,429,334 3,544,981 3,421,727 3,516,233 THESE STATEMENTS ARE SELECTIVE EXTRACTS FROM THE ENGLISH FINANCIAL STATEMENTS AND SHOULD BE READ TOGETHER WITH THEM

19 22 Jordan International Insurance Company Statement Of Underwriting Profits for the Insurance Licenses for the Period Ended December 31,2015 Statement (H) Motor Marine and Transportation Aviation Fire and Other Public Liability Personal Accidents Medical Total Net revenue from the underwritten premiums , ,558 92, ,805 65,475 18,474 12, ,893,847 3,729,203 4,162,023 3,915,815 Statement (F) (70,327) (115,960) 86,474 58, (19,695) 24,105 (3,990) 1,713 (69) 2,423 3,429,334 3,544,981 3,421,727 3,516,233 Add: received commissions , ,275 8,231 8, , ,058 19,439 58, , , , ,606 Policy issuance fees ,477 18,434 1,878 16,261 48,519 33,353 11,940 5, , , , ,508 Other revenues 57 4, ,148 77, , ,003 43, , ,816 Total revenue 57 4, , ,648 10,109 25, , ,662 31,379 64, , ,448 1,572,300 1,180,930 Less: paid commissions ,694 10, ,792 25,904 1, ,133 16,887 50,925 53,681 Excess of loss premium ,500 13, ,500 13,500 Underwriting administrative expenses - 171, , ,454 9,960 22, , ,111 28,190 53, , ,160 1,331,060 1,088,144 Other expenses 0 28,908 6,300 55, ,652 69, ,658 90, , ,293 Total expenses - 200, , ,312 9,960 22, , ,141 29,496 53, , ,540 1,580,095 1,399,618 Net Underwriting Income (Loss) 70,384 (63,668) 258,009 88, , ,037 4,891 24,347 21, (2,418) 188, , , ,894 THESE STATEMENTS ARE SELECTIVE EXTRACTS FROM THE ENGLISH FINANCIAL STATEMENTS AND SHOULD BE READ TOGETHER WITH THEM

20 Annual Report Statement of Underwriting Revenue, Claims Cost & Underwriting Profits (Losses) for the Life Insurance Licenses for the Period Ended 31 December, 2015 Life Investment Related Total Dec. 31 Dec. 31 Dec. 31 Written Premiums Direct Insurance 844, , , ,866 Gross Earned Premiums 844, , , ,866 Less: Statement (I) Foreign Reinsurance Share 564, , , ,424 Net Earned Premiums 279, , , ,442 Add : Mathmatical provision-beginning of the year 50,488 24, ,488 24,168 Less : Reinsurance Share 23,408 6, ,408 6,701 Net Mathmatical provision at Beginning of the year 27,080 17, ,080 17,467 Closing Balance Add : Mathmatical provision-at end of the year 85,521 50, ,521 57,316 Deduct : Reinsurance Share 43,405 23, ,405 23,408 Net Mathmatical provision at end of the year 42,116 27, ,116 27,080 Change in Mathmatical provision (15,036) 9, (15,036) 9,613 Net Earned Premiums Income from written premiums - Statement (k) 264, , , ,829 Claims Paid 363, , , ,261 Less : Recoveries 1, Local Reinsurance Share - - Foreign Reinsurance Share 280, , , ,579 Net Claims Paid 81,472 92, ,472 92,798 Add: Outstanding Claims Porvision at end of the year: Reported 57,233 49, ,233 49,805 Not Reported 25,000 15, ,000 15,000 Less : Reinsurance Share 56,510 44, ,510 44,318 Net out standing provision at end of the year 25,723 20,487 25,723 20,487 Reported 18,223 8, ,223 8,937 Not Reported 7,500 11, ,500 11,550 Less: Outstanding Claims Porvision at Beging of the year: Reported 49,805 77, ,805 77,552 Not Reported 15,000 15, ,000 Less : Reinsurance Share 44,318 56, ,318 56,498 Net out standing provision at beginig of the year 20,487 36, ,487 36,054 Reported 17,037 21, ,037 21,054 Not Reported 3,450 15, ,450 15,000 Cost of Claims Incurred 86,708 77, ,708 77,231 Net Earned Premiums Income 264, , , ,829 Deduct : Cost of Claims Incurred 86,708 77, ,708 77,231 Add : Commissions Received Issueing Fees 20,341 15, ,341 15,254 Other Revenues 6,641 19, ,641 19,309 Total Revenues 204, , , ,161 Deduct : Commissions Paid 2, , Allocated administrative expenses 199, , , ,837 Other Expenses 41,793 16, ,793 16,834 Total Expenses 243, , , ,688 Underwriting Profit (Loss) (39,267) (32,527) - - (39,267) (32,527) THESE STATEMENTS ARE SELECTIVE EXTRACTS FROM THE ENGLISH FINANCIAL STATEMENTS AND SHOULD BE READ TOGETHER WITH THEM

21 24 Jordan International Insurance Company Statement Of Financial Position For Life Insurance for the Year Ended December 31, 2015 Statement (L) Assets Deposits at banks 100, ,000 Total Investment 100, ,000 Accounts Recievable 194, ,367 Reinsurance companies accounts - debit 12,554 32,880 other assets Property plant and equipment , ,387 Liabilities & equity Liabilities : Accounts Payable 71,966 71,306 Reinsurance companies accounts - credit 100,312 54,714 Other liabilities 27,350 7,507 Outstanding claims provision - net 25,723 20,487 Mathematical provision - net 42,116 27,080 Total Technical provisions - net 67,839 47,567 Total liabilities 267, ,094 Equity Head office current account 78,800 96,820 Net income for the year (39,267) (32,527) Total equity 39,533 64,293 Total Liabilities and equity 307, ,387 THESE STATEMENTS ARE SELECTIVE EXTRACTS FROM THE ENGLISH FINANCIAL STATEMENTS AND SHOULD BE READ TOGETHER WITH THEM

22 Annual Report NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1 General A. The Company was established in 1996 and registered as a public limited shareholding company under Number (301). Its main branch address is Amman Jordan, P.O.BOX 3253 Amman Jordan, with 18/150 million authorized capital divided into 18/150 million shares of 1 each. Moreover, the paid-up capital is 18/150 million as at Dec 31, The ownership of transferred and non- transferred funds required to operate. The company operates in all insurance business types. Investing the surplus fund in the best available manner the company sees. Borrowing the needed funds from the banks. B. The accompanying consolidated financial statements were approved by the Board of Directors in its meeting dated Feb 2, 2015, and it is subject to the approval of the General Assembly of Shareholders. 2 Significant Accounting Policies Basis of Preparation The consolidated financial statements have been prepared according to the Standards issued by the International Accounting Standards Board and in accordance with the forms prescribed by the Jordanian Insurance Commission. The consolidated financial statements have been prepared according to the historical cost convention except the financial assets and liabilities which are shown at fair value as of consolidated financial statements date. The reporting currency of the consolidated financial statements is the Jordanian Dinar, which is the functional currency of the company. The accounting policies adopted for the current year are consistent with those applied in the year ended December 31,2013, Except for the effects shown in Note (44 A).

23 26 Jordan International Insurance Company The consolidated financial statements basis: The consolidated financial statements includes JIIC it s supsidaries financial statements after elemenating intergroup transactions between the group entities: Company Name Paid In Capital Ownership % Type of Business Company Location Date of Ownership Ibda' For Financial Investments 2,500, % Brokerage Amman 2005 Jordan International Investments 10,000,000 90/22% Real Estate Investments Amman 2006 Telal Salem Real Estate 150, % Real Estate Investments Amman 2012 Control is achieved when the company has the ability to control the financial and operating policies of the subsidiaries to obtain benefits from their activities. Additionally, transactions, balances, revenues, and expenses between the company and its subsidiaries are eliminated. The results of the Subsidiaries are incorporated into the consolidated statement of income from the effective date of acquisition which is the date on which is actual control over the subsidiaries is assumed by the company. Moreover, the operating results of the disposed subsidiaries are incorporated into the consolidated statement of income up to the effective date of disposal which is the date on which is the date on which the company losses control over the subsidiaries. The financial statements of the subsidiaries are prepared for the same financial year using the same accounting policies adopted by the insurance company. If the accounting policies adopted by the subsidiaries companies are different from those used by the insurance company, the necessary adjustments to the financial statements of the subsidiaries companies are made to comply with the accounting policies followed by the insurance company. Non controlling interest represent the portion of owners equity not owned by the company in the subsidiaries, non-controlling interest is shown in subsidiaries net assets in separate item thought he group owners equity. The followings are the most significant accounting policies adopted during ended December 31, 2014: the year A. Financial assets at amortized cost Financial assets at amortized cost are the financial assets which the company management intends according to its business model to hold to collect the contractual cash flows which comprise the contractual cash flows that are solely payments of principal and interest on the principal outstanding.

24 Annual Report Financial assets at amortized cost are recorded at cost upon purchase plus acquisition expenses. Moreover, the issue premium \ discount is amortized using the effective interest rate method, and recorded to interest or in its account. Any allocations resulting from the decline in value of these investments leading to the inability to recover the investment or part thereof are recorded, and any impairment is registered in the statement of income. Impairment in financial assets recorded at amortized cost is determined on the basis of the difference between the book value and the present value of the expected cash flows discounted at the effective interest rate. Reclassification of financial assets It s allowed to reclassify the financial assets at amortized cost to financial assets at fair value through profit and loss and vice versa, when the entity changes its business model that has been applied to classify these assets as mentioned above, taking into consideration the following: It s not allowed to return any profit (loss) or any income interest recognized and taken before. When the reclassification of the financial assets that are measured at fair value, its fair value should be determined as at the reclassification date, and any profit (loss) that may occur as a result of the difference between the booked value and the fair value stated in the profit and loss statement should be recorded. B. Financial assets at fair value through profit or loss Other Financial assets that didn t meet these conditions of the financial assets at amortized cost are measures at fair value. Financial assets at fair value through profit or loss represent share, bonds and debentures held by the company for the purpose of trading and achieving gains from the fluctuations in market prices in the short term. Financial assets at fair value through profit and loss are initially stated at fair value at acquisition date (purchase costs are recorded at consolidated statement of income upon purchase); they are subsequently re-measured to fair value as of the date of the financial statements.moreover, change in the fair value are recorded in the statement of income including the change in fair value resulting from foreign currency exchange transaction of non-monetary assets. Dividends or incurred interests are stated in the consolidated statement of income.

25 28 Jordan International Insurance Company C. Financial assets at fair value through statement of comprehensive income Financial assets at fair value through comprehensive income represent the strategic investment in companies shares as a long term investments, not for trading purposes. Financial assets at fair value through other comprehensive income are initially recorded at fair value including acquisition costs. They are subsequently re-measured to fair value; the change in fair value appears in the consolidated statement of comprehensive income and in the owner s equity including change in fair value resulting from foreign currency exchange translation of non-monetary assets. Gains or losses resulting from the sale of these financial assets are taking to the consolidated statement of comprehensive income and owner s equity. The fair value reserve balance that belongs to the equity instruments sold is transferred directly to the retained earnings and not through the consolidated statement of income. Dividends are stated in the consolidated income statement of income. D. Sectors Information The business sector represents a group of assets and operations that share in providing products or services subject to risks and rewards different from those of other business sectors. The geographic sector relates to the provision of products and services in a specific economic environment subject to risks and rewards different from those of sectors operating in other economic environments. E. Date of Recognition of Financial Assets Financial assets are recognized on the trading date (which is the date the Company and its subsidiaries commits itself to purchase or sell the financial assets). F. Fair Value Closing market prices (acquiring assets / selling liabilities) in active market at the date of the consolidated financial statement represent the fair value of financial derivatives traded. In case declared market prices do not exist, active trading of some financial assets and derivatives is not available, or the market is inactive, fair value is estimated by one of several methods including the following: Comparison with the market value of another financial asset with similar terms and conditions. Present value Analysis of expected future cash flows for similar instruments. Adoption of the option pricing models.

26 Annual Report The valuation methods aim at providing a fair value reflecting the expectations of the market, expected risks and expected benefits. Moreover, financial assets, the fair value of which cannot be reliably measured, are stated at cost less any impairment. G. Impairment in the Value of Financial Assets The Company and its subsidiaries reviews the values of financial assets on the date of consolidated statement of financial position in order to determine if there are any indications of impairment in their value individually or in the form of a portfolio. In case such indications exist, the recoverable value is estimated to determine the impairment loss. Impairment is determined as follows: Impairment in financial assets recorded at amortized cost represent the different between the amount recorded and the present value of the expected cash flows discounted at the original interest rate Impairment in financial assets fair value recorded through profit and loss and comprehensive income at fair value represents the difference between book value and fair value. Impairment in financial assets recorded at cost is determined on the basis of present value of the expected cash flows discounted at the market interest rate of similar instrument. The impairment in value is recorded in the consolidated statement of income. Any surplus in subsequent period resulting from previous declines in the fair value of financial assets is taken to the consolidated statement of income except for the impairment in financial assets thought other comprehensive in which is recovered through investment reevaluation reserve through the consolidated comprehensive income and owners equity statements. I. Cash and Cash Equivalents Cash and cash equivalents comprise cash balances with banks and financial institutions maturing within three months, less Bank accounts payable and restricted funds. J. Reinsurance Accounts Reinsurers shares of insurance premiums, paid claims, technical provisions, and all other rights and obligations resulting from reinsurance based on contracts concluded between the Company and reinsurers are accounted for on the accrual basis.

27 30 Jordan International Insurance Company K. Impairment in Reinsurance Assets In case there was any indication as to the impairment of the reinsurance assets of the Company, which possesses the reinsured contracts, the Company has to reduce the present value of the contracts, and record the impairment in the consolidated statement of income. The impairment is recognized in the following cases only: 1. There is objective evidence resulting from an event that took place after the recording of the reinsurance assets confirming the Company s inability to recover all the amounts under the contracts terms. 2. The event has a reliably and clearly measurable effect on the amounts that the Company will recover from reinsurers. l. Acquisition Costs of Insurance Policies Acquisition costs represent the costs incurred by the Company against selling, underwriting, or starting new insurance contracts. The acquisition costs are recorded in the consolidated statement of income. M. Real Estate Investments The real estate investments appear in cost after deduction the accumulated depreciation (except the lands), the real estate investments can be depreciated by 2% of its production life. The impairment is record in the consolidated income statement. In case the fair value of the real estate increases investments which impairment has already been taken in the previous years, the losses can be refunded in which should not exceed the cost or the recorded fair value whichever is less. The real estate investments are evaluated in accordance to the decisions issued by insurance commission and the fair value is disclosed in the real estate investments note. N. Property and Equipment Property and equipment are stated at cost net of accumulated depreciation and accumulated impairment. Moreover, fixed assets are depreciated according to the straight-line method over their estimated useful lives using the following yearly rates; Depreciation is recorded in the consolidated statement of income: Equipment, Furniture, and fixtures Vehicles 15 Buildings 2 %

28 Annual Report When the recoverable values of property and equipment is less than their carrying amounts, assets are written down, and impairment losses are recorded in the consolidated statement of income. The useful lives of property and equipment are reviewed at the end of each year. In case the expected useful life is different from what was determined before, the change in estimate is recorded in the following years, as change in estimate. The gains or losses resulting from the disposal of property and equipment, representing the difference between the property and equipment sale proceeds and their book value, are recorded in the statement of income. Property and equipment are derecognized when disposed of or when there is no expected future benefit from their use or disposal. O. Intangible Assets Intangible assets acquired through merger are recorded at fair value upon their acquisition. Additionally, intangible assets acquired other than through a merger are recorded at cost. Furthermore, intangible assets are classified according to their estimated lives: definite or indefinite. Intangible assets with definite useful lives are amortized over the life of the asset while those with indefinite lives are reviewed for impairment at the date of the financial statements, and the impairment is recorded in the consolidated statement of income. Internally generated intangible assets are not capitalized in the company and its subsidiaries and are taken to the consolidated statement of income in the current year. Indications of impairment in the value of intangible assets are reviewed at the date of the financial statements. Moreover, their lives are reassessed and adjustments are recorded in the subsequent periods. P. Computer Systems and Programs Computer systems and programs are stated at cost upon acquisition and amortized at an annual rate of 25%. Q. Provisions Provisions are recognized when the Company and its subsidiaries has an obligation on the date of the consolidated statement of financial position as a result of past events, it

29 32 Jordan International Insurance Company is probable to settle the obligation, and a reliable estimate of the amount of the obligation can be made. Amounts recognized as provisions represent the best evaluation of the amounts required to settle the obligation as of the consolidated financial statements date, taking into consideration risks and the uncertainty relating to the obligation. When the provision amount is determined on the basis of the expected cash flows for the settlement of the current obligation, its book value represents the present value of these cash flows. When it is expected that some or all of the economic benefits required from other parties to settle the provision will be recovered, the receivable is recognized within assets if receipt of the compensations is actually certain and their value can be reliably measured. First: Technical Provisions Technical provisions are taken and maintained according to the regulations of the Insurance Commission as follows: 1. The provision for unearned premiums for general insurance activities is calculated according to the remaining days up to the expiry date of the insurance policy after the consolidated financial statements date on the basis of a (365) day year except for marine and land transport insurance in which the provision is calculated on the basis of written premiums of the issued policies on the date of the financial statements according to laws, regulations and instructions issued for this purpose. 2. The provision for reported claims is computed by determining the maximum total expected costs for each claim on an individual basis. 3. The incurred but not reported claims are calculated based on the Company s experience and estimation. 4. The unearned premiums provision for life insurance business is calculated based on the company s experience. 5. The life insurance policies mathematical provision is calculated based on actuarial equation, revised periodically by the Actuary Consultant. 6. The premium deficiency provision is calculated based on the company s experience and estimation. Second: Provision for Doubtful Debts A provision for doubtful debts is taken when there is objective evidence that whole or part of these debts has become irrecoverable. The provision is calculated as the difference between the book value and recoverable value. In which the provision calculated on based of approved ratios by the board of directors upon the receivables aging on the date of consolidated financial statements.

30 Annual Report Third: End-of-Service Indemnity Provision End-of-service indemnity provision is calculated based on the internal regulations prepared by the Company and its subsidiaries in accordance with the Jordanian Companies Law. Annual compensations paid to the terminated employees are charged to the end-ofservice indemnity provision when paid. Moreover, an allowance for the company s liabilities in connection with end-of-service compensations is taken for the company and its subsidiaries to the consolidated statement of income. R. Liability Adequacy Test At the consolidated statement of financial position date, the adequacy and suitability of the insurance liabilities are evaluated through the calculation of the present value of the future cash flows relating to the outstanding insurance policies. If the evaluation shows that the present value of the insurance liabilities (various purchase expenses less suitable and related intangible assets) is inadequate compared to the expected future cash flows, the full impairment is recorded in the statement of consolidated income. S. Income Tax Income tax expenses represent accrued taxes and deferred taxes. 1. Accrued Taxes Income tax expenses are accounted for on the basis of taxable income. Moreover, taxable income differs from income declared in the financial statements because the latter includes non-taxable revenue or tax expenses not deductible in the current year but deductible in subsequent years, accumulated losses acceptable by the tax authorities, as well as unallowable and non-taxable items. Taxes are calculated on the basis of the tax rates prescribed tax tares according to the prevailing laws, regulations, and instructions in the Hashemite kingdom of Jordan. 2. Deferred Taxes Deferred taxes are taxes expected to be paid or recovered as a result of temporary timing differences between the value of the assets and liabilities in the consolidated financial statements and the value of the taxable amount. Moreover, deferred taxes are calculated according to the consolidated statement of financial position liability method based on the tax rates expected to be applied at the tax settlement date or the realization of the deferred tax assets or liabilities.