Company For Cooperative Insurance · TADAWUL:8010
Company For Cooperative Insurance — The Company for Cooperative Insurance (Tawuniya) — Q2 2019 Earnings Presentation
37 slides from Company For Cooperative Insurance's earnings presentation, 2019
Slide 1: Investors’ Presentation Q2 2019 Earnings Conference Call
Investors’ Presentation Q2 2019 Earnings Conference Call
Slide 2: Table of Contents
Table of Contents I. KSA Insurance Industry Market Conditions & Dynamics Market Performance by Line of Business Market Opportunities II. Tawuniya Performance III. Company Overview 2
Slide 3: KSA Insurance Industry
KSA Insurance Industry Change Separator 3
Slide 4: KSA Insurance Industry
KSA INSURANCE INDUSTRY Active regulators… Over-supplied with Insurers… Compulsory-Driven market… REGULATORS LICENSED COMPANIES COMPULSORY PRODUCTS Saudi Arabian Monetary Authority (SAMA) 33 insurance & reinsurance companies All private sector employees (including their dependents) must have 88 Broke
Slide 5: Underpenetrated Market with Medical premium domination
KSA INSURANCE INDUSTRY Underpenetrated Market with Medical premium domination… COUNTRY-LOOK GLOBAL-LOOK GWP MIX* SR 18,000 USA, 7.2%, Medical Motor P&C PENETRATION 15,810 16,000 14,000 UK, 9.6%, 12,000 OECD, 7.2%, 14,288 13% 1.4% 1.9% 10,000 10,322 Density Total GDP Non-oil GDP UAE, 3.7%, 8,000 5,38
Slide 6: Corporate segment dominates market premiums
KSA INSURANCE INDUSTRY Corporate segment dominates market premiums… Overall Market Segment MEDICAL MOTOR P&C Retail Micro Retail Retail Small Micro Micro 2,266 513 448 55.1 149 69 625 12% 4% 4% 2% 6% 3% 3% Small 920 Retail Small Medium 8% 1,763 1,219 371 38% 6% 14% Medium 1,886 15% Large Micro Large
Slide 7: Current market conditions
KSA INSURANCE INDUSTRY Current market conditions… Consumers purchasing power faced deflation from the beginning of 2019 Expats exodus slowed down compared to 2018 The introduction of Hajj & Umrah Program Overall Medical CCHI enforcement on Saudis in the private sector will positively improve
Slide 8: New Hajj and Umrah Program
KSA Insurance Industry New Hajj and Umrah Program and Tawuniya is the Lead Insurer… Hajj Product Coverage Umrah Product Coverage Coverage Period: 60 days Coverage Period: 30 days Flight Delay and Cancelation Flight Delay and Cancelation Accidental Death Accidental Death Repatriation
Slide 9: Hajj and Umrah Program Operating Model
KSA Insurance Industry New Hajj and Umrah Program and Tawuniya is the Lead Insurer… Operating Model Integration Integration TPA Visa Issuance Policy Issuance Claims Processing Pilgrim Data Transfer Data Transfer Claims Payment Quality Assurance Customer Service Underwriting and Por
Slide 10: Tawuniya as Lead Insurer of the Program
KSA Insurance Industry New Hajj and Umrah Program and Tawuniya is the Lead Insurer… 1. Tawuniya will be acting as Lead Insurer on the program representing the insurance industry. 2. The program will be on a "co-insurance" basis with the insurance sector. 3. In brief, Tawuniya will: Book all GWP as
Slide 11: 57.5% of market premiums controlled by top 3 players
KSA INSURANCE INDUSTRY 57.5% of market premiums are controlled by the top 3 players… Y-O-Y MARKET SHARE l Tawuniya & MedGulf cover all lines of business 60% MedGulf Bupa while Bupa only covers health insurance GWP: 2.7b Growth: 61.2% GWP: 9.4b 40% Share: 7.7% Growth: 15.5% COMPANY GROWTH Share: 26.4
Slide 12: Market facing challenging conditions in profitability
KSA INSURANCE INDUSTRY Market facing challenging conditions in profitability… MA RK E T G W P NET INCOME 693 19.7 19.5 609 475 -11.0% +11.0% 17.5 6M, 2017 6M, 2018 6M, 2019 6M, 2017 6M, 2018 6M, 2019 MA RK E T LO SS RAT I O INVESTMENT INCOME NON-INVESTMENT INCOME Earned Premium Incurred Claims 227 8
Slide 13: Medical market price and loss ratio increases
KSA INSURANCE INDUSTRY Medical Market experiencing price and loss ratio increases… MA RK E T G W P Y-O-Y MARKET SHARE 110% +19.0% 12.3 10.6 -2.5% 10.3 Bupa 90% GWP: 9.4b Growth: 15.5% Share: 41.2% COMPANY GROWTH Medgulf 6M, 2017 6M, 2018 6M, 2019 70% GWP: 2.0b Growth: 103.9% Tawuniya MA RK E T LO SS
Slide 14: Medical market room for growth in coming decade
KSA INSURANCE INDUSTRY Medical market has major room for growth in the coming decade… Medical Market Opportunities Tawuniya’s Competitive Position Saudi dependents: 2 M lives during 2019 Current large market share (23.1%) Government Programs: 3 M lives up to 2030 Comprehensive insurer with a
Slide 15: Motor market experiencing premium decline
KSA INSURANCE INDUSTRY Motor Market experiencing premium decline… MA RK E T G W P Y-O-Y MARKET SHARE 60% 6.5 -24.2% 4.9 -8.1% 4.5 AXA Others GWP: 803m GWP: 5.1b 40% Growth: -13.4% Growth: +7.2% Share: 9.5% Share: 59.8% COMPANY GROWTH 6M, 2017 6M, 2018 6M, 2019 Rajhi 20% GWP: 1.9b Growth: -20.0% MA R
Slide 16: Motor market could double its size in coming decade
KSA INSURANCE INDUSTRY Motor market holds promising factors to double its size in the coming decade… Motor Market Opportunities Tawuniya’s Competitive Position Vehicles: around 12 m in 2018 Strong technical performance to compete for market share. Government Programs: increase insurance covera
Slide 17: P&C market experiencing premium increase
KSA INSURANCE INDUSTRY P&C Market experiencing premium increase… Tawuniya has the “lion-share” MA RK E T G W P 2.6 Y-O-Y MARKET SHARE 2.5 60% -11.9% +16.3% MedGulf Others 2.2 GWP: 297m 40% GWP: 2.4b Growth: +27.7% Growth: +1.9% Share: 6.9% Share: 41.2% COMPANY GROWTH 6M, 2017 6M, 2018 6M, 2019 20% +
Slide 18: P&C market positively impacted in coming decade
KSA INSURANCE INDUSTRY P&C market will be positively impacted in the coming decade… P&C Market Opportunities Tawuniya’s Competitive Position Number of business establishments: 484K in 2018 Dominating position in the market. Government Programs: mega projects by the government (Solar Power, NEO
Slide 19: Tawuniya Performance
Tawuniya Performance Change Separator 19
Slide 20: 6M 2019 growth in Medical and P&C lines
TAWUNIYA PERFORMANCE 6M 2019 experienced growth in Medical and P&C lobs… GWP ( S A R M I L L I O N ) HIGHLIGHTS TOTAL 4,133 -6.8% 3,852 +15.7% 4,457 Inlcuding Manafeth Medical GWP grew by 17% mainly due to CCHI 312 new table of benefits and price increases. 721 365 736 P&C GWP grew by 30% mainly
Slide 21: Loss ratio
TAWUNIYA PERFORMANCE Now turning to the loss ratio, the life blood of any insurance business… LOSS RATIO 120% 100% 80% 60% 40% 20% 0% Q1-2018 Q2-2018 Q3-2018 Q4-2018 Q1-2019 Q2-2019 MEDICAL MOTOR P&C 21
Slide 22: Medical loss ratio improvement
TAWUNIYA PERFORMANCE Medical loss ratio improvement… % Change Average Earned Premium (6M) % Change Ultimate BC (6M) 2018 2019 201801 201802 201803 201804 201805 201808 201809 201810 201811 201812 201901 201902 201903 201904 201905 201906 22
Slide 23: Medical loss ratio future challenge
TAWUNIYA PERFORMANCE Medical loss ratio future challenge… % Change Average Earned Premium (6M) % Change Ultimate BC (6M) 2018 2019 2020 201801 201802 201803 201804 201805 201808 201809 201810 201811 201812 201901 201902 201903 201904 201905 201906 201907 201908 201909 201910 201911 201912 202001 202
Slide 24: Cost of acquisition/servicing and fixed overheads
TAWUNIYA PERFORMANCE Cost of Acquisition/Servicing and Fixed overheads… ALLOCATED EXPENSE AND G&A RATIO HIGHLIGHTS Expenses G&A Total costs (excluding BDP) rose only 3% in H1, 12% but due to an earned decline of 7% the expense 11% ratio rose from 14.1% to 15.5% (including 10% 9.6% Manafeth). 9% 8.
Slide 25: Bad debt provisions in Q2
TAWUNIYA PERFORMANCE Article 69 heavily impacts the insurance industry Bad Debt provisons in Q2… Comparison Description Tawuniya Al Rajhi Takaful Bupa Medgulf Receivables Opening Balance 1,678 535 1,120 1,210 Gross Written Premium 4,457 1,388 5,344 1,077 Gross Total Receivables 6,135 1,923 6,464 2,2
Slide 26: Effective management of receivables
TAWUNIYA PERFORMANCE Effective Management of receivables and stable “Due Amounts” from invoice date… 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 - Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Gross Receivables Collection & Adjustments Due Amount 26
Slide 27: Investments and investment income
TAWUNIYA PERFORMANCE Other elements that feed into the Reported Net income are … TOTAL INVESTMENTS (SR MILLION) UN-REALIZED INVESTMENT INCOME (SR MILLION) 260.2 5,967 6,013 5,986 5,702 45.6 5,249 5,016 -32.2 -148.5 2Q16 2Q17 2Q18 2Q19 REALIZED INVESTMENT INCOME (SR MILLION) 136.4 112.3 113.1 67.0 20
Slide 28: Leveraging Balance Sheet Structure
TAWUNIYA PERFORMANCE Leveraging Balance Sheet Structure… TAWUNIYA BUPA MEDGULF AL RAJHI TAKAFUL Description Q2-2019 Q2-2019 Q2-2019 Q2-2019 INVESTMENTS 7,556 6,725 1,565 2,773 PROPERTY & EQUIPMENT 256 177 72 29 GOODWILL 0 98 480 0 LESS : EQUITY (2,149) (2,896) (691) (827) WORKING CAPITAL 5,663 4,104
Slide 29: Company Overview
Company Overview Tawuniya 4Ligl ei!
Slide 30: Leading Saudi insurer with years of sustained achievements
COMPANY OVERVIEW Leading Saudi insurer with 33 years of sustained achievements… Introduced medical IPO to float 70% of First insurer to insurance plans the total capital launch digital services in KSA 1986 2004 2006 2017 1995 2005 2010 Tawuniya SAMA License, first “A” credit rating Paid-up capital E
Slide 31: Two government entities own 37% of Tawuniya
COMPANY OVERVIEW Two of the strongest government entities own 37% of Tawuniya… GOSI Tawuniya is an enlisted company Investment Portfolio: With a paid-up capital of SAR 1,250 m SAR 134 billions More than 51 companies GOSI 18% PPA Publicly Investment Portfolio: PPA Floated 63% 19% SAR 68.5 billions 65
Slide 32: Our Vision & Mission
COMPANY OVERVIEW Our Vision & Mission… OUR VISION OUR MISSION Be the companion that presents Sustain momentum for our society’s safety innovative and customer centric insurance and continuous progress towards the solutions, so our customers feel secure, future. empowered and ready for the future. So
Slide 33: The largest comprehensive insurer in GCC
COMPANY OVERVIEW The largest comprehensive insurer in GCC… Portfolio of SR 8 billion with multi-offerings across all lines of business & segments CORPORATE – SME – RETAIL MEDICAL MOTOR PROPERTY & CASUALTY • My Family • Al-Shamel • Engineering • Aviation • Balsam • Sanad • Fire & Property • Energy •
Slide 34: Largest regional and global reach to clients and providers
COMPANY OVERVIEW The largest regional & global reach to clients and providers… 5 Regional Offices + 2,000 Network of over a million Providers health care providers 105 Branches in 13 Regions 24 Agents + 2,000 20 Employees International Reinsurers Treaties 34
Slide 35: High credit rating and A-rated reinsurance partners
COMPANY OVERVIEW Insurance company with high credit rating within KSA… and (A) rated reinsurance partners… OUR INTERNATIONAL REINSURERS Solicited CCR is rated “AA” by S&P (BBB+) Munich Re is rated “AA-” by S&P Swiss Re is rated “AA-” by S&P Everest Re is rated “A+” by S&P Un-Solicited Transatlantic
Slide 36: 15,740+ organizations trust Tawuniya
COMPANY OVERVIEW + 15,740 organizations across various sectors trust Tawuniya… MINING & Government & semi- AVIATION FINANCIALS TELECOM. MANUFACTURING PETROCHEM. govt 36
Slide 37: Thank You
THANK YOU ًﺷﻛرا
The Company for Cooperative Insurance (Tawuniya) — Q2 2019 Earnings Presentation on 6ix