arab reinsurance company · - 1 - table of contents 2-3 x letter from the chairman 4 x board of...
TRANSCRIPT
ARAB REINSURANCE COMPANY
ANNUAL REPORT 2012
- 1 -
Table of Contents Letter from the Chairman 2-3
Board of Directors 4
Management 5
The Board of Directors’ Report as at 31/12/2012 6-11
Shareholders 12-13
Independent Auditor’s Report 14-15
Statement of Financial Position as at 31/12/2012 16
Statement of Comprehensive Income 17
Statement of Changes in Equity 18
Statement of Cash Flows 19 Notes to the Financial Statements 20-54
- 2 -
LETTER FROM THE CHAIRMAN Dear Shareholders, It gives me pleasure to present to you the report of the Company’s activities for the financial year ended on December 31, 2012; including its main achievements on all fronts: technical, financial, investment and administrative. Initially, it is imperative to mention the political events that took place in some Arab countries and their adverse repercussions on these countries’ own economies, as well as the regional ones; which were also further affected by the ongoing global economic and financial crisis. Thanks to its executive management’s strategy, following the guidelines of the Board of Directors, we are proud to say that your Company managed to largely reduce the direct negative impact of these circumstances. The Company continues to realize sound financial results; driven by its consistent policy of retaining proper technical, financial and contingency reserves, and its sound selection of secure and profitable investment channels. It is worth mentioning that the reserves are allocated periodically with high professionalism and accuracy, based on historic statistics and advanced actuarial studies. Accordingly, the Company’s most important developments for year 2012 are as follows:
1- The Company’s portfolio attained a 26% growth despite the economic slow-down mentioned above. In addition, the Company started to cede “Takaful” business under its Takaful window and has supported the Arab insurance markets with modern products and services.
2- The Company continued achieving sound investment results whereby the annual
average return reached 6.13%. This is considered a great accomplishment in light of the economic condition prevailing in the world for the past four years, amid low interest rates and the fluctuations of the exchange rates, bonds and stock market.
The Company has additionally contributed in the establishment of a financial assets’ management company, which positive primary results began to show. It has also invested in a health insurance services’ company.
3- The Company's executive management continued to renew and update its organizational structure, via updating the authorities and responsibilities of the heads of departments. External and internal expert personnel were employed in these departments. The management, with the encouragement of the Board, has also developed a comprehensive career development program that included all its employees and through which intensified training has been offered.
- 3 -
The management maintained its development of the financial reports and statements, following the international accounting standards, whereby it underwent a drastic restructuring of the Company’s software in order to upkeep the preparation of advanced financial reports in proper and timely fashion.
4- The Company upheld its B+ stable outlook rating which is a positive indicator on the Company’s position and solvency, in the midst of the above-mentioned economic conditions that affected many companies, and despite the sovereign rating of Lebanon, which acts as a drag to Arab Re’s rating through AM Best.
Finally, I would like to thank our clients for their trust in our Company and their increased cooperation, as well as our Shareholders for their ongoing support to the Company's activities. Additionally, I would like to thank the Board of Directors’ members, as well as the Audit, Sharia, Risk, and Investment Committees, and the management and staff of the Company, for their rewarding efforts, leading to the growth of the Company's business and the increase of its financial solvency.
Khaldoun Barakat
Chairman
- 4 -
Board of Directors Chairman Sheikh Khaldoun Barakat
(Saudi Arabia) Vice-Chairman Mr. Tanous Feghali
Chairman and General Manager General Insurance Company for the Near East Al Ittihad Al Watani (Lebanon)
Member Mr. Khaled El-Hasan
Managing Director & CEO Gulf Insurance Company (Kuwait)
Member Mr. Seba Hadj Mohamed
Chairman and General Manager Companie Centrale de Réassurance (Algeria)
Member Mr. Abdallah R. Ibraheem
Chairman and General Manager Iraq Reinsurance Company (Iraq)
Member Mrs. Lamia Ben Mahmoud
President – General Manager Tunis Reinsurance Company (Tunisia)
Member Mr. Samer Barakat
Assistant General Manager Itjar Trading Company (Saudi-Arabia)
Member Mr. Mohamed Wally
Delegated Member Libya Insurance Company (Libya)
Member Mrs. Amany Elmahy
General Manager Inward Reinsurance Division Misr Insurance Company (Egypt)
- 5 -
Management Sheikh Khaldoun Barakat Chairman Mr. Tanous Feghali
Vice-Chairman Mr. Ronald Chidiac General Manager Mr. Salim Kojok Assistant Administration General Managers
Mr. Zouhair Daoud
Finance Ms. Basma Barakat
Technical Mr. Mohamed Naji Ahmad Managers Claims Mr. Mohamed Hammoud
Technical Mr. Ibrahim Yassin Internal Auditing Mrs. Hala Saleh
Human Resources Mr. Hussein Mallouk Finance
Mr. Nehme Araman Arab Manager Reinsurance Pool
- 6 -
REPORT OF THE BOARD OF DIRECTORS for the Financial Year ending on December 31, 2012
Dear Shareholders, The Board of Directors of Arab Reinsurance Company is pleased to submit to you its Annual Report for the period ended December 31, 2012; where you can find details on the technical, financial, investment, and administrative achievements of the Company. You will also find enclosed the audited financial statements; encompassing the balance sheet, the income statement, the changes in shareholders’ equity, and the cash flow statement, together with a summary of the significant accounting policies adopted, as well as other explanatory notes. The reports and statements were prepared in accordance with the international financial reporting standards. The adaptation necessitated a rapid strategic development pertaining to our information technology systems, which enabled the Company to prepare its transparent financial statements with accuracy placing us in line with internationally developed companies. The Company continued to achieve positive results, with a net profit of USD 7.8 million this year. This was attained in spite of the political unstable situation prevailing in some neighboring Arab countries, as well as the worldwide tough economic state that has affected the growth rates in general. The diversified investment portfolio of the Company, geographically and by type, along with the wise and conservative investment policy, has contributed in realizing a good investment return amounting to USD 8 million, with an average rate of 6.13%. The Company invested, in collaboration with an expert entity, in the establishment of a financial assets' management company. It has also invested in a health insurance services’ company. Both entities yielded very good results, which reflected positively on the results of our Company. On another note, and in spite of the economic and political situation aforementioned, the Company’s business portfolio grew to USD 72.6 million, compared to USD 57.5 million in year 2011, which triggered a positive effect on the results as a whole. This achievement is a reflection of the successful underwriting policy adopted by the Company, and as advised by the Board of Directors. The said policy stipulates to increase the participation in profitable Arab business, to expand in some foreign markets, and to intensify marketing efforts through market visits, product development and other services rendered with high professionalism, in accordance with the market requirements and conditions. On this occasion, the Company is studying the financial and practical possibility of opening a branch/representative or administrative office outside Lebanon.
- 7 -
The Company was assigned a B+ (stable outlook) rating by AM Best rating agency. This is a positive indicator in light of the economic state as a whole, which affected the business portfolio and results of many companies. Added to this is the rating agency’s inability to forgo the current sovereign rating of Lebanon. In fact, the executive management is deploying all efforts to improve the Company’s rating level, by increasing and diversifying our business portfolio, and by achieving better technical results, while maintaining a good and adequate level of solvency. The Company upheld its persistence in developing; diversifying and training its human resources. Its mission is to develop the job descriptions and processes while providing the staff with ample training opportunities. This enhances the staff’s competence, their technical capabilities and their job performance, while improving the work environment by strengthening human relations and enriching the performances and loyalty levels. Finally, we would like to express to our clients and to our shareholders and Board members our sincere gratitude and our appreciation for their support and cooperation. We would also like to take this opportunity to pay tribute to the labors and admirable performance of our staff, may God bless all their efforts and ours. Meanwhile, we are pleased to submit to you our audited financial statements relating to our Company's results for the year ended December 31, 2012, compared to the audited financial statements relating to year 2011 results.
Board of Directors
- 8 -
Main indicators and developments of the Company’s activities in year 2012
First: Underwriting Activities A. Gross Written Premiums
The gross written premiums at the end of the year amounted to USD 72.6 million, compared to USD 57.5 million in the previous financial year; an increase of 26.1%. This increase is because the Company is accepting new business and introducing new products, as well as accepting the takaful insurance business. 67% of these premiums emanated from the Arab region. The following table shows the GWP for each class of business:
Written Premiums
Currency: US Dollars
Branch 2012 Branch % 2011 Branch
%
Increase/ (Decrease)
% Fire 27,462,831 37.9% 21,665,881 37.6% 26.8 % Accidents 22,696,572 31.3% 17,163,463 29.8% 32.2 % Engineering 11,489,794 15.8% 9,905,192 17.2% 16.0 % Total Non-Marine 61,649,198 85.0% 48,734,536 84.6% 26.5 % Cargo 6,848,071 9.4% 5,668,697 9.9% 20.8 % Hull 3,118,841 4.3% 2,758,756 4.8% 13.1 % Aviation 48,120 0.1% 9,219 0.02% 422.0 % Total Marine 10,015,032 13.8% 8,436,672 14.7% 18.7 % Life 887,151 1.2% 377,863 0.7% 134.8 % Total 72,551,381 100 % 57,549,071 100 % 26.1 %
2012 2011
- 9 -
B. Retained Premiums
The Company’s retention levels differ from one line of business to the other; however, in most cases its retention is protected by appropriate Excess of Loss covers. Retained premiums in all classes during the period under consideration amounted to USD 57.1 million, representing 79% of the Gross Written Premiums, compared to USD 48.2 million in the previous year, which represented 84% of the Gross Written Premiums. The increase in retention level this year is due to the increase in the accepted business. However, the decrease in retention level is a result of the increase in our retrocessionaires’ shares, whilst continuing to re-visit the adequacy of its excess of loss covers that protects it from large losses as well as catastrophic events. C. Commissions & Acquisition Costs
This section includes the original commissions, profit commissions, reinsurance brokerages and other reinsurance related deductions. The total amount paid during the period under review amounted to USD 19.7 million, compared to USD 15.1 million in the previous year. The percentage of acquisition costs this year was equivalent to 27% of GWP, with a minor difference than prior year equivalent to 1%. This low level is maintained due to the inward's business results and increase acceptance of non-proportional covers, which are characterized by lower commissions.
D. Incurred Losses
The total incurred losses during the year under consideration amounted to USD 41.4 million, compared to USD 38.3 million in the previous year, representing an increase of 8%. The Company’s net retained loss ratio was 65.1% this year, compared to 67.7% last year. This decrease is due to the increase in net earned premiums, and the absence of major losses as last year.
E. Results of Financial Year
In 2012, net profits amounted to USD 7.8 million, compared to USD 5.5 million in the previous year, representing 10.7% of the gross written premiums, compared to 9.5% in year 2011. The percentage of these results from the net written premiums is equal to 13.6% this year, compared to 11.4% in the previous year.
F. Combined Loss Ratio
The Combined Loss Ratio for this year reached 97.5% compared to 100.3%, despite the maintained administrative and operational expenses. This is due to the growth in business portfolio and decrease in incurred claims this year.
- 10 -
Second: Investments Invested funds during this year amounted on average to USD 131 million, compared to USD 116 million in the previous year. This development is due mainly to the decisions of the Board of Directors to raise gradually the Company's capital, which reached USD 75 million at the end of last year. Moreover, the return on investment this year amounted to USD 8 million; thus, effectively to what was budgeted at the beginning of the financial year and which is equivalent to USD 8.2 million, despite the economic difficulties, and the decline in international interest rates. This was possible due to our rational and conservative investment policy and its diversification geographically and by type; which decreased our investment and financial risks. The above was accomplished while upholding our commitment to our clients and our policy to prompt claim payments. It shall be noted that the invested funds include cash at banks, term deposits in banks, and nonresident financial institutions, in addition to investments in securities and fixed assets. Third: General & Administrative Expenses The General and Administrative expenses amounted this year to USD 4.6 million, representing 6.3% of the gross written premiums, compared to 7.9% in the previous year. The expenses' rate from the earned and retained premiums is equivalent to 8%, compared to 9.5% in the previous year. This regression is due to the increase in business portfolio, without a decrease in the general and administrative expenses. Fourth: Allotments of Financial Year Result The Board of Directors, in its meeting held on February 28, 2013, decided to distribute the net income of the financial year ended December 31, 2012, subject to the approval of the General Assembly of the Company’s Shareholders, as follows: US Dollars Net income for the year 7,762,651 Proposed allotments: 1- Transfer to capital reserve at 10% 776,265 2- Distribution of dividends at 5% of paid up capital as at December 31, 2012 as a first payment according to Company’s by-laws 3,750,000 3- Distribution of dividends at 3% of paid up capital as at December 31, 2012 as an additional payment 2,250,000 Total proposed allotments 6,776,265 Net balance (after proposed allotments) to be transferred to the retained earnings accounts 986,386
- 11 -
According to Article 60 of the Company’s by-laws, 10% of the annual net income should be transferred to capital reserve until the total of this reserve becomes equal to the Company’s capital. This reserve includes the legal reserve required according to Article 165 of the Lebanese Code of Commerce. This reserve is not available for distribution to Shareholders.
Annual Progress of the Company’s Profits
(Amended)
Board of Directors
- 12 -
Shareholders
Bahrain
Barakat Gulf Ventures
Bahrain National Holding co.
Lebanon
La Phénicienne Compagnie d'Assurance
Al Ittihad Al Watani
Saudi Arabian Insurance Company
United Commercial Assurance
Arabia Insurance Company
Banque Misr Liban
The Middle East Ins. & Re Co.
Amana Insurance Company
Mr. Tannous Feghali
Egypt
Misr For Insurance Life
Misr Insurance Company
Syria
Syrian Insurance Company
Libya
Libya Insurance Company
Kuwait
Gulf Insurance Company
Kuwait Insvestment Authority
Al Ahleia Insurance Company
Morocco
Société Centrale de Réassurance
La Mutuelle Agricole Marocaine d'Ass.(MAMDA)
- 13 -
Iraq
Iraq Reinsurance Company National Insurance Company Iraq Insurance Company
Tunisia
Société Tunisienne de Réassurance Société Tunisienne d'Ass. & de Réass. Compagnie Méditerranéenne d'Assurances et de
Réassurances (Comar) Groupe des Assurances de Tunisie Astrée Compagnie d'Ass. & de Réass. Mutuelle Générale d'Assurances Ministère de Finance - Direction des Ass. Compagnie d'Ass. & de Réass. Tuniso-Européenne
Algeria
Compagnie Centrale de Réassurance
Kingdom of Saudi Arabia
Trade Union Insurance Company Sheikh Khaldoun Barakat Itjar Trading Est.
Jordan
Al Manara Insurance Arab Union Int'l Ins. Co. The United Insurance Company Jerusalem Insurance Company Jordan Insurance Co. Midde East Insurance Company Arab Bank The National Ahlia Ins. Co.
United Arab Emirates
Al Ain Ahlia Insurance Company Sharjah Insurance Company
Sudan
The National Reinsurance Company
PricewaterhouseCoopers, Saba House Bldg., Block B/C, Said Freiha Str., Hazmieh, Lebanon P.O. Box 11-3155, Beirut, Lebanon, Telephone +961 (5) 428600, Facsimile +961 (5) 951797, www.pwc.com/middle-east
Independent Auditor's Report to the shareholders of Arab Reinsurance Company S.A.L.
Report on the financial statements
Management's responsibility for the financial statements
Auditor's responsibility
-14-
Independent Auditor's Report (continued) to the shareholders of Arab Reinsurance Company S.A.L.
Opinion
-15-
ARAB REINSURANCE COMPANY S.A.L.
Statement of financial position as at 31 December 2012
2012US$
Assets 2,781,779
631,406191,000
9,045,94459,662,161
8,409,955
7,182,239 -64,217,99421,545,025
58,852,048 2,710,874
Total assets 235,230,425
Equity and liabilities Equity
75,000,0004,500,000
10,846,590(521,917)
14,334,732
Total equity 104,159,405
Liabilities 111,065,443
2,501,215190,006
17,174,036140,320
Total liabilities 131,071,020
Total equity and liabilities 235,230,425
-16-
ARAB REINSURANCE COMPANY S.A.L.
Statement of comprehensive income for the year ended 31 December 2012
2012US$
66,602,653(13,136,770)
Net insurance premium revenue 53,465,8838,034,4233,982,669
242,561
Net income 65,725,536
(40,741,247)
5,919,718
Net insurance claims (34,821,529) 18,335,335)(4,595,031)
Expenses (57,751,895)
Profit before tax 7,973,641(210,990)
Profit for the year 7,762,651Other comprehensive income for the year
575,383
Total comprehensive income for the year 8,338,034
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-18-
Statement of cash flows for the year ended 31 December 2012
2012US$
Cash flows from operating activities 4,701,781
Cash flows from investing activities (49,604)(76,000)
Net cash used in investing activities (125,604)
Cash flows from financing activities (3,750,000)
-
Net cash (used in) provided from financing activities (3,750,000)
Net increase (decrease) in cash and cash equivalents 826,177 Cash and cash equivalents at beginning of year 1,884,696
Cash and cash equivalents at end of year 2,710,873
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ARAB REINSURANCE COMPANY S.A.L.
Notes to the financial statementsfor the year ended 31 December 2012
1 General information
2 Summary of significant accounting policies
2.1 Basis of presentation
2.2 Adoption of new and revised IFRS
(a) New and amended standards effective for the financial year beginning 1 January 2012
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ARAB REINSURANCE COMPANY S.A.L.
2 Summary of significant accounting policies (Continued)
2.2 Adoption of new and revised IFRS (continued)
(b) New standards and interpretations not yet adopted
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ARAB REINSURANCE COMPANY S.A.L.
2 Summary of significant accounting policies (continued)
2.3 Foreign currency translation
(a) Functional and presentation currency
(b) Transactions and balances
2.4 Property and equipment
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ARAB REINSURANCE COMPANY S.A.L.
2 Summary of significant accounting policies (continued)
2.4 Property and equipment (continued)
2.5 Investment properties
.
2.6 Intangible Assets
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ARAB REINSURANCE COMPANY S.A.L.
2 Summary of significant accounting policies (continued)
2.7 Financial assets
2.7.1 Classification
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ARAB REINSURANCE COMPANY S.A.L.
2 Summary of significant accounting policies (continued)
2.7 Financial assets (continued)
2.7.2 Recognition and measurement
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ARAB REINSURANCE COMPANY S.A.L.
2 Summary of significant accounting policies (continued)
2.7 Financial assets (continued)
2.7.3 Determination of fair value
2.8 Reclassification of financial assets
-26-
ARAB REINSURANCE COMPANY S.A.L.
2 Summary of significant accounting policies (continued)
2.9 Impairment of financial assets
-27-
ARAB REINSURANCE COMPANY S.A.L.
2 Summary of significant accounting policies (continued)
2.9 Impairment of financial assets (continued)
2.10 Offsetting financial instruments
2.11 Dividend distribution
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ARAB REINSURANCE COMPANY S.A.L.
2 Summary of significant accounting policies (continued)
2.12 Retirement benefit obligations
2.13 Cash and cash equivalents
2.14 Share capital
2.15 Current income tax
2.16 Investment income
2.17 Insurance contracts
(a) Recognition and measurement
-29-
ARAB REINSURANCE COMPANY S.A.L.
2 Summary of significant accounting policies (continued)
2.17 Insurance contracts (continued)
(a) Recognition and measurement (continued)
(b) Deferred acquisition costs
-30-
ARAB REINSURANCE COMPANY S.A.L.
2 Summary of significant accounting policies (continued)
2.17 Insurance contracts
(c) Reinsurance contracts held
(d) Receivables and payables related to insurance contracts
2.18 Comparative figures
-31-
ARAB REINSURANCE COMPANY S.A.L.
3 Critical accounting estimates and judgements
(a) The ultimate liability arising from claims under insurance contracts
(b) Estimated premium revenue
(c) Process used to decide on assumptions
4 Management of insurance and financial risk
4.1 Insurance risk
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ARAB REINSURANCE COMPANY S.A.L.
4 Management of insurance and financial risk (Continued)
4.1 Insurance risk (continued)
As at 31 December 2012In US$
Type of risk Fire Engineering Marine Motor Other Total
38,720,573 27,219,628 15,541,050 11,268,945 18,315,247 111,065,44327,578,067 18,129,881 14,564,456 11,268,945 17,979,069 89,520,418
As at 31 December 2011In US$
Type of risk Fire Engineering Marine Motor Other Total
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ARAB REINSURANCE COMPANY S.A.L.
4 Management of insurance and financial risk (continued)
4.1 Insurance risk (continued)
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ARAB REINSURANCE COMPANY S.A.L.
4 Management of insurance and financial risk (continued)
4.2 Financial risk
4.2.1 Market risk
Effective interest rate 2012
%
7.35.50.5
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ARAB REINSURANCE COMPANY S.A.L.
4 Management of insurance and financial risk (continued)
4.2 Financial risk (continued)
4.2.2 Market risk (continued)
-36-
Financial assets at fair value through profit and loss 7,182,239 - - - 7,182,239
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ARAB REINSURANCE COMPANY S.A.L.
4 Management of insurance and financial risk (continued)
4.2 Financial risk (continued)
4.2.2 Credit risk
2012US$
64,177,31921,545,02559,662,16158,852,0482,705,712
Total assets bearing credit risk 206,942,265
2012US$
2,450,0001,075,218
11,860,816159,901,365
Total 175,287,39931,654,866
206,942,265
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In
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-39-
ARAB REINSURANCE COMPANY S.A.L.
4 Management of insurance and financial risk (continued)
4.3 Fair value hierarchy
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-42-
ARAB REINSURANCE COMPANY S.A.L.
6 Investment property
2012US$
795,278(163,872)
631,406
7 Financial assets held to maturity 2012US$
2,180,00031,308,50524,808,652
58,297,157
1,365,004
59,662,161
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ARAB REINSURANCE COMPANY S.A.L.
7 Financial assets held to maturity (continued)
2012US$
53,684,1227,630,000
(3,035,167)18,202
58,297,157
8 Available for sale financial assets
4,228,6094,181,346
8,409,955
2012US$
6,664,0751,170,497
575,383
8,409,955
9 Financial assets at fair value through profit and loss
-44-
ARAB REINSURANCE COMPANY S.A.L.
10 Loans and receivables including reinsurance receivables
2012US$
31,654,86611,036,299(1,800,000)20,757,4811,154,8281,265,061
33,41640,67575,368
64,217,994
11 Bank deposits with original maturity of more than 3 months
12 Cash and cash equivalents
2012US$
5,1612,705,712
2,710,873
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ARAB REINSURANCE COMPANY S.A.L.
13 Fair value reserve
2012US$
1,097,300(575,383)
521,917
14 Share capital
15 Legal reserve
16 Dividends paid
17 Insurance contracts and reinsurance assets
2012US$
Insurance contracts 78,091,75931,443,6841,530,000
Total insurance liabilities, gross 111,065,443
Recoverable from reinsurers 14,926,1536,618,872
Total reinsurers’ share of insurance liabilities 21,545,025
-46-
ARAB REINSURANCE COMPANY S.A.L.
17 Insurance contracts and reinsurance assets (continued)
2012US$
Net 63,165,60624,824,8121,530,000
Total insurance liabilities, net 89,520,418
17.1 Development claims tables
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.A.L
.
17
Insu
ranc
e co
ntra
cts a
nd r
eins
uran
ce a
sset
s (co
ntin
ued)
17.1
D
evel
opm
ent c
laim
s tab
les (
cont
inue
d)
Und
erw
ritin
g ye
ar
<200
5 20
06
2007
20
08
2009
20
10
2011
20
12
Tot
al
In U
S$'0
00
Tot
al in
sura
nce
liabi
lity
at b
alan
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Shee
t dat
e 79
,622
-48-
ARAB REINSURANCE COMPANY S.A.L.
18 Retirement benefit obligation
2012US$
201,00025,000
(35,994)
190,006
19 Accounts payable
3,858,525189,702
10,875,508157,069
2,093,232
17,174,036
20 Net insurance premium revenue
Insurance contracts
72,551,381(5,948,728)
Insurance premium revenue 66,602,653
15,491,455(2,354,685)
Insurance premium revenue ceded to reinsurers 13,136,770
Net insurance premium revenue 53,465,883
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ARAB REINSURANCE COMPANY S.A.L.
21 Investment income 2012US$
3,275,5674,359,231
180,325317,857
182,239 - (300,000) -
19,204
8,034,423
22 Reinsurance commission income and profit sharing
2012US$
4,844,7691,639,115
(2,501,215)
3,982,669
23 Insurance claims and loss adjustment expense
40,952,729(211,482)
Insurance claims and loss adjustment expenses 40,741,247
6,592,877
(673,159)
Reinsurers' share of incurred claims 5,919,718
Insurance claims, net of reinsurance 34,821,529
-50-
ARAB REINSURANCE COMPANY S.A.L.
24 Expenses for acquisition of insurance contracts
2012US$
19,734,0297,647,250
(9,045,944)
Total expenses for the acquisition of insurance contracts 18,335,335
25 Expenses for administration and other expenses2,537,284
60,898155,695313,59760,65795,00086,068
515,016350,452254,184728,035
Total administrative expenses 5,156,886(561,855)
4,595,031
26 Employee benefit expense
2,151,236271,71425,00089,334
2,537,284
27 Other operating income 226,289517,32260,805
(561,855)
242,561
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ARAB REINSURANCE COMPANY S.A.L.
28 Income Tax
2012US$
140,32070,670
210,990
7,964,033378,756
1,011,888
9,354,677
935,46715%
140,320
29 Related parties
2012US$
(a) Insurance contracts: 11,968,282(2,716,610)(3,423,961)(6,046,857)
958,694
(b) Key management compensation: 350,452
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ARAB REINSURANCE COMPANY S.A.L.
29 Related parties (continued)
2012US$
2,093,2321,154,828
30 Cash from operating activities
Cash flow from operating activities 7,973,641
60,898(18,202)
(1,170,497)
(7,000,000) -(7,630,000)
182,239) -
8,906,2027,375,747
-3,035,167
(7,435,888)5,944,428
(1,681,526)(1,398,694)(3,919,567)
(10,994)1,084,056
862,100
4,794,632(92,851)
Net cash provided from (used in) operating activities 4,701,781
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ARAB REINSURANCE COMPANY S.A.L.
Appendix A – Technical and non technical income statement
2012US$
66,602,653(13,136,770)
Net insurance premium revenue 53,465,8833,713,5773,982,669
Income from technical operations 61,162,129
(40,741,247)
5,919,718
Net insurance claims (34,821,529)
(18,335,335)
(3,187,276)
Expenses from technical operations (56,344,140)
Net income from technical operations 4,817,989
4,320,846242,561
Income from non technical operations 4,563,407
(1,407,755)
Net income from non technical operations 3,155,652
(210,990)
Net profit for the year 7,762,651
-54-