MetLife AIG ANB Cooperative Insurance Co. announces its Interim Financial Results for the Period Ending on 2019-09-30 ( Nine Months )
| Element List | Current Quarter | Similar quarter for previous year | %Change | Previous Quarter | % Change |
|---|---|---|---|---|---|
| Gross Written Premiums (GWP) | 8,046 | 15,720 | -48.816 | 17,540 | -54.127 |
| Net Written Premiums (NWP) | 1,346 | -1,097 | - | 7,965 | -83.101 |
| Net Incurred Claims | -4,015 | -27,007 | -85.133 | 355 | - |
| Net Profit (Loss) of Policy Holders Investment | 209 | 955 | -78.115 | 265 | -21.132 |
| Profit (Loss) Insurance Operations Minus Policy Holders Investments Revenues (Operations Results) | -3,271 | 1,241 | - | -186 | 1,658.602 |
| Net Profit (loss) of Shareholders Capital Investment | 854 | 935 | -8.663 | 1,089 | -21.579 |
| Net Profit (Loss) before Zakat | -5,028 | 2,753 | - | 560 | - |
| Total Comprehensive Income | -5,428 | 2,273 | - | 144 | - |
| All figures are in (Thousands) Saudi Arabia, Riyals | |||||
| Element List | Current Period | Similar period for previous year | %Change |
|---|---|---|---|
| Gross Written Premiums (GWP) | 53,640 | 142,069 | -62.243 |
| Net Written Premiums (NWP) | 17,910 | 90,817 | -80.279 |
| Net Incurred Claims | -12,590 | -153,276 | -91.786 |
| Net Profit (Loss) of Policy Holders Investment | 754 | 2,620 | -71.221 |
| Profit (Loss) Insurance Operations Minus Policy Holders Investments Revenues (Operations Results) | -11,437 | -18,623 | -38.586 |
| Net Profit (loss) of Shareholders Capital Investment | 2,931 | 3,190 | -8.119 |
| Net Profit (Loss) before Zakat | -11,668 | -14,123 | -17.382 |
| Total Comprehensive Income | -12,742 | -15,563 | -18.126 |
| Total Share Holders Equity (after Deducting Minority Equity) | 141,125 | 162,006 | -12.889 |
| Profit (Loss) per Share | -0.71 | -0.86 | |
| All figures are in (Thousands) Saudi Arabia, Riyals | |||
| Accumulated Losses | Capital | Percentage % | |
|---|---|---|---|
| -39,250 | 180,000 | -21.81 | |
| All figures are in (Thousands) Saudi Arabia, Riyals | |||
| Element List | Explanation |
|---|---|
| Increase (Decrease) in Net Profit for Current Quarter Compared to the Same Quarter of the Previous Year is Attributed to | The Company achieved a net loss before zakat of SR 5,028 thousand for the third quarter 2019 versus a net profit before zakat of SR 2,753 thousand for the third quarter 2018 with a negative variance of SR 7,781 thousand due to the following:
1- reduction in net underwriting income by SR 9,149 thousand mainly due to reduction in net earned premiums under Medical and Motor lines of business, 2- reduction in investment income from policyholders and shareholders together by SR 835 thousands; offset by 3- reduction in doubtful debt expense by SR 1,879 thousands, 4- reduction in General and Administrative Expenses by SR 324 thousands. |
| Increase (Decrease) in Net Profit for Current Quarter Compared to the Previous Quarter is Attributed to | The Company achieved a net loss before zakat of SR 5,028 thousand for the current quarter 2019 versus net profit before zakat of SR 560 thousand for the previous quarter of current year with a negative variance of SR 5,588 thousand due to:
1- reduction in net underwriting income by SR 7,294 thousand mainly due to reduction in net earned premiums under Medical and Motor lines of business in addition to increase in claims incurred under these lines, 2- increase in general and administration expense by SR 1,334 thousands due to higher cost incurred for the merger project, 3- reduction in investment income from policyholders and shareholders together by SR 445 thousands; offset by 4- reduction in doubtful debt expense by SR 3,485 thousands. |
| Increase (Decrease) in Net Profit for Current Period Compared to the Same Period of the Previous Year is Attributed to | Net Losses before Zakat for the nine month period of 2019 have decreased over the losses of similar period of 2018 by SR 2,455 thousand (17.38%) mainly due to:
1- improvement in net underwriting income by SR 585 thousand due to corrective measures taken by the Company during 2018 to strengthen the control over the claims processing function in addition to applying adequate pricing and underwriting strategy, 2- reduction in doubtful debt expense by SR 2,372 thousands, 3- reduction in General and Administrative Expenses by SR 1,484 thousands; offset by 4- reduction in investment income from policyholders and shareholders together by SR 1,986 thousands. |
| Basis of the External Auditor's Opinion | Emphasis of Matter paragraph |
| Modification, Qualification or Emphasis of a Matter as Stated within the External Auditor Opinion | We draw attention to Note 2b to the interim condensed financial information, which indicates, among other things, that on 28 May 2019, the Company announced on Tadawul indicating that its accumulated losses reached 21% of its share capital of SAR 180 million as of 30 April 2019. As of 30 September 2019, the accumulated losses represent 21.81% (31 December 2018: 14.65%) of the Company’s share capital. These events and conditions indicate a material uncertainty on the Company’s ability to continue as a going concern. However, various strategic options were considered by management to ensure the going concern of the Company. Among such strategic options, on 29 September 2019, the Boards of Directors of the Company and of Walaa Cooperative Insurance Company (“Walaa”) reached an agreement (the “Merger Agreement”) for potential merger. Under the terms of the Merger Agreement, Walaa proposed to acquire all the shares issued by Metlife AIG ANB by exchanging shares and without paying any cash payment to the shareholders of the Company. Pursuant to this Merger Agreement, Company will merge with Walaa and by law, all the rights, obligations, assets and liabilities of the Company will be transferred to Walaa in exchange of new shares issued in the capital of Walaa in favor of the shareholders of Company representing 18.32% of the shares of Walaa.
The proposed merger is subject to the approval of the respective regulatory authorities along with the extra ordinary general meetings of both the Companies. Meanwhile, the Company intends to continue to conduct business as usual until completion of the proposed merger. The Company’s management has made an assessment of its ability to continue as a going concern and is satisfied that the Company’s operations shall continue for the foreseeable future under normal course of the business. Our conclusion is not qualified in respect of this matter. |
| Reclassification of Comparison Items | Starting from the quarter ended 30 June 2019, Zakat is being accrued at end of each financial reporting period and recognized in consolidated statement of income with a corresponding liability recognized in the consolidated statement of financial position in accordance with International Financial Reporting Standard (IFRS) and other standards and pronouncements endorsed by SOCPA. In addition to the above, some items have been re-classified. |
| Additional Information | Net profit/(loss) after zakat for the 3-month and 9-month period ended 30 September 2019 was SAR -5,428 thousands and SAR -12,868 thousand respectively, (30 September 2018: SAR 2,273 thousand and SAR -15,563 thousand respectively). |
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