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MetLife AIG ANB Cooperative Insurance Co. announces the interim financial results for the period ending on 30-06-2018 (Six Months)

METLIFE AIG ANB 8011 -7.74% 14.30 -1.20
Element Current quarter Similar quarter for previous year % Change current Previous quarter % Change previous
Net profit (loss) before Zakat -1,289 -3,242 60.24 -15,589 91.73
Surplus (deficit) of insurance transactions less returns of policy holders investment (operating transactions results) -2,747 -4,516 39.17 -17,120 83.95
Gross written premiums (GWP) 25,836 87,983 -70.64 100,513 -74.3
Net written premiums (NWP) 15,997 63,116 -74.65 75,917 -78.93
Net incurred claims -50,791 -41,835 -21.41 -75,479 32.71
Net profit (loss) of policy holders investment 898 478 87.87 767 17.08
Net profit (loss) of shareholders capital investment 1,093 1,382 -20.91 1,162 -5.94
All figures are in (Thousands) Saudi Arabia, Riyals
Element Current period Similar period for previous year % Change
Net profit (loss) before Zakat -16,876 -10,110 -66.92
Surplus (deficit) of insurance transactions less returns of policy holders investment (operating transactions results) -19,865 -12,713 -56.26
Gross written premiums (GWP) 126,349 191,303 -33.95
Net written premiums (NWP) 91,914 150,777 -39.04
Net incurred claims -126,267 -79,917 -58
Net profit (loss) of policy holders investment 1,665 781 113.19
Net profit (loss) of shareholders capital investment 2,255 2,762 -18.36
Earning or loss per share, Riyals -0.94 -0.56 -
All figures are in (Thousands) Saudi Arabia, Riyals
Element EXPLAINATION
Reasons of increase (decrease) for the quarter compared with same quarter last year Net Losses before Zakat for the second quarter 2018 have decreased over the second quarter 2017 by SR 1,953 thousand (60.24%) mainly due to:
1- Reduction in doubtful debt expense by SR 4,584 thousand.
2- Increase in investments returns for Policyholders' and Shareholders' operations together by SR 131 thousand, offset by:
3- Decrease in net underwriting result by SR 933 thousand due to higher Net Claim Incurred
4- Increase in General and Administrative Expenses by SR 1,829 thousand.
Reasons of increase (decrease) for the period compared with same period last year Net Losses before Zakat for the period ended 2018 have increased over the same period 2017 by SR 6,766 thousand (66.92%) mainly due to: 1- Decrease in net underwriting result by SR 14,480 thousand due to higher Net Claim Incurred, offset by: 2- Reduction in Doubtful debt expense by SR 7,302 thousand 3- Increase in investments returns for Policyholders' and Shareholders' operations together by SR 377 thousand.
Reasons of increase (decrease) for the quarter compared with the previous quarter Net Losses before Zakat for the second quarter 2018 have decreased over the previous quarter this year by SR 14,300 thousand (91.73%) mainly due to:
1- Improvement in net underwriting result by SR 17,097 thousand due to Lower Net Claim Incurred,
2- Reduction in Doubtful debt expense by SR 463 thousand, and
3- Increase in investments returns for both Policyholders' and Shareholders' operations together by SR 62 thousand, offset by:
4- Increase in general and administration expenses by SR 3,322 thousand.
External auditor's report containing reservation External Auditors have drawn attention to Note 2 to the interim condensed financial information, which indicates that on 26 March 2018 the Company announced on Tadawul that as of 28 February 2018, its accumulated losses exceeded its share capital by 51.62%. Further, on 18 April 2018, in an Extraordinary General Assembly Meeting, it was resolved to reduce the Company share capital by 48.57% from SR 350 million to SR 180 million. Accordingly the Company absorbed SR 170 million of accumulated losses against its share capital of 17 million shares. Subsequent to the reduction, the accumulated losses represent 11 % of the Company share capital as of June 30, 2018.
On 29 March 2018, the Company received a final warning letter from SAMA indicating issues related to delays in medical claims processing, ineffective risk assessments and weaknesses in internal control functions among other things. Further, SAMA instructed the Company to hire an independent consultant to identify weaknesses and provide recommendations and report back to SAMA within a stipulated time. Furthermore, SAMA required the Company to provide detailed report and updates on weekly basis. The Company has taken necessary actions to comply with SAMA warning letter and have received the report from the consultant. Based on the report, Company has developed an action plan and submitted to SAMA dated 28 June 2018. These conditions raise material uncertainty on the Company ability to continue as a going concern. Further, the management is in the process of developing a new business plan under different scenarios which is under review by the Board of Directors of the Company. Based on the plan, the Company management has made an assessment of its ability to continue as a going concern and is satisfied that the Company operations shall continue for foreseeable future under normal course of the business. Accordingly the interim condensed financial information has been prepared on the going concern basis and do not include any adjustments, which may be required, if the Company is not able to continue as going concern.
Our conclusion is not qualified in respect of the above matter.
Other notes 1- Loss per share has been computed for the current period and the same period of last year by using 18 million shares which is the weighted average number of shares outstanding as the end of the period.
2- Total equity ( there is no minority interest ) as at the end of current period is SR 159,733 thousands versus SR 225,895 thousands for similar period of previous year with a decrease of 29.29%.
3- Total comprehensive losses for current quarter is SAR 1,289 thousands compared to SAR 3,242 thousands for same quarter last year with a decrease of 60.24%, and compared to SAR 15,589 thousand in previous quarter which represents a decrease in losses by 91.73%. Also Total comprehensive losses for current period is SR 16,876 thousand compared to SAR 10,110 thousand for the same period of last year with an increase of 66.92%.
4- Accumulated losses as at 30 June 2018 is SAR 20,267 thousand representing 11.26 % of share capital.

5. The external auditor reviewed the financial statements and issued emphasis of matter.

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