Company For Cooperative Insurance · TADAWUL:8010
Company For Cooperative Insurance — The Company for Cooperative Insurance (Tawuniya) — Q1 2020 Earnings Presentation
44 slides from Company For Cooperative Insurance's earnings presentation, 2020
Slide 1: Investors' Presentation Q1 2020 - Earnings Conference Call
INVESTORS’ PRESENTATION Q1 2020 - EARNINGS CONFERENCE CALL
Slide 2: Table of Contents
TABLE OF CONTENTS I. KSA INSURANCE INDUSTRY II. COVID-19 SUMMARY III. TAWUNIYA’S PERFORMANCE IV. COMPANY OVERVIEW 2
Slide 3: KSA Insurance Industry
KSA INSURANCE INDUSTRY Change Separator
Slide 4: KSA Insurance Industry
KSA INSURANCE INDUSTRY Active regulators… Over-supplied with Insurers… Compulsory-Driven market… MEDICAL MOTOR PROPERTY & CASUALTY COMPULSORY All private sector employees All motorists must carry a All government infrastructural PRODUCTS (including their dependents) must have 3rd party liability pro
Slide 5: Underpenetrated market with high potential for growth
KSA INSURANCE INDUSTRY Underpenetrated market with high potential for growth… GLOBAL-LOOK COUNTRY-LOOK* (2019) (2019) SR 18,000 USA, 7.1%, 16,804 16,000 PENETRATION UK, 10.6%, Advanced EMEA, 7.6%, 14,000 16,886 12,285 Total GDP Non-oil GDP 12,000 1.27% 1.86% Density 10,000 8,000 Bahrain, 1.8%, 1,950
Slide 6: Medical insured lives decline
KSA INSURANCE INDUSTRY Medical insured lives experiencing a decline compared to end of 2019… TOTAL INSURED LIVES -7.5% Saudis (‘000) Expats +0.6% -5.0% 11,020 10,471 7,585 7,015 31% 33% 3,436 3,456 69% 67% 31-Dec-19 21-Jun-20 31-Dec-19 21-Jun-20 Primary SAUDIS EXPATS Dependent (‘000) (‘000) 2,118 2,
Slide 7: Decline driven by drop in expats insured lives
KSA INSURANCE INDUSTRY The decline is driven by drop in expats insured lives… Saudis Expats Total 11.3 11.3 11.4 11.5 11.4 11.2 11.2 11.2 11.1 11.2 11.1 11.1 11.0 11.1 11.1 10.7 10.6 10.5 7.9 8.0 8.0 8.1 8.1 8.1 7.9 7.8 7.8 7.7 7.7 7.6 7.7 7.6 7.5 7.3 7.1 7.0 3.3 3.3 3.3 3.3 3.3 3.3 3.5 3.5 3.4 3.5
Slide 8: Medical GWP Growth Rates
KSA INSURANCE INDUSTRY Medical GWP Growth Rates… QUARTER ON QUARTER 18% 16% 15% 10% 11% 7% 5% 8% 6% 6% 5% 2% -2% -6% -5% -10% -10% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2020 ROLLING 12 MONTH 9% 8% 3% -4% Q1,
Slide 9: Motor GWP Growth Rates
KSA INSURANCE INDUSTRY Motor GWP Growth Rates… QUARTER ON QUARTER 28% 28% 5% -4% -5% -1% -4% -11% -12% -8% -8% -11% -16% -17% -15% -22% -31% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2020 ROLLING 12 MONTH 1% -5%
Slide 10: P&C GWP Growth Rates
KSA INSURANCE INDUSTRY P&C GWP Growth Rates… QUARTER ON QUARTER 75% 15% 18% -6% 1% -5% 4% -13% -10% -6% -14% -9% -6% -8% -21% -22% -17% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2020 ROLLING 12 MONTH 27% -8% -8%
Slide 11: COVID-19 Summary
COVID-19 SUMMARY
Slide 12: COVID-19 Summary: statistics and government efforts
COVID-19 SUMMARY Most recent statistics and government efforts… TOTAL ACTIVE RECOVERED CRITICAL CASES DEATHS NEW CASES - DAILY TREND COVID-19 CASES 4,400 3,300 as of 20th June 154,233 54,086 35% 98,917 64% 1,955 1% 1,230 1% 2,200 1,100 2-May 12-May 22-May 1-Jun 11-Jun STEPS TAKEN GOVERNMENT ENTITIES
Slide 13: COVID-19 Summary - Government Actions
COVID-19 SUMMARY - GOVERNMENT ACTIONS A summarized timeline of active measures taken to control and combat the spread as well as protecting the people… Remote working All public Gov. donates imposed on public transportation is $10m to WHO sectors, suspension shutdown (air, of malls & public buses, t
Slide 14: COVID-19 Summary - Government Actions
COVID-19 SUMMARY - GOVERNMENT ACTIONS A summarized timeline of active measures taken to control and combat the spread as well as protecting the people… Gov. extends Curfew adjusted Extension of Curfew MOH launched remote working 9am – 5pm on permitting till 8PM “Tabaud” till further notice majority
Slide 15: COVID-19 Summary - Tawuniya Actions
COVID-19 SUMMARY - TAWUNIYA ACTIONS Following the governments footsteps, we took immediate measures to ensure the safety and wellbeing of our employees… Engaged a professional Exempt employees Stopped all business Established in-premise Enabled employees to Back to office gradually provider to sanit
Slide 16: Tawuniya Actions: 21 drive-thru testing centers
COVID-19 SUMMARY - TAWUNIYA ACTIONS As a pioneer in the insurance industry, we supported the government efforts by establishing 21 drive-thru testing centers MAIN HIGHLIGHTS • Operational centers have been handed over to MOH (in Riyadh, Makkah, Medina, Jeddah, Abha and Dammam) • A capacity of 20,000
Slide 17: Regulatory Intervention: SAMA Decision-189
COVID-19 SUMMARY - REGULATORY INTERVENTION SAMA issued “Decision-189” on May 8th, 2020… The decision was released to support insurance companies and clients due to COVID-19 impact, and it stated: 1. Extension of two months for active motor policies 1 2. Extension of two months for newly purchased mo
Slide 18: COVID-19 Summary - Market Dynamics
COVID-19 SUMMARY - MARKET DYNAMICS Current market conditions… OVERALL Saudi economy grew modestly in 2019 (real GDP grew by 0.33% in 2019 compared to an expansion of 2.43% in 2018) Heavy pressure on oil prices since the beginning of the year due to less demand caused by coronavirus Saudi econo
Slide 19: Expected implications in the medium/long term
COVID-19 SUMMARY - MARKET DYNAMICS Expected implications in the medium/long term… CASH/LIQUIDITY • CCHI circular urged all insurance companies to settle outstanding claims up to end of 2019, which will have an impact on the cash position • Hospital revenues impacted due to lockdown, creating strong
Slide 20: Tawuniya's Performance
TAWUNIYA’S PERFORMANCE Change Separator
Slide 21: Overall highlights: GWP and loss ratio
TAWUNIYA PERFORMANCE Overall highlights… GROSS WRITTEN PREMIUM (MILLION SAR) +4.7% 2,457 2,497 2,573 │ GWP grew positively compared to the same quarter 2,000 1,423 of previous year │ The growth is driven 2 months of Umrah premiums Q1, 2019 Q2, 2019 Q3, 2019 Q4, 2019 Q1, 2020 REPORTED LOSS RATIO (%)
Slide 22: Overall highlights: overheads and investment income
TAWUNIYA PERFORMANCE Overall highlights… TOTAL OVERHEADS (MILLION SAR) +44.7% 361 20 │ Overheads increased by 111M compared to last 250 240 251 87 207 +1.9% year (only 4m if Umrah & MOH are excluded) 254 MOH │ Other U/W expenses increased by 157% (63m) Hajj & Umrah driven by Hajj & Umrah fees & cost
Slide 23: Overall highlights: pre-tax income
TAWUNIYA PERFORMANCE Overall highlights… PRE-TAX INCOME (MILLION SAR) │ Net income increased by 39m compared to last year │ Positive results are driven by the improvement in contribution +84.9% 177 109 85 70 46 Q1, 2019 Q2, 2019 Q3, 2019 Q4, 2019 Q1, 2020 23
Slide 24: Profit movement analysis Q1 2019 to Q1 2020
TAWUNIYA PERFORMANCE Profit movement analysis from Q1, 2019 to Q1, 2020… 20 41 85 33 4 12 35 46 Q1, 2019 Earned Incurred MOH BDP Umrah* Others Q1, 2020 Pre-Tax Premium Claims Donation Pre-Tax Income Income * Net movement of Hajj/Umarh (includes premium) 24
Slide 25: Q1 2020 premiums increase driven by Umrah
TAWUNIYA PERFORMANCE Q1, 2020 premiums experienced an increase driven by Umrah… GWP HIGHLIGHTS (MILLION SAR) +5% │ Overall GWP increased by 5% 2,497 2,573 2,457 237 │ Medical GWP declined by 1% due to 254 181 221 2,000 725 187 pressure on mix (new/renewing) to sustain 482 margin improvement 210 1,42
Slide 26: Hajj & Umrah program on hold due to COVID-19
TAWUNIYA PERFORMANCE Hajj & Umrah program is currently on-hold due to COVID-19… PILGRIMS (‘000) PREMIUM (‘000) 1,000 160,000 101,944 764 140,000 800 120,000 555 Total 600 100,000 Total 1.3M 80,000 140,294 242M 400 60,000 40,000 200 67 0 20,000 0 0 202001 202002 202003 202004 202005 202006 202001 202
Slide 27: Reported Loss Ratio
TAWUNIYA PERFORMANCE Now turning to the loss ratio, the life blood of any insurance business… REPORTED LOSS RATIO MEDICAL 2018 2019 2020 MOTOR 115.0% 80% 60% 110.0% 40% 105.0% 20% 0% 100.0% Q1 Q2 Q3 Q4 95.0% P&C 80% 90.0% 60% 40% 85.0% 20% 80.0% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 27
Slide 28: Medical loss ratio future challenge
TAWUNIYA PERFORMANCE Medical loss ratio future challenge to bear down on medical inflation… AS PRESENTED IN Q3 WEBCAST Medical – Forecast (Q4 2019 & 2020) % Change Average Earned Premium (6 RF) % Change Claims Cost Per Life (6 RF) % Change Average Earned Premium (6 RF) - Forecast % Change Claims Cos
Slide 29: Medical loss ratio recovery in full swing
TAWUNIYA PERFORMANCE Medical loss ratio recovery in full swing… Medical – Actual 2020 % Change Average Earned Premium (6 RF) % Change Ultimate BC (6 RF) 201801 201803 201805 201807 201809 201811 201901 201903 201905 201907 201909 201911 202001 202003 29
Slide 30: 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) increased by 6% compared to previous year, mainly driven G&A increase Other underwriting costs declined by 15% 9.1% 8.8% 8.1% Policy Acqui
Slide 31: Effective management of receivables
TAWUNIYA PERFORMANCE Effective Management of receivables and stable “Due Amounts” from invoice date… BDP (Secondary Axis) Gross Receivables Collection & Adjustments Due Amount 3,000 300 2,500 250 2,000 200 MILLIONS MILLIONS 1,500 150 1,000 100 500 50 0 0 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-
Slide 32: Bad debt provisions comparison with peers
TAWUNIYA PERFORMANCE Article 69 heavily impacts the insurance industry Bad Debt provisions… Comparison Description Tawuniya Al Rajhi Bupa Medgulf Receivables Opening Balance (Dec 31, 2019) 1,496 336 1,689 572 Plus: Gross Written Premium 2,573 788 3,470 1,260 Gross Total Receivables 4,069 1,124 5,159
Slide 33: Leveraging Balance Sheet Structure
TAWUNIYA PERFORMANCE Leveraging Balance Sheet Structure… Tawuniya Al Rajhi Medgulf Bupa Description Q1-2020 Q1-2020 Q1-2020 Q1-2020 Investments + Cash 7,456 2,742 1,287 7,853 Property & Equipment 255 42 48 165 Goodwill 0 0 480 98 Less : Equity -2,543 -862 -692 -3,092 Working Capital* 5,169 1,922 1,1
Slide 34: Investments and investment income
TAWUNIYA PERFORMANCE Other elements that feed into the Reported Net income… TOTAL INVESTMENTS (SR MILLION) UN-REALIZED INVESTMENT BALANCE (SR MILLION) 168 144 CAGR 6,637 +3.6% +2.4% 6,404 5,967 6,013 -15 -71 5,249 -166 -199 2016 2017 2018 2019 Q1, 2019 Q1, 2020 4.33% 3.76% REALIZED INVESTMENT INCOME
Slide 35: Company Overview
COMPANY OVERVIEW Tawuniya &1igl2iJ!
Slide 36: Leading Saudi insurer with years of achievements
COMPANY OVERVIEW Leading Saudi insurer with 33 years of sustained achievements… Introduced IPO to float 70% First insurer to Tawuniya shares medical of the total capital launch digital listed in MSCI insurance plans services in KSA index 1986 2004 2006 2017 2020 1995 2005 2010 2019 Tawuniya SAMA Lic
Slide 37: 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 Investment Portfolio: Publicly Floated PPA SAR 68.5 billions 19% 63% 65
Slide 38: 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 39: The largest comprehensive insurer in GCC
COMPANY OVERVIEW The largest comprehensive insurer in GCC… Portfolio of SR 8.4 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 40: Largest regional & global reach
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 + 70 Branches in 13 Regions 24 Agents + 2,000 20 Employees International Reinsurers Treaties 40
Slide 41: High credit rating and rated reinsurance partners
COMPANY OVERVIEW Insurance company with high credit rating within KSA… and (A) rated reinsurance partners… OUR INTERNATIONAL REINSURERS Solicited CCR Re is rated “A-” 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 Trans Re is
Slide 42: 15,740+ organizations trust Tawuniya
COMPANY OVERVIEW + 15,740 organizations across various sectors trust Tawuniya… Aviation Financial Telecommunication Mining & Petro. Manufacturing Other 42
Slide 43: Our awards in 2019
COMPANY OVERVIEW Our awards in 2019 │ Top 10 Strongest Brands in Saudi Arabia 2019 Brand Finance │ Best Electronic General Insurance Company Saudi Arabia 2019 Global Banking & Finance Review │ Best Innovative Insurance Company World Finance │ Best Takaful Company 2019 Global Islamic Finance Awards (
Slide 44: Thank You
THANK YOU ًشكرا
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