|Reasons of increase (decrease) for the quarter compared with same quarter last year
||The decline in result in the second quarter of 2016, versus the second quarter of 2015, was mainly due to higher bad debt provision expense and increase in operational expenses to support the year on year increase in business growth. There was also an increase in the new underwriting result by SR18,888K, a 6% increase, which could not offset the increase in expenses. The net claims to net earned premium ratio has increase in the second quarter of 2016 compared to the same period of 2015 (2016 Q2 at 81.1% versus 2015 Q2 at 79.8%) which was due to claims inflation which could not be covered yet by pricing. The losses were partially offset by Cooperative Distribution reduced by SR2,956K due to the reduced surplus from Insurance Operations, at SR100,973K for the current quarter versus the SR130,538K for the previous quarter, a reduction of 23% and investment income which increased by SR13,406k, 223%. Gross Written Premium (GWP) were lower by SR63,652K in the second quarter of 2016, versus the second quarter of 2015, a decrease of 3%, and net earned premiums were higher by SR215,130K, an increase of 13%.
|Reasons of increase (decrease) for the period compared with same period last year
||The improvement in results for the six (6) month period ended 30th June 2016, versus the same period of 2015, was mainly due to strong business growth, in the current year first two quarters and the second half of 2015, resulting in higher net earned premium and higher net underwriting result despite the higher net claims incurred to net earned premium ratio (2016 year to date Q2 at 83.2% versus 2015 year to date Q2 at 82.8%). The net underwriting result gains were partially offset by an increase in growth related operational expenses, such as commissions and levies, as well as by the Cooperative Distribution expense of SR18,527K for year to date 2016 Q2, versus year to date 2015 Q2 at SR16,974K due to higher 2016 year to date Q2 surplus from Insurance operations. Gross Written Premium (GWP) increased by SR302,928K, an increase of 8%, and the net underwriting result for the six month period ended 30th June 2016, versus the same period of 2015, improved by SR85,929K, representing an increase of 16%. The improvement in net earned premium by SR583,810K represented an increase of 19%, versus the same period of 2015. Investment income improved by SR18,983K which represented an increase of 156% versus the same period of 2015. The surplus from Insurance Operations increased by SR15,527, a surplus of SR185,266K from Insurance Operations for the period ended 30th June 2016, versus a surplus from Insurance Operations of SR169,739K for the same period of 2015 an increase of 9%.
|Reasons of increase (decrease) for the quarter compared with the previous quarter
||The improvement in result in the second quarter of 2016, versus the first quarter of 2016, was mainly due to lower claims in the second quarter of 2016 (due to seasonality of claims, as reflected by the net claims incurred to net earned premium ratio (2016 Q2 at 81.1% versus 2016 Q1 at 85.2%)) which resulted in an increase in net underwriting result by SR74,456K, an increase of 27%. There was also a decrease in commissions and levies expenses impacted by the seasonality of the Gross Written Premium GWP, GWP higher in Q1 2016. This was partially offset by an increase in Selling and Marketing expenses and General and Administrative expenses, required to support the growth. GWP were lower by SR618,308K in the second quarter of 2016, a reduction of 25% versus the first quarter of 2016, due to the seasonality of the GWP being higher in the first quarter.
|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 within the annual financial results have been re-classified for comparative reasons.
||The earnings per share (EPS) for the period ended 31-06-2016 (three months and six months) for the previous year, of SR1.42 and SR1.87 per share, has been calculated based on the new number of shares in issue after the Capital increase, to 80,000,000 (eighty million) shares, as was approved during the Extraordinary General Assembly meeting of its shareholders, held Monday 25th of Safar 1437H (Monday 7th December 2015G). The prior year EPS re-statement is as reflected within the interim financial results and in accordance with the relevant International Accounting Standards.