Post on 18-Mar-2018
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
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
Allianz Saudi Fransi Cooperative Insurance Company (A Saudi Joint Stock Company)
- 11 -
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS As at 30 September 2017
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 1010235601 dated 26 Jumada Thani 1428H
corresponding to 12 July 2007. 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 2007.
2. 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 2016.
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. 381000074519 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 2016.
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.
Allianz Saudi Fransi Cooperative Insurance Company (A Saudi Joint Stock Company)
- 12 -
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (Continued) As at 30 September 2017 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 2017.
Amendments to IAS 7 – “Statement of Cash Flows”, which is applicable for annual periods beginning on or after 1
January 2017. 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, 2021.
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 2021.
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
Allianz Saudi Fransi Cooperative Insurance Company (A Saudi Joint Stock Company)
- 13 -
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (continued) As at 30 September 2017
5 PREMIUMS
For the three month period ended 30 September 2017
Unaudited (SR)
Gross
Reinsurers’
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)
Gross
Reinsurers’
Share
Net
General insurance 147,910,057 (65,537,773) 82,372,284
Protection and saving insurance 31,605,582 815,988 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)
Gross
Reinsurers’
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)
Gross
Reinsurers’
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) 366,106,881
════════ ════════ ════════
-12-
Allianz Saudi Fransi Cooperative Insurance Company (A Saudi Joint Stock Company)
- 14 -
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (continued) As at 30 September 2017
6 OUTSTANDING CLAIMS
30 September 2017 - Unaudited (SR)
Gross
Reinsurers’
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
═════════ ═════════ ═════════
31 December 2016 - Audited (SR)
Gross
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 478,810,750 451,377,624
Provision for doubtful receivables (41,100,965) (39,333,767)
───────── ─────────
Premiums receivable, net 437,709,785 412,043,857
═════════ ═════════
The ageing analysis of premiums receivable balances is set out below:
Past due but not
impaired Past due and impaired
Total 30 September 2017
(Unaudited) 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
66,843,534
263,347,451
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
33,987,070
222,246,486
Neither past due nor impaired - - - 65,572,535
Premiums receivables under
fronting arrangements*
-
-
-
149,890,764
Premiums receivable, net 141,558,235 46,701,181 33,987,070 437,709,785
Allianz Saudi Fransi Cooperative Insurance Company (A Saudi Joint Stock Company)
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NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (continued) As at 30 September 2017
7 PREMIUMS RECEIVABLE (continued)
* 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
2017 2016
(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 2016 20 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
2017 2016
(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 60,141,396
═════════ ═════════
Past due but not
impaired Past due and impaired
Total 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
57,891,861
186,962,059
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
25,267,783
147,628,292
Neither past due nor impaired - - - 131,895,387
Premiums receivables under
fronting arrangements*
-
-
-
132,520,178
Premiums receivable, net 84,338,940 38,021,569 25,267,783 412,043,857
Allianz Saudi Fransi Cooperative Insurance Company (A Saudi Joint Stock Company)
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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.
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (continued) As at 30 September 2017
9 AVAILABLE FOR SALE INVESTMENTS (continued)
Shareholders’ available for sale investments:
30 September 2017 - 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 118,516,474 - 118,516,474
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 60,223,078 200,344,029
═════════ ═════════ ═════════
31 December 2016 - 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 65,223,078 180,253,582 ════════ ════════ ═════════
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:
Credit quality
Credit Rating
Agency Financial Instrument
30 September 2017
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 89,123,771
Allianz Saudi Fransi Cooperative Insurance Company (A Saudi Joint Stock Company)
- 17 -
Unrated Unrated Equities/ Bonds/ Sukuk/
Mutual Funds 94,600,956
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (continued) As at 30 September 2017
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.
As at 30 September 2017 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 105,560,878 - - 105,560,878
Mutual Funds 4,760,300 - - 4,760,300
──────── ──────── ──────── ────────
Total 110,321,178 - - 110,321,178
════════ ════════ ════════ ════════
31 December 2016 –Audited (SR)
Level 1 Level 2 Level 3 Total
Bonds and Sukuk 55,350,944 - - 55,350,944
Mutual Funds 4,790,452 - - 4,790,452
──────── ──────── ──────── ────────
Total 60,141,396 - - 60,141,396
════════ ════════ ════════ ════════
ii. Shareholders’ operations
30 September 2017 – Unaudited (SR)
Level 1 Level 2 Level 3 Total
Bonds 135,271,972 57,000,000 - 192,271,972
Mutual Funds 4,848,979 - - 4,848,979
──────── ──────── ──────── ────────
Total 140,120,951 57,000,000 - 197,120,951
════════ ════════ ════════ ════════
Allianz Saudi Fransi Cooperative Insurance Company (A Saudi Joint Stock Company)
- 19 -
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (continued) As at 30 September 2017
9 AVAILABLE FOR SALE INVESTMENTS (continued)
31 December 2016 -Audited (SR)
Level 1 Level 2 Level 3 Total
Bonds 110,521,229 62,000,000 - 172,521,229
Mutual Funds 4,509,275 - - 4,509,275
──────── ──────── ──────── ────────
Total 115,030,504 62,000,000 - 177,030,504
════════ ════════ ════════ ════════
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 2016.
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 566,808,396 573,078,698
Foreign funds 17,860,239 19,572,956 ──────── ────────
584,668,635 592,651,654 ════════ ════════
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 2017.
Allianz Saudi Fransi Cooperative Insurance Company (A Saudi Joint Stock Company)
- 20 -
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (continued) As at 30 September 2017
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 837,257 883,194
───────── ─────────
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
8,888,775
───────── ─────────
Allianz Saudi Fransi Cooperative Insurance Company (A Saudi Joint Stock Company)
- 21 -
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (continued) As at 30 September 2017
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) 0.40 0.32 1.23 0.97
══════════ ══════════ ══════════ ══════════
16 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 2017 31 December 2016 30 September 2016
SR % SR % SR %
Saudi and GCC Shareholders 114,760,000 57.38% 114,360,000 57.18% 114,760,000 57.38%
Non-Saudi and GCC Shareholders 85,240,000 42.62% 85,640,000 42.82% 85,240,000 42.62%
Total 200,000,000 100% 200,000,000 100% 200,000,000 100%
As at 30 September 2017, 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 2017 31 December 2016 30 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 2017 31 December 2016 30 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 4,018,813
Allianz Saudi Fransi Cooperative Insurance Company (A Saudi Joint Stock Company)
- 22 -
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (continued) As at 30 September 2017
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 2013. 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
Allianz Saudi Fransi Cooperative Insurance Company (A Saudi Joint Stock Company)
- 23 -
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (continued) As at 30 September 2017
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 2017 (Unaudited)
Gross written premiums 52,633,861 8,173,402 29,499,307 20,990,155 7,130,462 28,709,599 - 147,136,786
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 27,846,074 - 102,196,738
Net premiums earned 105,391,200 3,037,480 10,164,733 5,999,441 5,611,323 29,709,201 - 159,913,378
Unrealized gain on unit linked investments - - - - - 3,246,145 - 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 - - - - - 3,989,070 - 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 - - - - - - - 1,617,082
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 - - - - - - 1,516,992 1,516,992
General and administrative expenses - - - - - - (166,288) (166,288)
Net income for the period 7,975,086
Allianz Saudi Fransi Cooperative Insurance Company (A Saudi Joint Stock Company)
- 24 -
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (continued) As at 30 September 2017
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 2017 (Unaudited)
Gross written premiums 326,013,570 30,922,982 62,747,936 95,304,695 49,147,600 109,573,126 - 673,709,909
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 94,673,503 - 489,560,023
Net premiums earned 294,136,748 10,012,532 41,054,187 17,426,461 18,023,208 92,515,432 - 473,168,568
Unrealized gain on unit linked investments - - - - - 13,053,930 - 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 - - - - - 12,388,559 - 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 - - - - - - - 5,487,933
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 - - - - - - 4,260,007 4,260,007
General and administrative expenses - - - - - - (662,698) (662,698)
Net income for the period 24,587,908
Allianz Saudi Fransi Cooperative Insurance Company (A Saudi Joint Stock Company)
25
18 SEGMENT INFORMATION (continued)
Motor Engineering Medical Property Other General
Protection and
Saving
Shareholders’
Operations Total
As at 30 September 2017 (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 9,897,722 - 199,880,202
Reinsurers’ share of outstanding claims 3,880,051 98,197,896 15,753,108 67,732,385 60,780,673 5,223,241 - 251,567,354
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 47,614,825 138,156,870 10,611,030 - 478,810,750
Provision for doubtful debts - - - - - - - (41,100,965)
Unit linked investments - - - - - 584,668,635 - 584,668,635
Unallocated assets - - - - - - - 271,849,889
Shareholders’ assets - - - - - - 263,149,378 263,149,378
Total assets 2,033,425,760
Insurance Operations’ Liabilities
Unearned premiums 180,376,429 103,943,741 51,902,564 53,628,307 32,670,932 16,546,475 - 439,068,448
Outstanding claims 117,129,452 102,301,715 31,506,216 74,897,287 68,066,283 8,912,067 - 402,813,020
Unearned commission income 4,968 4,108,758 - 5,057,902 1,095,873 441,170 - 10,708,671
Unit linked liabilities - - - - - 581,318,012 - 581,318,012
Unallocated liabilities and surplus - - - - - - - 336,368,231
Total Shareholders’ liabilities and equity - - - - - - 263,149,378 263,149,378
Total insurance operations liabilities,
surplus and shareholders’ liabilities and
equity 2,033,425,760
Allianz Saudi Fransi Cooperative Insurance Company (A Saudi Joint Stock Company)
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (continued) As at 30 September 2017
- 26 -
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (continued) As at 30 September 2017
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 31,605,582 - 179,515,639
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 32,421,570 - 114,793,854
Net premiums earned 65,710,447 3,884,418 12,680,361 6,862,231 7,526,218 33,064,285 - 129,727,960
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 - - - - - 5,889,544 - 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 - - - - - - - 2,474,017
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 6,308,595
Allianz Saudi Fransi Cooperative Insurance Company (A Saudi Joint Stock Company)
- 27 -
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 45,305,495 118,347,651 - 609,904,246
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 18,470,319 104,432,828 - 397,397,856
Net premiums earned 176,064,709 11,176,434 38,707,535 18,861,575 18,380,706 102,915,922 - 366,106,881
Unrealized gain on unit linked
investments - - - - - 2,351,352 - 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 - - - - - 11,647,035 - 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 - - - - - - - 5,682,607
General and administrative expenses - - - - - - - (53,382,434)
Net surplus for the period - - - - - - - 19,460,657
Retained in insurance operations - - - - - - - (1,946,066)
Shareholders’ total revenue - - - - - - 2,541,394 2,541,394
General and administrative expenses - - - - - - (696,465) (696,465)
Net income for the period 19,359,520
Allianz Saudi Fransi Cooperative Insurance Company (A Saudi Joint Stock Company)
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (continued) As at 30 September 2017
- 28 -
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (continued) As at 30 September 2017
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 293,920 132,206,909 29,100,130 37,235,341 30,898,109 6,726,088 - 236,460,497
Reinsurers’ share of outstanding claims 3,785,367 114,046,361 20,185,536 54,463,180 69,054,877 5,925,028 - 267,460,349
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 33,128,003 133,147,577 11,089,626 - 451,377,624
Provision for doubtful debts - - - - - - - (39,333,767)
Unit linked investments - - - - - 592,651,654 - 592,651,654
Unallocated assets - - - - - - - 225,838,421
Shareholders’ assets - - - - - - 238,150,114 238,150,114
Total assets 1,994,693,916
Insurance Operations’ Liabilities
Unearned premiums 152,166,570 142,561,943 67,209,116 47,011,526 39,091,363 11,216,770 - 459,257,288
Outstanding claims 78,417,405 118,455,997 40,371,072 60,418,188 78,217,580 10,249,910 - 386,130,152
Unearned commission income 45,558 6,121,791 - 4,143,671 1,334,715 305,873 - 11,951,608
Unit linked liabilities - - - - - 593,706,572 - 593,706,572
Unallocated liabilities and surplus - - - - - - - 305,498,182
Total shareholders’ liabilities and equity - - - - - - 238,150,114 238,150,114
Total insurance operations liabilities,
surplus and shareholders’ liabilities and
equity 1,994,693,916
Allianz Saudi Fransi Cooperative Insurance Company (A Saudi Joint Stock Company)
- 29 -
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (continued) As at 30 September 2017
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 2017.