Cooperative Insurance Profits Fell to SR41 mln during 1Q, down 49%

The net profit before zakat for the Cooperative Insurance Company fell to SR41.4 million during the first quarter, compared to SR81 million during the same quarter of the previous year, at a rate of 49%.

This came after Cooperative Insurance announcement on Monday the consolidated preliminary financial results for the period ending on 31.03.2022 (three months).

As for the net profits of shareholders’ funds investments, they amounted to SR13 million during the first quarter, compared to SR47 million during the same quarter of the previous year, a decrease of 72%.

The deficit of insurance operations, minus the return on investments of policyholders (the results of operations) amounted to SR24 million during the first quarter, compared to a profit of SR4 million during the same quarter of the previous year.

Profits per share during the current period amounted to SR0.16, compared to SR0.47 during the same period of the previous year.

The reason of the increase (decrease) in the net profit during the current quarter compared to the same quarter of the last year is:

Net Profit before Zakat for the current quarter is SR 41,492K, compared to SR 80,811K for the same quarter of previous year. The reasons for the decrease in net profit before zakat are mainly attributable to a decrease in the total profits of policyholders’ investments and shareholders’ capital investment by SR 12,182K, increase in the net other operational expenses by SR 15,756K, and decrease in net underwriting income by SR 12,036K.

The decrease of SR 12,036k in net underwriting income is mainly due to the following:

– Increase in net claims incurred by SR 375,096K, an increase of 23.77%.

– Increase in insurers share distribution costs by SR 41,591K, an increase of 654.46%.

– Increase in policy acquisition costs by SR 8,825K, an increase of 10.08%. Offset by;

– Favorable increase in net earned premiums by SR 407,709k, an increase of 22.24%.

– Favorable increase in reinsurance commissions income by SR 6,641K, an increase of 27.28%.

The reason of the increase (decrease) in the net profit during the current quarter compared to the previous period of the current year is:

Net Profit before Zakat for the current quarter is SR 41,492K, compared to SR 13,482K for the previous quarter. The reasons for the increase in net profit before zakat are mainly attributable to decrease in the net other operating expenses by SR 69,117K, and increase in the total profits of policyholders’ investments and shareholders’ capital investment by SAR 1,138K, offset by decrease in net underwriting income by SR 37,337K, and increase in policyholders’ share of insurance operations surplus by SR 4,908K.

The decrease of SR 37,337k in net underwriting income is mainly due to the following:

– Increase in net claims incurred by SR 152,361K, an increase of 8.46%.

– Increase in insurers share distribution costs by SR 20,476K, an increase of 74.54%; offset by;

– Favorable increase in net earned premiums by SR 124,514k, an increase of 5.88%.

– Favorable decrease in other underwriting expenses by SR 11,568K, a decrease of 24.23%.

‘External auditors interim review report on the interim condensed consolidated financial statements mentions that the financial statements have been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting” as endorsed in the Kingdom of Saudi Arabia.

Certain of the prior period amounts have been reclassified to conform with the presentation in the current period. These changes were made for better presentation of balances and transactions in the interim condensed consolidated financial statements of the Company.