Allianz Saudi Fransi Cooperative Insurance Company (A Saudi Joint Stock Company)

Transcription

1 Allianz Saudi Fransi Cooperative Insurance Company (A Saudi Joint Stock Company) UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS REVIEW REPORT FOR THE THREE AND NINE MONTH PERIODS ENDED 30 SEPTEMBER 2017

2 INDEX PAGES INDEPENDENT AUDITORS REVIEW REPORT 1 INTERIM STATEMENT OF FINANCIAL POSITION 2-3 INTERIM STATEMENT OF INCOME - INSURANCE OPERATIONS 4 INTERIM STATEMENT OF COMPREHENSIVE INCOME - INSURANCE OPERATIONS 5 INTERIM STATEMENT OF INCOME - SHAREHOLDERS OPERATIONS 6 INTERIM STATEMENT OF COMPREHENSIVE INCOME - SHAREHOLDERS OPERATIONS 7 INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY 8 INTERIM STATEMENT OF CASH FLOWS - INSURANCE OPERATIONS 9 INTERIM STATEMENT OF CASH FLOWS - SHAREHOLDERS OPERATIONS 10 NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS 11 28

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13 NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS 1. ORGANIZATION AND PRINCIPAL ACTIVITIES Allianz Saudi Fransi Cooperative Insurance Company (the Company ) is a Saudi Joint Stock Company registered in the Kingdom of Saudi Arabia under commercial registration number dated 26 Jumada Thani 1428H corresponding to 12 July The Company operates through its five branches in the Kingdom of Saudi Arabia as at 30 September 2017 (31 December 2016: 5 branches). The registered office of the Company is located at Al Safwa Commercial Building, P.O Box 3540, Riyadh 11481, Kingdom of Saudi Arabia. The objectives of the Company are to transact cooperative insurance operations and related activities in the Kingdom of Saudi Arabia. The Company was listed on the Saudi stock exchange on 9 Rajab 1428H, corresponding to 23 July COMMERCIAL OPERATIONS The Company has been licensed to conduct insurance business in the Kingdom of Saudi Arabia under cooperative principles in accordance with Royal Decree number 60/M dated 18 Ramadan 1427H (corresponding to 11 October 2006), pursuant to Council of Ministers resolution number 233 dated 16 Ramadan 1427H (corresponding to 9 October 2006). Following the completion of the public offering on 26 March 2007, an application was submitted to His Excellency the Minister of Commerce and Investment (MOCI) in the Kingdom of Saudi Arabia, requesting the announcement of the incorporation of the Company. On 8 Jumada Thani 1428H corresponding to 24 June 2007, MOCI issued a resolution declaring the incorporation of the Company. During March 2008, Saudi Arabian Monetary Authority SAMA granted the Company an authorisation to commence operations. The Company renewed its operating license on 28 Safar 1438H corresponding to 28 November Seasonality The Company operates in an industry where significant seasonal or cyclical variations in operating income are experienced during the financial year. 3. BASIS OF PREPARATION During 2017, SAMA issued a Circular no dated 11 April 2017 and subsequent amendments through certain clarifications relating to the accounting for zakat and tax. As a result of these amendments, zakat and tax for the Company will continue to be accrued on a quarterly basis and recognized in statement of changes in shareholders equity with a corresponding liability recognized in the statement of financial position. Applying the above framework, the interim condensed financial statements of the Company as at and for the quarter ended 30 September 2017 have been prepared using the IAS 34 and SAMA guidance for the accounting of zakat and tax. Until 31 December 2016, the financial statements of the Company were prepared in accordance with IFRS. This change in framework, however, did not result in any change in the Company s accounting policy for zakat and income tax. The interim condensed financial statements do not include all the information and disclosures required in the annual financial statements, and therefore should be read in conjunction with the Company s annual financial statements as at 31 December The Company s Articles of Association require that Separate accounts be maintained for Insurance and Shareholders operations. Income and expenses clearly attributable to either activity are recorded in the respective accounts. The basis of allocation of expenses from joint operations is determined by management and the Board of Directors. In accordance with the Saudi Arabian Insurance Regulations, the Company is required to distribute 10% of net surplus from insurance operations to policyholders and the remaining 90% of the surplus to be transferred to the shareholders operations and losses to be borne by shareholders operations

14 NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (Continued) 4. NEW STANDARDS, AMENDMENTS TO STANDARDS AND INTERPRETATIONS The accounting policies used in the preparation of these unaudited interim condensed financial statements are consistent with those used in the preparation of the annual financial statements for the year ended 31 December 2016 except for the adoption of the following new standards and other amendments to existing standards mentioned below which have had an no significant financial impact on the unaudited interim condensed financial statements of the Company on the current period or prior period and is expected to have no significant effect in future periods. Certain figures for the prior period/year have been reclassified to conform to the presentation made in the current period: Amendments to IASs - Disclosure Initiative applicable from 1 January Amendments to IAS 7 Statement of Cash Flows, which is applicable for annual periods beginning on or after 1 January The amendments require disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flow and non-cash changes. 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 condensed 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 The implementation of IFRS 9 is expected to result in a significant portion of financial assets currently classified as available-for-sale being re-classified as at fair value through profit or loss or fair value through other comprehensive income (OCI). Credit allowances for financial assets carried at amortized cost and debt securities measured at fair value, with changes in fair value recognized in OCI, are expected to increase due to the introduction of the expected credit loss methodology. The Company plans to avail of the exemptions available to insurers and is considering deferring the implementation of IFRS 9 until a later date, but no later than January 1, IFRS 17 - Insurance Contracts IFRS 17 applies to virtually all insurance contracts (including reinsurance contracts) that an entity issues, reinsurance contracts that it holds and investment contracts with discretionary participation features it issues, provided the entity also issues insurance contracts. IFRS 17 was issued in May 2017 and applies to annual reporting periods beginning on or after 1 January The following new or amended standards are not expected to have significant impact on the financial statements. IFRS 15 Revenue from contracts with customers IFRS 16 Leases

15 5 PREMIUMS For the three month period ended 30 September 2017 Unaudited (SR) Reinsurers Gross share Net General insurance 118,427,187 (44,076,523) 74,350,664 Protection and saving insurance 28,709,599 (863,525) 27,846,074 Written premiums 147,136,786 (44,940,048) 102,196,738 Changes in unearned premiums 89,272,656 (31,556,016) 57,716,640 Premiums earned 236,409,442 (76,496,064) 159,913,378 For the three month period ended 30 September 2016 Unaudited (SR) Reinsurers Gross Share Net General insurance 147,910,057 (65,537,773) 82,372,284 Protection and saving insurance 31,605, ,988 32,421,570 Written premiums 179,515,639 (64,721,785) 114,793,854 Changes in unearned premiums 30,276,226 (15,342,120) 14,934,106 Premiums earned 209,791,865 (80,063,905) 129,727,960 For the nine month period ended 30 September 2017 Unaudited (SR) Reinsurers Gross share Net General insurance 564,136,783 (169,250,263) 394,886,520 Protection and saving insurance 109,573,126 (14,899,623) 94,673,503 Written premiums 673,709,909 (184,149,886) 489,560,023 Changes in unearned premiums 20,188,840 (36,580,295) (16,391,455) Premiums earned 693,898,749 (220,730,181) 473,168,568 For the nine month period ended 30 September 2016 Unaudited (SR) Reinsurers Gross Share Net General insurance 491,556,595 (198,591,567) 292,965,028 Protection and saving insurance 118,347,651 (13,914,823) 104,432,828 Written premiums 609,904,246 (212,506,390) 397,397,856 Changes in unearned premiums (19,118,526) (12,172,449) (31,290,975) Premiums earned 590,785,720 (224,678,839) 366,106,

16 6 OUTSTANDING CLAIMS 30 September Unaudited (SR) Reinsurers Gross share Net General insurance 393,900,953 (246,344,113) 147,556,840 Protection and saving insurance 8,912,067 (5,223,241) 3,688,826 Total outstanding claims 402,813,020 (251,567,354) 151,245,666 Gross 31 December Audited (SR) Reinsurers Share Net General insurance 375,880,242 (261,535,321) 114,344,921 Protection and saving insurance 10,249,910 (5,925,028) 4,324,882 Total outstanding claims 386,130,152 (267,460,349) 118,669,803 7 PREMIUMS RECEIVABLE 30 September 2017 (Unaudited) SR 31 December 2016 (Audited) SR Premiums receivable 478,810, ,377,624 Provision for doubtful receivables (41,100,965) (39,333,767) Premiums receivable, net 437,709, ,043,857 The ageing analysis of premiums receivable balances is set out below: 30 September 2017 (Unaudited) Past due but not impaired Past due and impaired Up to 90 days Less than 180 days More than 180 days Amount in SR Premiums receivable from insurance contracts 141,558,235 54,945,682 66,843, ,347,451 Provision for doubtful receivables - (8,244,501) (32,856,464) (41,100,965) Premiums receivable from insurance contracts, net 141,558,235 46,701,181 33,987, ,246,486 Neither past due nor impaired ,572,535 Premiums receivables under fronting arrangements* ,890,764 Premiums receivable, net 141,558,235 46,701,181 33,987, ,709,785 Total

17 7 PREMIUMS RECEIVABLE (continued) Past due but not Past due and impaired impaired 31 December 2016 (Audited) Up to 90 days Less than 180 days More than 180 days Amount in SR Premiums receivable from insurance contracts 84,338,940 44,731,258 57,891, ,962,059 Provision for doubtful receivables - (6,709,689) (32,624,078) (39,333,767) Premiums receivable from insurance contracts, net 84,338,940 38,021,569 25,267, ,628,292 Neither past due nor impaired ,895,387 Premiums receivables under fronting arrangements* ,520,178 Premiums receivable, net 84,338,940 38,021,569 25,267, ,043,857 Total * Premiums receivables under fronting arrangements are insurance contracts under which the Company passes all the risks including the clients credit risk to other insurance/ reinsurance companies. Such arrangements are made between global clients and entities of Allianz Group under which Allianz Saudi Fransi provides the insurance service for the entity located in the Kingdom of Saudi Arabia. Movement in respect of provision for doubtful receivables is as follows: 30 September 31 December (Unaudited) (Audited) SR SR Balance at the beginning of the period / year 39,333,767 41,180,489 Charge / (release) during the period / year 1,767,198 (1,846,722) Balance at the end of the period / year 41,100,965 39,333,767 8 STATUTORY DEPOSIT In compliance with the Insurance Implementing Regulations of SAMA, the Company deposited 10% of its paid up capital, amounting to SR 20 million in a bank designated by SAMA (31 December million). The accrued commission on the deposit as at 30 September 2017 is SR 767,505 (31 December 2016: SR 679,569) and has been disclosed in assets as Return on investment of statutory deposit and the corresponding commission is shown in liabilities as Deferred return on investment of statutory deposit. This deposit cannot be withdrawn without SAMA s consent. The statutory deposit is maintained with Banque Saudi Fransi, a shareholder of the Company and rated A- by Fitch Ratings services. 9 AVAILABLE FOR SALE INVESTMENTS Insurance operations available for sale investments: As at 30 September As at 31 December (Unaudited) (Audited) Quoted SR SR Sukuk Fixed rate 5,000,000 5,000,000 Bonds Floating rate 5,055,766 5,011,110 Bonds Fixed rate 95,505,112 45,339,834 Mutual Funds 4,760,300 4,790,452 Total 110,321,178 60,141,

18 The cumulative unrealised gain in fair value of available for sale investments amounting to SR 371,372 (31 December 2016: loss SR 404,130) is presented within the insurance operations liabilities and surplus in the interim statement of financial position. 9 AVAILABLE FOR SALE INVESTMENTS (continued) Shareholders available for sale investments: 30 September Unaudited (SR) Quoted Unquoted Total Sukuk Floating rate - 20,000,000 20,000,000 Sukuk Fixed rate 16,755,498 25,000,000 41,755,498 Bonds Fixed rate 118,516, ,516,474 Bonds Floating rate - 12,000,000 12,000,000 Mutual Funds 4,848,979-4,848,979 Equities - 3,223,078 3,223,078 Total 140,120,951 60,223, ,344, December Audited (SR) Quoted Unquoted Total Sukuk Floating rate - 25,000,000 25,000,000 Sukuk Fixed rate 31,911,167 25,000,000 56,911,167 Bonds Fixed rate 78,610,062-78,610,062 Bonds Floating rate - 12,000,000 12,000,000 Mutual Funds 4,509,275-4,509,275 Equities - 3,223,078 3,223,078 Total 115,030,504 65,223, ,253,582 The cumulative unrealised gain in fair value of available for sale investments amounting to SR 1,347,872 (31 December 2016: loss SR 908,650) is presented within the shareholders equity in the interim statement of financial position. The available for sale investments comprise of bonds and mutual funds issued by corporate and financial institutions in the Kingdom of Saudi Arabia and GCC countries. As the fair values of the above unquoted Sukuk and equities are not readily available, these investments are carried at cost and reviewed by management for impairment. Credit standing of investments Following is the credit standing of available for sale investments: 30 September 2017 Credit quality Credit Rating Agency Financial Instrument SR (Unaudited) AA S&P/ Moody s Bonds/ Sukuk 12,174,188 A+ S&P Bonds/ Sukuk 109,260,258 A- S&P Sukuk 94,398,404 Unrated Unrated Equities/ Bonds/ Sukuk/ Mutual Funds 94,832,357 Credit quality Credit Rating Agency Financial Instrument 31 December 2016 SR (Audited) AA S&P/ Moody s Bonds/ Sukuk 23,247,365 A+ S&P Bonds/ Sukuk 33,422,886 A- S&P Sukuk 89,123,

19 Unrated Unrated Equities/ Bonds/ Sukuk/ Mutual Funds 94,600,956 9 AVAILABLE FOR SALE INVESTMENTS (continued) Determination of fair value and fair values hierarchy Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or the most advantageous) market between market participants at the measurement date under current market conditions regardless of whether that price is directly observable or estimated using another valuation technique. The fair values of recognised financial instruments are not significantly different from the carrying values included in the interim condensed financial statements. The Company uses the following hierarchy method for determining and disclosing the fair value of financial instruments at the reporting period end. Level 1: Quoted prices in active markets for the same instrument (i.e., without modification or repacking). Level 2: Quoted prices in active markets for similar assets and liabilities or other valuation techniques for which all significant inputs are based on observable market data. Level 3: Valuation techniques for which any significant input is not based on observable market data. and 31 December 2016, the financial instruments under insurance and shareholders operations are measured at fair value using Level 1 hierarchy for bonds and funds which are quoted in stock exchange. The following table shows an analysis of financial instruments under shareholders operations measured at fair value by level of the fair value hierarchy; i. Insurance operations 30 September 2017 Unaudited (SR) Level 1 Level 2 Level 3 Total Bonds and Sukuk 105,560, ,560,878 Mutual Funds 4,760, ,760,300 Total 110,321, ,321, December 2016 Audited (SR) Level 1 Level 2 Level 3 Total Bonds and Sukuk 55,350, ,350,944 Mutual Funds 4,790, ,790,452 Total 60,141, ,141,396 ii. Shareholders operations 30 September 2017 Unaudited (SR) Level 1 Level 2 Level 3 Total Bonds 135,271,972 57,000, ,271,972 Mutual Funds 4,848, ,848,979 Total 140,120,951 57,000, ,120,

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21 9 AVAILABLE FOR SALE INVESTMENTS (continued) 31 December Audited (SR) Level 1 Level 2 Level 3 Total Bonds 110,521,229 62,000, ,521,229 Mutual Funds 4,509, ,509,275 Total 115,030,504 62,000, ,030,504 There were no transfers between Level 1 and Level 2 fair value measurements during the period ended 30 September 2017 and year ended 31 December The unlisted available for sale securities as at 30 September 2017 amounting to SR 3,223,078 (December 2016: SR 3,223,078) is not evidenced by a quoted price in an active market for an identical asset or based on a valuation technique that uses only data from observable markets. The management believes that the carrying amounts of these securities are not materially different from their carrying values. 10 UNIT LINKED INVESTMENTS Following represents fair value for unit-linked investments: 30 September 2017 (Unaudited) SR 31 December 2016 (Audited) SR Local funds 566,808, ,078,698 Foreign funds 17,860,239 19,572, ,668, ,651,654 Unit Linked are related to investments in unit linked funds. The Company has established unit linked liabilities which excluding some timing differences and reserves, matches exactly with the policyholder s unit linked investments. The fair value of unit linked investments are measured based on the net assets value provided by fund manager. As the values of these investments are available from the market, the Company uses Level 1 hierarchy for determining and disclosing the fair value of above unit linked investments. 11 SHARE CAPITAL The authorised and issued share capital of the Company is SR 200 million divided into 20 million shares of SR 10 each (31 December 2016: SR 200 million divided into 20 million shares of SR 10 each). The founding shareholders of the Company have subscribed and paid for 13 million shares with a nominal value of SR 10 each, which represents 65% of the shares of the Company's capital and the remaining 7 million shares with a nominal value of SR 10 each have been subscribed by general public. 12 STATUTORY RESERVE In accordance with the by-laws of the Company and in compliance with Article 70 (2) (g) of Insurance Implementing Regulation issued by SAMA, the Company shall allocate 20% of its net income each year after accumulated losses to the statutory reserve until it has built up a reserve equal to the share capital. 13 CONTINGENCIES The Company operates in the insurance industry and is subject to legal proceedings in the normal course of business relating to policyholders insurance claims. While it is not practicable to forecast or determine the final results of all pending or threatened legal proceedings, management does not believe that such proceedings (including litigations) will have a material effect on its financial position and results as at and for the period ended 30 September

22 14 RELATED PARTY TRANSACTIONS AND BALANCES Following are the details of related party transactions during the period ended 30 September 2017 and 30 June 2016 and the related affiliate s balances as at 30 September 2017 and 31 December 2016: a) Related party transactions: Related party Nature of transaction For the nine month ended 30 September 2017 (Unaudited) SR For the nine month ended 30 September 2016 (Unaudited) SR Entities controlled, jointly controlled or significantly influenced by related parties. -Insurance premiums written 97,988,209 60,472,863 -Insurance premiums ceded 41,806,755 72,329,182 -Gross claims paid 28,253,592 29,784,180 -Reinsurance share of claims paid 18,739,460 38,202,645 -Commission expense 2,527,833 2,689,908 -Commission income 3,281,017 5,322,469 Other expenses: -Third party administrator (TPA) fees 4,750,301 4,592,989 Key management personnel -Remuneration and related expenses 4,372,904 4,368,900 Board members -Fees and related expenses 837, ,194 Key management personnel are persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly and comprise top management executives including the Chief Executive Officer, Deputy Chief Executive Officer and the Chief Financial Officer of the Company. All Unit Linked investments and certain significant available for sale investments are managed by an affiliate, Saudi Fransi Capital. Cash and cash equivalents include bank accounts, the majority of which are maintained with one of the shareholders of the Company, Banque Saudi Fransi. b) Related party balances: The significant amounts with the related parties are included in the following balances as at the financial position date: 30 September 2017 (Unaudited) SR 31 December 2016 (Audited) SR Entities controlled, jointly controlled or significantly influenced by related parties. - Accrued expenses 7,837,889 5,421,643 - Premiums receivable, net 43,750,020 34,802,671 - Reinsurance balances payable 4,671,102 11,874,423 - Outstanding claims 9,962,243 8,888,

23 14 RELATED PARTY TRANSACTIONS AND BALANCES (continued) Related parties include Allianz SNA, Allianz Mena Holding Bermuda, Allianz Risk Transfer A.G. Dubai, Allianz France, Allianz Global Corporate and Speciality AG, Allianz World Wide Care, Allianz Global risks U.S Insurance, Allianz Belgium, Euler Hermes, Allianz SE Zurich, Allianz Insurance Hong Kong, Allianz Global Risks Netherland, Allianz Insurance Singapore, Allianz Insurance New Zealand, Saudi Fransi Insurance Agency, Banque Saudi Fransi, Saudi Fransi Leasing Company, Saudi Next Care, Saudi Fransi Capital. 15 BASIC AND DILUTED EARNINGS PER SHARE For the three month period ended 30 September 2017 (Unaudited) For the three month period ended 30 September 2016 (Unaudited) For the nine month period ended 30 September 2017 (Unaudited) For the nine month period ended 30 September 2016 (Unaudited) Net income for the period 7,975,086 6,308,595 24,587,908 19,359,520 Weighted average number of ordinary shares 20,000,000 20,000,000 20,000,000 20,000,000 Basic and diluted earnings per share (SR) PREMIUM DEFICIENCY RESERVE The Company has created a provision in respect of premium deficiency reserve for its medical and motor business. The Company created this reserve based on the assumption that the unearned premiums will not be sufficient to provide for the expected claims and other attributable expenses related to the unexpired periods of policies in force at the statement of financial position date. 17 ZAKAT AND INCOME TAX PROVISION A summary of the Company s share capital and percentages of ownership are follows: 30 September December September 2016 SR % SR % SR % Saudi and GCC Shareholders 114,760, % 114,360, % 114,760, % Non-Saudi and GCC Shareholders 85,240, % 85,640, % 85,240, % Total 200,000, % 200,000, % 200,000, %, 31 December 2016 and 30 September 2016, the authorized, issued and fully paid-in share capital of the Company consists of 20 million shares of SR 10 each. The Company s zakat and income tax calculations and corresponding accruals and payments of zakat and income tax are based on the above ownership percentages in accordance with the relevant provisions of the Saudi Arabian zakat and income tax regulations. The zakat and income tax provision as at the period / year end is as follows: 30 September December September 2016 SR SR SR Provision for zakat 16,900,082 14,211,920 13,831,903 Provision for income tax 1,963,876 1,853,974 1,399,474 Total 18,863,958 16,065,894 15,231,377 The zakat and income tax charge for the period / year end is as follows: 30 September December September 2016 SR SR SR Zakat for the period / year 1,963,876 3,509,169 2,619,339 Income tax for the period / year 3,062,803 1,853,974 1,399,474 Total 5,026,679 5,363,143 4,018,

24 17 ZAKAT AND INCOME TAX PROVISION (continued) Status of assessments The Company has filed tax and zakat declarations for the years ended 31 December 2008 to 31 December 2016 and the assessments for these years are still outstanding. The Company has filed appeals against the General Authority for Zakat and Tax (GAZT) assessments of additional zakat arising from disallowance of long term investments from zakat base for the years 2010, 2011, 2012 and The Company has accounted for the additional zakat provision in the financial statements, however has not paid the same. 18 SEGMENT INFORMATION Consistent with the Company s internal reporting process, operating segments have been approved by Management in respect of the Company s activities, assets and liabilities. Information disclosed in the note is based on current reporting to the chief operating decision maker. Segment assets do not include insurance operations cash and cash equivalents, prepaid expenses, due from shareholders operations and property and equipment. Accordingly they are included in unallocated assets. Segment liabilities do not include reinsurers balances payable, employees end of service benefits, accrued expenses and other liabilities. Accordingly they are included in unallocated liabilities. The unallocated assets and unallocated liabilities are reported to chief operating decision maker on the cumulative basis and not reported under the related segments. Operating segments Following are the operating segments identified for segment reporting purposes; Motor : Motor corporate and motor individual Engineering : Construction Medical : Medical Property : Fire, Burglary and Money Other general : Liability and Marine Protection and Saving : Group Retirement and Individual Protection and Saving

25 18 SEGMENT INFORMATION (continued) For the three month period ended 30 September 2017 (Unaudited) Protection and Shareholders Motor Engineering Medical Property Other General Saving Operations Total SR SR SR SR SR SR SR SR Gross written premiums 52,633,861 8,173,402 29,499,307 20,990,155 7,130,462 28,709, ,136,786 Reinsurance premiums ceded (1,159,774) (6,567,344) (16,584,282) (16,510,309) (3,254,814) (863,525) - (44,940,048) Net written premiums 51,474,087 1,606,058 12,915,025 4,479,846 3,875,648 27,846, ,196,738 Net premiums earned 105,391,200 3,037,480 10,164,733 5,999,441 5,611,323 29,709, ,913,378 Unrealized gain on unit linked investments ,246,145-3,246,145 Net claims incurred (84,596,642) 420,151 (6,981,911) (640,215) (1,372,936) (31,148,006) - (124,319,559) Change in premium deficiency reserve - - (2,333,287) (2,333,287) Change in unit linked liabilities ,989,070-3,989,070 Commission expenses, net (8,045,924) 1,125,427 (811,932) 1,736,738 (825,103) (1,302,571) - (8,123,365) Inspection and supervision fees (263,169) (40,867) (147,497) (104,950) (474,193) - - (1,030,676) Net underwriting results 12,485,465 4,542,191 (109,894) 6,991,014 2,939,091 4,493,839-31,341,706 Other income ,617,082 General and administrative expenses (25,598,363) Net surplus for the period 7,360,425 Net insurance operations surplus after shareholders appropriation for the period (736,043) Shareholders total revenue ,516,992 1,516,992 General and administrative expenses (166,288) (166,288) Net income for the period 7,975,

26 18 SEGMENT INFORMATION (continued) For the nine month period ended 30 September 2017 (Unaudited) Protection and Shareholders Motor Engineering Medical Property Other General Saving Operations Total SR SR SR SR SR SR SR SR Gross written premiums 326,013,570 30,922,982 62,747,936 95,304,695 49,147, ,573, ,709,909 Reinsurance premiums ceded (3,405,092) (23,526,069) (32,959,562) (77,367,567) (31,991,973) (14,899,623) - (184,149,886) Net written premiums 322,608,478 7,396,913 29,788,374 17,937,128 17,155,627 94,673, ,560,023 Net premiums earned 294,136,748 10,012,532 41,054,187 17,426,461 18,023,208 92,515, ,168,568 Unrealized gain on unit linked investments ,053,930-13,053,930 Net claims incurred (225,463,157) (1,675,809) (36,117,291) (2,787,405) 499,663 (100,230,095) - (365,774,094) Change in premium deficiency reserve - - (2,251,037) (2,251,037) Change in unit linked liabilities ,388,559-12,388,559 Commission expenses, net (21,872,842) 154,503 (3,220,594) (994,363) (3,626,408) (3,057,599) - (32,617,303) Inspection and supervision fees (1,630,068) (154,615) (313,740) (476,523) (1,847,555) - - (4,422,501) Net underwriting results 45,170,681 8,336,611 (848,475) 13,168,170 13,048,908 14,670,227-93,546,122 Other income ,487,933 General and administrative expenses (75,711,167) Net surplus for the period 23,322,888 Net insurance operations surplus after shareholders appropriation for the period (2,332,289) Shareholders total revenue ,260,007 4,260,007 General and administrative expenses (662,698) (662,698) Net income for the period 24,587,

27 18 SEGMENT INFORMATION (continued) Motor Engineering Medical Property Other General Protection and Saving Shareholders Operations Total (Unaudited) SR SR SR SR SR SR SR SR Insurance Operations Assets Reinsurers share of unearned premiums 32,049 96,204,325 25,059,390 43,341,455 25,345,261 9,897, ,880,202 Reinsurers share of outstanding claims 3,880,051 98,197,896 15,753,108 67,732,385 60,780,673 5,223, ,567,354 Deferred policy acquisition costs 13,300,673 2,874,978 2,571,742 4,843,812 1,464,453 (455,141) - 24,600,517 Premiums receivable, gross 140,173,647 88,423,417 53,830,961 47,614, ,156,870 10,611, ,810,750 Provision for doubtful debts (41,100,965) Unit linked investments ,668, ,668,635 Unallocated assets ,849,889 Shareholders assets ,149, ,149,378 Total assets 2,033,425,760 Insurance Operations Liabilities Unearned premiums 180,376, ,943,741 51,902,564 53,628,307 32,670,932 16,546, ,068,448 Outstanding claims 117,129, ,301,715 31,506,216 74,897,287 68,066,283 8,912, ,813,020 Unearned commission income 4,968 4,108,758-5,057,902 1,095, ,170-10,708,671 Unit linked liabilities ,318, ,318,012 Unallocated liabilities and surplus ,368,231 Total Shareholders liabilities and equity ,149, ,149,378 Total insurance operations liabilities, surplus and shareholders liabilities and equity 2,033,425,760 25

28 18 SEGMENT INFORMATION (continued) Motor Engineering Medical Property Other General Protection and Saving Shareholders Operations Total SR SR SR SR SR SR SR SR For the three month period ended 30 September 2016 Gross written premiums 58,245,914 35,282,650 27,626,533 16,931,963 9,822,997 31,605, ,515,639 Reinsurance premiums ceded (509,659) (32,283,348) (13,418,115) (14,116,958) (5,209,693) 815,988 - (64,721,785) Net written premiums 57,736,255 2,999,302 14,208,418 2,815,005 4,613,304 32,421, ,793,854 Net premiums earned 65,710,447 3,884,418 12,680,361 6,862,231 7,526,218 33,064, ,727,960 Unrealized gain on unit linked investments (2,476,749) - (2,476,749) Net claims incurred (59,984,528) (70,016) (8,229,615) (1,254,907) (3,556,494) (28,759,027) - (101,854,587) Change in unit linked liabilities ,889,544-5,889,544 Commission expenses,net (5,455,412) (1,058,928) (1,428,490) (855,391) (484,278) (817,935) - (10,100,434) Inspection and supervision fees (291,229) (176,413) (138,133) (84,659) (325,381) (158,028) - (1,173,843) Net underwriting results (20,722) 2,579,061 2,884,123 4,667,274 3,160,065 6,742,090-20,011,891 Other income ,474,017 General and administrative expenses (16,172,084) Net surplus for the period 6,313,824 Net insurance operations surplus after shareholders appropriation for the period (631,382) Shareholders total revenue (887,209) (887,209) General and administrative expenses (261,056) (261,056) Net income for the period 6,308,

29 18 SEGMENT INFORMATION (continued) Motor Engineering Medical Property Other General Protection and Saving Shareholders Operations Total SR SR SR SR SR SR SR SR For the nine month period ended 30 September 2016 Gross written premiums 206,518,099 58,309,197 82,510,319 98,913,485 45,305, ,347, ,904,246 Reinsurance premiums ceded (2,017,591) (48,525,323) (39,595,698) (81,617,779) (26,835,176) (13,914,823) - (212,506,390) Net written premiums 204,500,508 9,783,874 42,914,621 17,295,706 18,470, ,432, ,397,856 Net premiums earned 176,064,709 11,176,434 38,707,535 18,861,575 18,380, ,915, ,106,881 Unrealized gain on unit linked investments ,351,352-2,351,352 Net claims incurred (152,114,306) (1,907,537) (25,529,464) (1,024,433) (5,880,467) (97,732,694) - (284,188,901) Change in unit linked liabilities ,647,035-11,647,035 Commission expenses,net (14,160,164) (5,362,546) (4,803,654) 3,470,250 (517,516) (3,507,629) - (24,881,259) Inspection and supervision fees (1,032,590) (291,546) (412,552) (494,567) (1,051,631) (591,738) - (3,874,624) Net underwriting results 8,757,649 3,614,805 7,961,865 20,812,825 10,931,092 15,082,248-67,160,484 Other income ,682,607 General and administrative expenses (53,382,434) Net surplus for the period ,460,657 Retained in insurance operations (1,946,066) Shareholders total revenue ,541,394 2,541,394 General and administrative expenses (696,465) (696,465) Net income for the period 19,359,

30 18 SEGMENT INFORMATION (continued) Motor Engineering Medical Property Other General Protection and Saving Shareholders Operations Total As at 31 December 2016 (Audited) SR SR SR SR SR SR SR SR Insurance Operations Assets Reinsurers share of unearned premiums 293, ,206,909 29,100,130 37,235,341 30,898,109 6,726, ,460,497 Reinsurers share of outstanding claims 3,785, ,046,361 20,185,536 54,463,180 69,054,877 5,925, ,460,349 Deferred policy acquisition costs 11,636,494 3,487,406 1,948,609 3,740,909 1,822,035 (546,429) - 22,089,024 Premiums receivable, gross 110,232,068 92,593,267 71,187,083 33,128, ,147,577 11,089, ,377,624 Provision for doubtful debts (39,333,767) Unit linked investments ,651, ,651,654 Unallocated assets ,838,421 Shareholders assets ,150, ,150,114 Total assets 1,994,693,916 Insurance Operations Liabilities Unearned premiums 152,166, ,561,943 67,209,116 47,011,526 39,091,363 11,216, ,257,288 Outstanding claims 78,417, ,455,997 40,371,072 60,418,188 78,217,580 10,249, ,130,152 Unearned commission income 45,558 6,121,791-4,143,671 1,334, ,873-11,951,608 Unit linked liabilities ,706, ,706,572 Unallocated liabilities and surplus ,498,182 Total shareholders liabilities and equity ,150, ,150,114 Total insurance operations liabilities, surplus and shareholders liabilities and equity 1,994,693,

31 18 SEGMENT INFORMATION (continued) Geographical segments The Company, during the three and nine month periods ended 30 September 2017 and year ended 31 December 2016 operated only in the Kingdom of Saudi Arabia. 19 APPROVAL OF THE INTERIM CONDENSED FINANCIAL STATEMENTS These interim condensed financial statements have been approved by the Board of directors on 05 Safar 1439H, corresponding to 25 October