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Bupa Arabia for Cooperative Insurance Co. announces the interim financial results for the period ending on 31-03-2016 (Three Months)

Element Current quarter Similar quarter for previous year % Change current Previous quarter % Change previous
Net profit (loss) before Zakat 72,636 36,771 97.54 209,327 -65.3
Surplus (deficit) of insurance transactions less returns of policy holders investment (operating transactions results) 72,539 33,024 119.66 216,608 -66.51
Gross written premiums (GWP) 2,446,029 2,079,449 17.63 1,099,994 122.37
Net written premiums (NWP) 2,434,340 2,073,269 17.42 1,075,879 126.27
Net incurred claims 1,604,087 1,302,447 23.16 1,437,009 11.63
Net profit (loss) of policy holders investment 11,754 6,177 90.29 11,643 0.95
Net profit (loss) of shareholders capital investment 69 3,040 -97.73 4,010 -98.28
Earning or loss per share, Riyals 0.91 0.46 - - -
All figures are in (Thousands) Saudi Arabia, Riyals
Element EXPLAINATION
Reasons of increase (decrease) for the quarter compared with same quarter last year The improvement in results for the three (3) month period ended 31st March 2016, versus the same period of 2015, was mainly due to strong business growth, resulting in a higher net earned premium and, combined with an improved, lower, net claims incurred to net earned premium ratio (2016 Q1 at 85.2% versus 2015 Q1 at 86.0%) resulting in a higher net underwriting result. The net underwriting result gains were supported by a higher bad debt provision reversal during the first quarter of 2016, versus the same period of 2015, but were offset by an increase in growth related operational expenses, such as staff costs, commission and levies, an increase in the Cooperative Distribution expense due to the higher surplus from insurance operations. Gross Written Premium (GWP) increased by SR366,580K, an increase of 18%, and the net underwriting result for the three month period ended 31st March 2016, versus the same period of 2015, improved by SR67,040K, representing an increase of 32%. The improvement in underwriting result was partially offset by an increase in expenses of SR27,430K, representing an increase of 15%, and the increased Cooperative Distribution expense of SR4,509K, representing an increase of 115%. The improvement in net earned premium, by SR368,680K, represented an increase of 24%, versus the same period of 2015. The surplus from Insurance Operations increased by SR45,092K to a surplus of SR84,293K from Insurance Operations for the period ended 31st March 2016, representing an increase of 115% versus the surplus from Insurance Operations of SR39,201K for the same period of 2015. Investment income also improved, up by SR2,606K to SR11,823K, representing an increase of 28%, versus the SR9,217K for the same period of 2015.
Reasons of increase (decrease) for the quarter compared with the previous quarter The decline in result in the first quarter of 2016, versus the fourth quarter of 2015, was mainly due to higher claims in the first quarter of 2016 (due to seasonality of claims, as reflected by the net claims to net earned premium ratio, 2016 Q1 at 85.2% versus 2015 Q4 at 79.3%) which resulted in a decrease in net underwriting result of SR96,569K, a 26% decrease. There was also an increase in selling and marketing expenses driven by commissions and levies impacted by the seasonality of the Gross Written Premium (GWP) growth (Combined Q1 expense of SR81,842K versus Q4 2015 expense of SR60,278k, an increase of SR21,564K, representing an increase of 36% versus the previous quarter). This was partially offset by Cooperative Distribution reduced by SR14,396K due to the reduced surplus from Insurance Operations, at SR84,293K for the current quarter versus the SR228,251K for the previous quarter, a reduction of 63%. Gross Written Premium (GWP) were higher by SR1,346,035K in the first quarter of 2016, versus the fourth quarter of 2015, an increase of 122%, and net earned premiums were higher by SR70,509K, an increase of 4%.
External auditor's report containing reservation The joint auditors interim review report on the financial statements mentions that the financial statements have been prepared in accordance with International Accounting Standard 34 and not in accordance with the Standard of interim financial reporting issued by SOCPA. However the company assures that there are no significant differences in the results contained within the financial statements due to using International Accounting Standards rather than the SOCPA accounting standards.
Reclassifications in quarterly financial results Some numbers have been re-classified for comparative reasons

The Capital Market Authority and the Saudi Stock Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.

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