Contents
About IGIH
Board of Directors
Letter from the Board of Directors
Financial Statements
IGI Offices
2
4
6
8
48
About IGIH
International General Insurance Holdings Limited (IGIH)
is registered in the Dubai International Financial Centre
with operations in Bermuda (IGI Bermuda), the United
Kingdom, Jordan and Malaysia.
IGI Bermuda is a class 3B (Re)insurer regulated by the
Bermuda Monetary Authority and is rated A-(“Excellent”)
by A.M. Best Company Inc. This subsidiary is the principal
underwriting entity for the Group with the Jordan office
providing all management, underwriting and operational
functions. The Group also has subsidiary companies
in the United Kingdom, Dubai and in Labuan, Malaysia
registered as a first tier reinsurer.
IGI Group (companies) underwrite a worldwide portfolio of
energy, property, marine, construction and engineering,
financial institutions, general aviation, casualty, ports
& terminals and non-proportional reinsurance treaty
business with the main geographical focus on the Afro-
Asian markets.
IGIH has assets of more than US$ 564 million as at 31st
December, 2011.
4 International General Insurance Holdings Limited | Board of dIrectors
International General Insurance Holdings Limited | Board of dIrectors 5
Board of
directors
Mr. Mohammed abu Ghazaleh
Chairman (Chairman and CEO, Fresh Del Monte Produce Inc. – Miami)
Mr. Wasef Jabsheh
CEO & Vice Chairman
Mr. Khalifa al Mulhem
Director (Chairman, National Polypropylene Company Limited – Saudi Arabia)
Mr. Hani tarazi
Director (Saba IP & Co. – Dubai, UAE)
Mr. Khaled sifri
Director (CEO, Arab Emirates Investment Bank – Dubai, UAE)
Mr. Hani Jabsheh
Director (CEO, Al Bawaba.com)
al sayyida rawan al said
MD and Group CE of ONIC Holding
6 International General Insurance Holdings Limited | Letter froM tHe Board of dIrectors
International General Insurance Holdings Limited |
Letter froM tHe Board of dIrectors
7
Letter from the Board of Directors
The close of 2011 marks our tenth anniversary and yet another successful year. 2011 proved to be a very difficult year for all
insurers due to the excess capacity in the market and the unprecedented level of natural catastrophe losses arising mainly from the
earthquakes in New Zealand and Japan as well as the floods in Thailand. Their impact on the global economy is estimated at $350
billion whilst the impact on the insurance industry is estimated to be at $116 billion, up 142% from the previous year, proving to be the
second worst year with respect to catastrophe losses.
Although IGIH was impacted by these major catastrophes, incurred losses were well within our comfort zone and risk tolerance.
Despite a challenging 2011, IGIH was able to achieve a very healthy combined ratio and record net profits. This is a testament
to IGIH’s sound management, strict and selective underwriting policies, rigorous exposure management and market vision. Since
inception, IGIH has grown materially from its historical core of energy, property and engineering underwriting, with a compound annual
growth rate of 36.92% on gross premiums from 2002 to 2011.
On the geopolitical front, 2011 was the year of the Arab Spring, which has led to revolts in several countries in the Middle East
and North Africa (MENA). We are continually monitoring the geopolitical risks associated with our operations in the region, but we
also believe that IGIH is in a very strong position to take advantage of all the new investments being carried out by Governments
and Sovereign Wealth Funds in the MENA region. These investments mainly consist of new infrastructure construction, energy and
industrial projects which fit perfectly within IGIH’s insurance portfolio.
2011 was also a noteworthy year for IGIH in respect of development and expansion. Among the major accomplishments during the
year were:
• International General Insurance Co. (UK) Limited (IGI UK) commenced operations on July 1st, 2011. IGI UK is now writing Financial
Institutions, Marine, EAR/CAR and Ports and Terminals business.
• IGIH has created its own internal capital model using a leading global vendor. This is a march forward towards structured and
efficient risk management of business processes and capital deployment using various scientific and statistical tools.
• As part of our continued drive to diversify our insurance portfolio, IGI UK hired a specialist team of underwriters at the end of 2011
to write a Ports and Terminals account, IGIH’s newest class of business. This line of business is complementary to our marine book
and gives IGIH further diversification of its insurance portfolio.
Turning to our financials, we are proud to present our commendable earnings. We have once again exceeded our net profit targets
scoring good operational indices all through with an enviable combined ratio at the end. Our results are proof of our continued risk
management and unwavering risk controls enabling us to adjust our insurance portfolio according to market conditions. This dynamic
management style is the essence of our business model and can be witnessed over the past several years with the elimination of Gulf
of Mexico catastrophe exposures, reorganization of our marine book and the recent expansion into the Far East and New Zealand, an
area where we drastically reduced our exposures several years ago. We are confident that with our continued expansion plans and
the expected economic recovery, our Group will be able to achieve its target growth rates and expected profit for the coming years.
Highlights for the year 2011 included the following:
• Gross written premium in 2011 was US$ 202.8 million, an increase of 13.11 % compared to US$ 179.3 million for 2010.
• Underwriting profit grew to US$ 33.6 million for 2011, an increase of 50 % from US$ 22.4 million in 2010.
• Investment income for the year stood at US$ 8.4 million, a decrease of 15.15 % compared to US$ 9.9 million for 2010.
• The combined ratio for 2011 was 88 % compared to 93 % for 2010.
• Net Profit amounted to US$ 23.2 million for 2011 against US$ 17.2 million for 2010, an increase of 35%
• Total assets were US$ 564.1 million at the end of 2011, an increase of 7.1 % compared to US$ 488.9 million as of 31st December,
2010.
• Shareholders’ equity rose to US$ 205.4 million at the end of 2011, up 9.37 % compared to US$ 187.8 million as of 31st December,
2010.
We would like to thank all our clients and producers for their continued support throughout 2011. We would also like to thank all our
employees for their significant effort and contribution this year.
We look forward to working together in 2012 to fulfill the visions and ambitions of the Company and to further promote our position
as the lead underwriting operation in the region.
8 International General Insurance Holdings Limited | fInancIaL stateMents
audItors’ report
9
P.O. Box 9267
28th Floor - Al Attar Business Tower
Sheikh Zayed Road
Duabi, United Arab Emirates
Tel: +971 4 332 4000
Fax:+971 4 332 4004
dubai.uae@ae.ey.com
www.ey.com/me
Independent audItors’ report to tHe sHareHoLders of
InternatIonaL GeneraL Insurance HoLdInGs LIMIted
We have audited the accompanying consolidated financial statements of International General Insurance Company Holdings Limited
(“the Company”) and its subsidiaries (together “the Group”), which comprise the consolidated statement of financial position as at 31
December 2011 and the consolidated statements of income, comprehensive income, changes in equity and cash flows for the year
then ended, and a summary of significant accounting policies and other explanatory information.
Management’s responsibility for the consolidated financial statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with
International Financial Reporting Standards and the applicable provisions of the Companies Law pursuant to DIFC Law No. 2 of 2009,
and for such internal control as management determines is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other than the Company and the shareholders of the Company as a body, for our
audit work, for this report, or for the opinions we have formed. We conducted our audit in accordance with International Standards
on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal
control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate for the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Group as of 31
December 2011 and its financial performance and its cash flows for the year then ended, in accordance with International Financial
Reporting Standards.
report on other legal and regulatory requirements
We also confirm that, in our opinion, the consolidated financial statements include, in all material respects, the applicable requirements
of the Companies Law pursuant to DIFC Law No. 2 of 2009. We have obtained all the information and explanations which we required
for the purpose of our audit. To the best of our knowledge and belief, no violations of the companies law pursuant to Law No. 2 of 2009
have occurred during the year which would have had a material effect on the business of the Company or on its financial position.
March 2012
dubai, united arab emirates
10 International General Insurance Holdings Limited
Financial Results
11
12
International General Insurance Holdings Limited | fInancIaL stateMents
consoLIdated stateMent of fInancIaL posItIon
AT 31 DeceMBer 2011
13
assets
Premises and equipment
Intangible assets
Investment in associated companies
Investment property
Investments
Deferred policy acquisition costs
Insurance receivables
Trade receivables
Other assets
Reinsurance assets
Cash and bank balances
totaL assets
eQuItY and LIaBILItIes
equity
Issued share capital
Foreign currency translation reserve
Cumulative changes in fair values
Retained earnings
Total equity
Liabilities
Insurance contract liabilities
Other liabilities
Insurance payable
Unearned commissions
total liabilities
totaL eQuItY and LIaBILItIes
Notes
2011
USD
2010
USD
3
4
5
6
7
8
9
10
11
13
14
3,191,687
210,238
11,702,917
29,163,154
3,735,073
298,990
11,280,888
28,996,126
134,452,231
154,998,453
29,451,946
100,627,596
236,294
2,670,664
94,332,057
158,083,737
564,122,521
25,730,470
85,985,756
1,037,660
5,897,073
69,151,824
101,689,289
488,801,602
15
143,375,678
143,375,678
(286,652)
5,326,279
(269,090)
6,576,750
57,018,481
38,097,808
205,433,786
187,781,146
12
17
18
19
308,536,375
259,462,447
2,885,594
38,052,375
9,214,391
358,688,735
564,122,521
2,698,012
31,083,276
7,776,721
301,020,456
488,801,602
The consolidated financial statements were authorised for issue in accordance with a resolution of the Board of Directors on 23rd March 2012.
14 International General Insurance Holdings Limited | fInancIaL stateMents
consoLIdated stateMent of IncoMe
AT 31 DeceMBer 2011
Gross written premiums
Change in unearned premiums
Gross earned premiums
Notes
12 (a)
2011
USD
202,786,867
(17,544,900)
12 (a)
185,241,967
2010
USD
179,333,354
(20,164,075)
159,169,279
Reinsurers’ share of insurance premiums
12 (a)
(69,745,208)
(68,012,218)
Reinsurers’ share of change in unearned premiums
3,779,284
6,545,283
reinsurers’ share of gross earned premiums
12 (a)
(65,965,924)
(61,466,935)
net premiums earned
claims
Reinsurers’ share of claims
Commissions earned
Policy acquisition costs
net underwriting result
Investment income
Share of profit from associated companies
Gain on sale of premises and equipment
Recovery of bad debts written off
General and administrative expenses
Provision for doubtful debts
(Loss) / gain on exchange
Goodwill impaired
profit before tax
Tax credit on subsidiary losses
profIt for tHe Year
profit for the year
other comprehensive income
Fair value changes during the year
Currency translation differences
other comprehensive income for the year
total comprehensive income for the year
12 (b)
12 (b)
19
8
20
5
4
119,276,043
97,702,344
(110,425,705)
(94,168,856)
44,590,694
15,782,822
37,614,741
13,268,394
(35,586,760)
(32,024,216)
33,637,094
22,392,407
7,996,668
552,864
8,206
788,537
9,510,260
575,159
-
-
(18,792,325)
(15,079,396)
(900,000)
(187,633)
-
-
84,562
(287,486)
23,103,411
17,195,506
118,532
-
23,221,943
17,195,506
2011
USD
2010
USD
23,221,943
17,195,506
(1,250,471)
(17,562)
(1,268,033)
21,953,910
2,187,042
(61,040)
2,126,002
19,321,508
International General Insurance Holdings Limited | fInancIaL stateMents
consoLIdated stateMent of casH fLoWs
AT 31 DeceMBer 2011
15
Notes
2011
USD
2010
USD
23,103,411
17,195,506
operatInG actIVItIes
Profit before tax
adjustments for:
Depreciation and amortisation
Gain on sale of available-for-sale investments
Provision for doubtful debts
Impairment of available-for-sale investments
Gain on sale of premises and equipment
Loss on revaluation of held for trading investments
Dividends and interest income
Share of profit from associated companies
Reinsurance assets
Insurance contract liabilities
Deferred policy acquisition costs
Insurance receivables
Trade receivables
Other assets
Unearned commission
Held for trading investments
Other liabilities
Net cash from operating activities
InVestInG actIVItIes
Purchase of premises and equipment
Proceeds from sale of premises equipment
Purchase of intangible assets
Purchase of available-for-sale investments
Proceeds from sale of available-for-sale investments
Purchase of held to maturity investments
Purchase of investment property
Dividends received from associated companies
Time deposits maturing – long term
Dividends and interest income
Net cash from (used in) investing activities
fInancInG actIVItIes
Dividends paid
Net cash used in financing activities
net cHanGe In casH and casH eQuIVaLents
Cash and cash equivalents at the beginning of the year
3,4
20
20
20
20
5
3
4
5
16
856,714
(170,757)
900,000
537,220
(8,206)
153,532
(7,612,185)
(552,864)
17,206,865
(25,180,233)
49,073,928
(3,721,476)
(8,590,303)
801,366
3,344,941
1,437,670
-
187,582
1,071,959
(1,463,230)
-
1,280,060
-
42,060
(8,579,242)
(575,159)
8,971,954
(5,497,749)
24,241,673
(5,727,220)
(2,707,296)
(1,037,660)
(3,709,482)
1,121,221
109,231
1,387,166
34,560,340
17,151,838
(216,909)
(706,468)
8,206
(7,667)
-
(203,811)
(17,578,443)
(44,384,574)
36,354,199
-
(167,028)
130,835
1,760,394
7,612,185
18,261,329
(3,000,000)
(323,337)
327,000
(5,505,342)
8,579,242
27,895,772
(26,955,961)
(4,301,270)
(4,301,270)
58,154,842
94,484,735
(2,867,514)
(2,867,514)
(12,671,637)
107,156,372
94,484,735
casH and casH eQuIVaLents at tHe end of tHe Year
14
152,639,577
16 International General Insurance Holdings Limited | fInancIaL stateMents
consoLIdated stateMent of cHanGe In eQuItY
AT 31 DeceMBer 2011
Issued
share
capital
USD
Foreign
currency
translation
reserve
Cumulative
change in
fair value of
investments
Retained
earnings
USD
USD
USD
Total
USD
at 1 January 2011
Profit for the year
Other comprehensive income
Total comprehensive income
Dividends paid during the year (note 16)
143,375,678
(269,090)
6,576,750
38,097,808
187,781,146
-
-
-
-
-
-
23,221,943
23,221,943
(17,562)
(1,250,471)
-
(1,268,033)
(17,562)
(1,250,471)
23,221,943
21,953,910
-
-
(4,301,270)
(4,301,270)
at 31 december 2011
143,375,678
(286,652)
5,326,279
57,018,481
205,433,786
at 1 January 2010
Profit for the year
Other comprehensive income
Total comprehensive income
Dividends paid during the year (note 16)
143,375,678
(208,050)
4,389,708
23,769,816
171,327,152
-
-
-
-
-
(61,040)
(61,040)
-
-
17,195,506
17,195,506
2,187,042
-
2,126,002
2,187,042
17,195,506
19,321,508
-
(2,867,514)
(2,867,514)
at 31 december 2010
143,375,678
(269,090)
6,576,750
38,097,808
187,781,146
International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
17
1. actIVItIes
International General Insurance Holdings Limited (“the Company”) is incorporated as a company limited by shares under the Companies
Law, DIFC Law No. 2 of 2004 on 7 May 2006 and is engaged in the business of re-insurance and insurance. The Company’s registered
office is at unit 1, Gate Village 01, P. O. Box 506646, International Financial Centre, Dubai.
The Company and its subsidiaries (together “the Group”) operate in the United Arab Emirates, Bermuda, United Kingdom, Jordan and
Malaysia.
2. BasIs of preparatIon
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS).
The consolidated financial statements have been presented in United States Dollars “USD” which is the Group’s functional currency.
The consolidated financial statements are prepared under the historical cost convention modified to include the measurement at fair
value of financial assets available-for-sale, financial assets held for trading and investment properties.
Basis of consolidation
The financial statements of the subsidiaries are prepared for the same reporting year as the Group, using consistent accounting
policies.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be
consolidated until the date that such control ceases.
All intra-group balances, transactions, income and expenses and profits and losses, including dividends resulting from intra-group
transactions, are eliminated in full.
The Group has the following subsidiaries:
Country of
incorporation
Activity
International General Insurance company Limited
Bermuda
reinsurance and insurance
International General Insurance underwriting
Jordan
underwriting agency
north star underwriting Limited
specialty Malls Investment co.
united Kingdom
underwriting agency
Jordan
real estate properties development and lease
Ownership
2011
2010
100% 100%
100% 100%
100% 100%
100% 100%
changes in accounting policies
The accounting policies adopted in the preparation of the consolidated financial statements are consistent with those of the previous
financial year, except for the following new and amended IFRS and IFRIC interpretations effective as of 1 January 2011:
Ias 24 related party disclosures (amendment)
The IASB issued an amendment to IAS 24 that clarifies the definitions of a related party. The new definitions emphasis a symmetrical
view of related party relationships and clarifies the circumstances in which persons and key management personnel affect related party
relationships of an entity. In addition, the amendment introduces an exemption from the general related party disclosure requirements
for transactions with government and entities that are controlled, jointly controlled or significantly influenced by the same government
as the reporting entity. The adoption of the amendment did not have any impact on the financial position or performance of the Group.
18 International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
2. BasIs of preparatIon (continued)
changes in accounting policies (continued)
Ias 32 financial Instruments: presentation – classification of rights Issues (amendment)
The IASB issued an amendment that alters the definition of a financial liability in IAS 32 to enable entities to classify rights issues and
certain options or warrants as equity instruments. The amendment is applicable if the rights are given pro rata to all of the existing
owners of the same class of an entity’s non-derivative equity instruments, to acquire a fixed number of the entity’s own equity
instruments for a fixed amount in any currency. The amendment has had no effect on the financial position or performance of the
Group because the Group does not have these type of instruments.
IfrIc 13 customer Loyalty programmes (determining the fair value of award credits)
The amendment to the interpretation had no effect on the financial position or performance of the Group.
IfrIc 14 prepayments of a minimum funding requirement (amendment)
The amendment to the interpretation had no effect on the financial position or performance of the Group.
IfrIc 19 extinguishing financial Liabilities with equity Instruments
The adoption of this interpretation did not have any impact on the financial position or performance of the Group.
standards issued but not yet effective
Standards issued but not yet effective up to the date of issuance of the Group’s financial statements are listed below. This listing of
standards and interpretations issued are those that the Group reasonably expects to have an impact on disclosures, financial position
or performance when applied at a future date. The Group intends to adopt these standards when they become effective.
IAS 1 Financial Statement Presentation – Presentation of Items of Other comprehensive Income
The amendments to IAS 1 change the grouping of items presented in OCI. Items that could be reclassified (or ‘recycled’) to profit or
loss at a future point in time (for example, upon derecognition or settlement) would be presented separately from items that will never
be reclassified. The amendment affects presentation only and has no impact on the Group’s financial position or performance. The
amendment becomes effective for annual periods beginning on or after 1 July 2012.
IAS 12 Income Taxes – recovery of Underlying Assets
The amendment clarified the determination of deferred tax on investment property measured at fair value. The amendment introduces
a rebuttable presumption that deferred tax on investment property measured using the fair value model in IAS 40 should be determined
on the basis that its carrying amount will be recovered through sale. Furthermore, it introduces the requirement that deferred tax on
non-depreciable assets that are measured using the revaluation model in IAS 16 always be measured on a sale basis of the asset. The
amendment becomes effective for annual periods beginning on or after 1 January 2012.
IAS 27 Separate Financial Statements (as revised in 2011)
As a consequence of the new IFRS 10 and IFRS 12, what remains of IAS 27 is limited to accounting for subsidiaries, jointly controlled
entities, and associates in separate financial statements. The Group does not present separate financial statements. The amendment
becomes effective for annual periods beginning on or after 1 January 2013.
IAS 28 Investments in Associates and Joint Ventures (as revised in 2011)
As a consequence of the new IFRS 11 and IFRS 12. IAS 28 has been renamed IAS 28 Investments in Associates and Joint Ventures,
and describes the application of the equity method to investments in joint ventures in addition to associates. The amendment becomes
effective for annual periods beginning on or after 1 January 2013.
IFrS 7 Financial Instruments: Disclosures — enhanced Derecognition Disclosure requirements
The amendment requires additional disclosure about financial assets that have been transferred but not derecognised to enable the
user of the Group’s financial statements to understand the relationship with those assets that have not been derecognised and their
associated liabilities. In addition, the amendment requires disclosures about continuing involvement in derecognised assets to enable
the user to evaluate the nature of, and risks associated with, the entity’s continuing involvement in those derecognised assets. The
amendment becomes effective for annual periods beginning on or after 1 July 2011. The amendment affects disclosure only and has
no impact on the Group’s financial position or performance.
IFrS 9 Financial Instruments: classification and Measurement
IFRS 9 as issued reflects the first phase of the IASBs work on the replacement of IAS 39 and applies to classification and measurement
of financial assets and financial liabilities as defined in IAS 39. The standard is effective for annual periods beginning on or after 1
January 2015. In subsequent phases, the IASB will address hedge accounting and impairment of financial assets. The completion of
this project is expected over the course of 2012. The adoption of the first phase of IFRS 9 will have an effect on the classification and
measurement of the Group’s financial instruments.
International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
19
2. BasIs of preparatIon (continued)
standards issued but not yet effective (continued)
IFrS 10 consolidated Financial Statements
IFRS 10 replaces the portion of IAS 27 Consolidated and Separate Financial Statements that addresses the accounting for consolidated
financial statements. It also includes the issues raised in SIC-12 Consolidation — Special Purpose Entities.
IFRS 10 establishes a single control model that applies to all entities including special purpose entities. The changes introduced by
IFRS 10 will require management to exercise significant judgement to determine which entities are controlled, and therefore, are
required to be consolidated by a parent, compared with the requirements that were in IAS 27. This standard becomes effective for
annual periods beginning on or after 1 January 2013.
IFrS 12 Disclosure of Involvement with Other entities
IFRS 12 includes all of the disclosures that were previously in IAS 27 related to consolidated financial statements, as well as all of the
disclosures that were previously included in IAS 31 and IAS 28. These disclosures relate to an entity’s interests in subsidiaries, joint
arrangements, associates and structured entities. A number of new disclosures are also required. This standard becomes effective for
annual periods beginning on or after 1 January 2013.
IFrS 13 Fair Value Measurement
IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements. IFRS 13 does not change when an entity
is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or
permitted. The Group is currently assessing the impact that this standard will have on the financial position and performance. This
standard becomes effective for annual periods beginning on or after 1 January 2013.
summary of significant accounting policies
revenue recognition
Gross premiums
Gross general insurance written premiums comprise the total premiums receivable for the whole period of cover provided by contracts
entered into during the accounting period. They are recognised on the date on which the policy commences. Premiums include
any adjustments arising in the accounting period for premiums receivable in respect of business written in prior accounting periods.
Rebates that form part of the premium rate, such as no-claim rebates, are deducted from the gross premium; others are recognised
as an expense. Premiums collected by intermediaries, but not yet received, are assessed based on estimates from underwriting or
past experience and are included in premiums written.
Unearned premiums are those proportions of premiums written in a year that relate to periods of risk after the reporting date. Unearned
premiums are calculated on a pro rata basis. The proportion attributable to subsequent periods is deferred as a provision for unearned
premiums.
reinsurance premiums
Gross general reinsurance premiums comprise the total premiums payable for the whole cover provided by contracts entered into the
period and are recognised on the date on which the policy incepts.
Premiums include any adjustments arising in the accounting period in respect of reinsurance contracts incepting in prior accounting
periods.
Unearned reinsurance premiums are those proportions of premiums written in a year that relate to periods of risk after the reporting
date. Unearned reinsurance premiums are deferred over the term of the underlying direct insurance policies for risks-attaching
contracts and over the term of the reinsurance contract for losses occurring contracts.
commission income
Insurance and investment contract policyholders are charged for policy administration services, investment management services,
surrenders and other contract fees. These fees are recognised as revenue over the period in which the related services are performed.
If the fees are for services provided in future periods, then they are deferred and recognised over those future periods.
claims
Claims, comprising amounts payable to contract holders and third parties and related loss adjustment expenses, net of salvage and
other recoveries, are charged to income as incurred. Claims comprise the estimated amounts payable, in respect of claims reported
to the Group and those not reported at the consolidated statement of financial position date.
The Group generally estimates its claims based on appointed loss adjusters or leading underwriters’ recommendations. In addition a
provision based on management’s judgement and the Group’s prior experience is maintained for the cost of settling claims incurred
but not reported at the consolidated statement of financial position date.
20 International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
2. BasIs of preparatIon (continued)
summary of significant accounting policies (continued)
Policy acquisition costs
Policy acquisition costs represent commissions paid to intermediaries and other direct costs incurred in relation to the acquisition
and renewal of insurance contracts which are deferred and expense over the terms of the insurance contracts to which they relate as
premiums are earned.
Liability adequacy test
At each statement of financial position date the Group assesses whether its recognised insurance liabilities are adequate using current
estimates of future cash flows under its insurance contracts. If that assessment shows that the carrying amount of its unearned
premiums (less related deferred policy acquisition costs) is inadequate in the light of estimated future cash flows, the entire deficiency
is immediately recognised in income and an unexpired risk provision created.
The Group does not discount its liability for unpaid claims as substantially all claims are expected be paid within one year of the
statement of financial position date.
reinsurance
The Group cedes insurance risk in the normal course of business for all of its businesses. Reinsurance assets represent balances due
from reinsurance companies. Amounts recoverable from reinsurers are estimated in a manner consistent with the outstanding claims
provision or settled claims associated with the reinsurer’s policies and are in accordance with the related reinsurance contract.
Reinsurance assets are reviewed for impairment at each reporting date, or more frequently, when an indication of impairment arises
during the reporting year. Impairment occurs when there is objective evidence as a result of an event that occurred after initial
recognition of the reinsurance asset that the Group may not receive all outstanding amounts due under the terms of the contract
and the event has a reliably measurable impact on the amounts that the Group will receive from the reinsurer. The impairment loss is
recorded in the consolidated statement of income.
Gains or losses on buying reinsurance are recognised in the consolidated statement of income immediately at the date of purchase
and are not amortised.
Ceded reinsurance arrangements do not relieve the Group from its obligations to policyholders.
The Group also assumes reinsurance risk in the normal course of business for life insurance and non-life insurance contracts where
applicable. Premiums and claims on assumed reinsurance are recognised as revenue or expenses in the same manner as they
would be if the reinsurance were considered direct business, taking into account the product classification of the reinsured business.
Reinsurance liabilities represent balances due to reinsurance companies. Amounts payable are estimated in a manner consistent with
the related reinsurance contract.
Premiums and claims are presented on a gross basis for both ceded and assumed reinsurance.
Reinsurance assets or liabilities are derecognised when the contractual rights are extinguished
or expire or when the contract is transferred to another party.
Reinsurance contracts that do not transfer significant insurance risk are accounted for directly through the statement of financial
position. These are deposit assets or financial liabilities that are recognised based on the consideration paid or received less any
explicit identified premiums or fees to be retained by the reinsured.
Investment income on these contracts is accounted for using the effective interest rate method when accrued.
Interest revenue
Interest revenue included in investment income is recognised as the interest accrues using the effective interest method, under which
the rate used exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying
amount of the financial asset.
Dividend revenue
Dividend revenue included in investment income is recognised when right to receive the payment is established.
International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
21
2. BasIs of preparatIon (continued)
summary of significant accounting policies (continued)
Premises and equipment
Premises and equipment is stated at cost less accumulated depreciation and any impairment in value. Depreciation is calculated on a
straight-line basis over the estimated useful lives using the following are the estimated useful lives (Note3).
Office buildings
Office furniture
Computers
Equipment
Leasehold improvement
Vehicles
Years
20
5
3
4
5
5
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future
economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the
asset is derecognised.
The assets’ residual values, useful lives and method of depreciation are reviewed and adjusted if appropriate at each financial year-
end. Impairment reviews take place when events or changes in circumstances indicate that the carrying value may not be recoverable.
Impairment losses are recognised in the consolidated statement of income as an expense.
Intangible assets
a)
Goodwill
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business
combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities acquired.
Goodwill arising from the investment in subsidiaries is separately shown under intangible assets, while that arising from the
investment in associates is shown as part of investment in associates and subsequently adjusted for any impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is from the date of acquisition allocated
to each of the Group’s cash-generating units, or groups of cash-generating units. Where the recoverable amount of the cash-
generating unit is less than the carrying value, an impairment loss is recognised.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed
for impairment, annually or more frequently, if events or changes in circumstances indicate that the estimated recoverable
amount of a cash-generating unit or group of cash-generating units is less than their carrying amount. Impairment losses are
charged to the consolidated statement of income.
b)
Intangible assets
Intangible assets acquired through business combinations are recorded at their fair value on that date. Other intangible
assets are measured on initial recognition at cost.
Intangible assets with finite lives are amortised over the useful economic lives, while intangible assets with indefinite useful
lives are assessed for impairment at each reporting date or when there is an indication that the intangible asset may be
impaired.
Internally generated intangible assets are not capitalised and are expensed in the consolidated statement of income.
Indications of impairment of intangible assets are reviewed and their useful economic lives are reassessed at each reporting
date. Adjustments are reflected in the current and subsequent periods.
Intangible assets include computer software and software licenses. These intangible assets are amortised on a straight line
basis over their estimated economic useful lives of 5 years.
22 International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
2. BasIs of preparatIon (continued)
summary of significant accounting policies (continued)
Impairment and uncollectibility of financial assets
An assessment is made at each consolidated statement of financial position date to determine whether there is objective evidence that
a specific financial asset may be impaired. If such evidence exists, any impairment loss is recognised in the consolidated statement
of income.
Impairment is determined as follows:
a) For assets carried at fair value, impairment is the difference between cost and fair value;
b) For assets carried at cost, impairment is the difference between cost and the present value of future cash flows discounted at the
current market rate of return for a similar financial asset; and
c) For assets carried at amortised cost, impairment is based on estimated cash flows discounted at the original effective interest rates.
Derecognition of financial instruments
The derecognition of a financial instrument takes place when the Group no longer controls the contractual rights that comprise the
financial instrument, which is normally the case when the instrument is sold, or all the cash flows attributable to the instrument are
passed through to an independent third party.
Investment in associated companies
The Group’s investment in its associate is accounted for using the equity method of accounting. An associate is an entity in which the
Group has significant influence and which is neither a subsidiary nor a joint venture.
Under the equity method, the investment in the associate is carried in the statement of financial position at cost plus post-acquisition
changes in the Group’s share of net assets of the associate. Goodwill relating to an associate is included in the carrying amount of the
investment and is neither amortised nor individually tested for impairment.
The consolidated statement of income reflects the share of the results of operations of the associate. Where there has been a change
recognised directly in the equity of the associate, the Group recognises its share of any changes and discloses this, when applicable,
in the consolidated statement of changes in equity. Profits or losses resulting from transactions between the Group and the associate
are eliminated to the extent of the interest in the associate.
The share of profit of the associate is shown on the face of the consolidated statement of income. This is profit attributable to equity
holders of the associate and, therefore, is profit after tax and non-controlling interests in the subsidiaries of the associates.
The financial statements of the associate are prepared for the same reporting period as the Group. Where necessary, adjustments are
made to bring its accounting policies in line with the Group’s.
After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on
the Group’s investment in associates. The Group determines at each reporting date, whether there is any objective evidence that the
investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between
the recoverable amount of the associate and its carrying value and recognises the amount in the ‘share of profit of an associate’ in the
income statement.
Upon loss of significant influence over the associate, the Group measures and recognises any remaining investment at its fair value.
Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the remaining
investment and proceeds from disposal is recognized in profit or loss.
Investment properties
Investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost of replacing
part of an existing investment property at the time that cost is incurred if the recognition criteria are met; and excludes the costs of
day to day servicing of an investment property. Subsequent to initial recognition, investment properties are stated at fair value, which
reflects market conditions at the reporting date. Gains or losses arising from changes in the fair values of investment properties are
included in the consolidated statement of income in the period in which they arise.
Investment properties are derecognised when either they have been disposed of or when the investment property is permanently
withdrawn from use and no future economic benefit is expected from its disposal.
The difference between the net disposal proceeds and the carrying amount of the asset is recognised in the consolidated statement
of income in the period of derecognition.
International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
23
2. BasIs of preparatIon (continued)
summary of significant accounting policies (continued)
Investment properties (continued)
Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to
owner occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use. If owner occupied
property becomes an investment property, the Group accounts for such property in accordance with the policy stated under property,
plant and equipment up to the date of change in use.
Financial assets
Financial assets within the scope of IAS 39 are classified as financial assets at fair value through profit or loss, held-to-maturity
investments or available-for-sale financial assets. The Group determines the classification of its financial assets at initial recognition.
All financial assets are recognised initially at fair value plus, in the case of investments not at fair value through profit or loss, directly
attributable transaction costs.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the
marketplace (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset.
The subsequent measurement of financial assets depends on their classification as follows:
Insurance receivables
Insurance companies and intermediaries receivables are recognised when due and measured on initial recognition at the fair value
of the consideration received or receivable. Subsequent to initial recognition, insurance receivables are measured at amortised cost,
using the effective interest rate method. The carrying value of insurance receivables is reviewed for impairment whenever events or
circumstances indicate that the carrying amount may not be recoverable, with the impairment loss recorded in the income statement.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss includes financial assets held for trading and financial assets designated upon initial
recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of
selling or repurchasing in the near term. Financial assets at fair value through profit and loss are carried in the statement of financial
position at fair value with changes in fair value recognised in the consolidated statement of income. The Group has not designated any
financial assets upon initial recognition as at fair value through profit or loss.
Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as held-to-maturity when the
Group has the positive intention and ability to hold it to maturity. After initial measurement held-to-maturity investments are measured
at amortised cost using the effective interest rate method, less impairment. Impairment losses are recognised in the consolidated
statement of income.
Available-for-sale financial investments
Available-for-sale financial investments include equity and debt securities. Equity investments classified as available-for sale are those,
which are neither classified as held for trading nor designated at fair value through profit or loss. Debt securities in this category are
those which are intended to be held for an indefinite period of time and which may be sold in response to needs for liquidity or in
response to changes in the market conditions. After initial measurement, available-for-sale financial investments are subsequently
measured at fair value with unrealised gains or losses recognised as other comprehensive income in the available-for-sale reserve until
the investment is derecognised, at which time the cumulative gain or loss is recognised in other operating income, or determined to
be impaired, at which time the cumulative loss is recognised in the consolidated statement of income and removed from the available-
for-sale reserve.
cash and cash equivalents
For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash in hand, bank balances, and
short-term deposits with an original maturity of three months or less.
Provisions
Provisions are recognised when the Group has an obligation (legal or constructive) as a result of a past event, and the costs to settle
the obligation are both probable and able to be reliably measured.
Share based payment
A phantom share option plan linked to the value of an ordinary share of the Group as approved by the Board of directors has been
declared during 2011. The scheme is applicable to senior executives with more than 12 months service. The amount of bonus is
determined by reference to the increase in the book value of shares covered by the option. No shares are actually issued or transferred
to the option holder on the exercise of the option.
The options vest equally over a span of 5 years from the grant date. The incentive amounts to the excess of book value on vesting
date over grant date with an additional 20% on the excess.
24 International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
2. BasIs of preparatIon (continued)
summary of significant accounting policies (continued)
Offsetting
Financial assets and financial liabilities are offset and the net amount reported in the consolidated statement of financial position only
when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise
the assets and settle the liability simultaneously. Income and expense is not offset in the consolidated statement of income unless
required or permitted by any accounting standard or interpretation.
Foreign currencies
The Group’s consolidated financial statements are presented in United States Dollars, which is also the functional currency of the
Group. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity
are measured using that functional currency.
Transactions and balances
Transactions in foreign currencies are initially recorded by the Group entities at their respective functional currency rates prevailing at
the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency
spot rate of exchange ruling at the reporting date. All differences are taken to the consolidated statement of income. Non-monetary
items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the
initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the
date when the fair value is determined.
Group companies
The assets and liabilities of foreign operations are translated into United States Dollars at the rate of exchange prevailing at the
reporting date and their statements of income are translated at exchange rates prevailing at the date of the transactions. The
exchange differences arising on the translation are recognised in consolidated statement of comprehensive income. On disposal of
a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in the
consolidated statement of income.
Taxation
The charge or credit for taxation is based upon the profit or loss for the year and takes into account taxation deferred because of
timing differences between the treatment of certain items for taxation and accounting purposes.
Deferred tax is recognised, without discounting, in respect of all timing differences between the treatment of certain items for taxation
and accounting purposes, which have arisen but not reversed by the statement of financial position date.
Leasing
The Group has no finance lease
The determination of whether an arrangement is a lease, or contains a lease, is based on the substance of the arrangement at the
inception date and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or
assets and the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement.
Group as a lessee
Finance leases that transfer to the Group substantially all of the risks and benefits incidental to ownership of the leased item, are
capitalised at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum
lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve
a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance cost in the income
statement.
Leased assets are depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain
ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease
term.
Leases that do not transfer to the Group substantially all the risks and benefits incidental to ownership of the leased items are
operating leases. Operating lease payments are recognised as an expense in the income statement on a straight line basis over the
lease term. Contingent rentals are recognised as an expense in the period in which they are incurred.
Group as a lessor
Leases in which the Group does not transfer substantially all of the risks and benefits of ownership of the asset are classified as
operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset
and recognised over the lease term on the same bases as rental income. Rental income from operating leases is recognized on a
straight-line basis over the term of lease.
International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
25
2. BasIs of preparatIon (continued)
summary of significant accounting policies (continued)
Fair values
The fair value of financial instruments that are actively traded in organized financial markets is determined by reference to quoted
market bid prices for assets and offer prices for liabilities, at the close of business on the consolidated statement of financial position
date. If quoted market prices are not available, reference is also be made to broker or dealer price quotations.
For financial instruments where there is not an active market, the fair value is determined by using valuation techniques. Such
techniques include using recent arm’s length transactions, reference to the current market value of another instrument which is
substantially the same and/or discounted cash flow analysis. For discounted cash flow techniques, estimated future cash flows are
based on management’s best estimates and the discount rate used is a market related rate for a similar instrument.
If the fair value cannot be measured reliably, these financial instruments are measured at cost, being the fair value of the consideration
paid for the acquisition of the investment or the amount received on issuing the financial liability. All transaction costs directly attributable
to the acquisition are also included in the cost of the investment.
Judgements
In the process of applying the Group’s accounting policies, management has made the following judgements, apart from those
involving estimations, which have the most significant effect in the amounts recognised in the financial statements:
Classification of investments
Management decides on acquisition of an investment whether it should be classified as held for trading or available for sale or held to
maturity.
The group classifies investments as trading if they are acquired primarily for the purpose of making a short term profit by the dealers.
Financial assets are classified as held to maturity if the Group has the positive intention and ability to hold up till maturity.
All other investments are classified as financial assets available -for- sale.
Impairment of investments
The group treats financial assets available-for-sale as impaired when there has been a significant or prolonged decline in the fair value
below cost or where other objective evidence of impairment exists. The determination of what is “significant” or “prolonged” requires
considerable judgement. In addition, the Group evaluates other factors, including normal volatility in share prices for quoted equities
and the future cash flows and discount factors for unquoted equities.
estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the consolidated statement of financial
position date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year are discussed below:
Valuation of outstanding claims, whether reported or not
Considerable judgement by management is required in the estimation of amounts due to contract holders arising from claims made
under insurance contracts. Such estimates are necessarily based on assumptions about several factors involving varying, and possibly
significant, degrees of judgement and uncertainty and actual results may differ from management’s estimates resulting in future
changes in estimated liabilities.
In particular, estimates have to be made both for the expected ultimate cost of claims reported at the consolidated statement of
financial position date and for the expected ultimate cost of claims incurred but not yet reported (IBNR) at the consolidated statement
of financial position date. The primary technique adopted by management in estimating the cost of notified and IBNR claims, is that of
using past claim settlement trends to predict future claims settlement trends.
Claims requiring court or arbitration decisions are estimated individually. Independent loss adjustors normally estimate property claims.
Management reviews its provisions for claims incurred, and claims incurred but not reported, on a quarterly basis.
Investment properties
Investment properties are stated at fair value which is determined based on valuations performed by professional independent valuers.
26 International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
3. preMIses and eQuIpMent
Office
building
Office
furniture
Computers
Equipment
Leasehold
improvements
Vehicles
Total
USD
USD
USD
USD
USD
USD
USD
cost
At 1 January 2011
1,836,188
1,284,365
446,547
185,557
987,867
374,508
5,115,032
Additions
15,405
55,072
68,035
7,746
11,604
59,047
216,909
Written off and disposals
-
(101,322)
-
(27,948)
(83,644)
(16,902)
(229,816)
At 31 December 2011
1,851,593
1,238,115
514,582
165,355
915,827
416,653
5,102,125
depreciation
At 1 January 2011
Deprecation for the year
99,413
70,680
347,352
258,250
345,610
108,697
88,433
42,585
Written off and disposals
-
(101,322)
-
(27,948)
281,083
240,567
(83,644)
197,804
1,379,959
59,780
760,295
(16,902)
(229,816)
At 31 December 2011
170,093
504,280
434,043
123,334
438,006
240,682
1,910,438
Net carrying amount
At 31 December 2011
1,681,500
733,835
80,539
42,021
477,821
175,971
3,191,687
cost
At 1 January 2010
1,826,810
1,053,063
385,408
146,330
Additions
9,378
231,302
61,139
39,227
At 31 December 2010
1,836,188
1,284,365
446,547
185,557
743,382
244,485
987,867
253,571
4,408,564
120,937
706,468
374,508
5,115,032
depreciation
At 1 January 2010
Depreciation for the year
At 31 December 2010
Net carrying amount
-
99,413
99,413
146,197
201,155
347,352
246,803
98,807
72,768
35,929
345,610
108,697
72,139
150,352
47,452
688,259
691,700
197,804
1,379,959
208,944
281,083
At 31 December 2010
1,736,775
937,013
100,937
76,860
706,784
176,704
3,735,073
The depreciation charge for the year of USD 760,295 (2010: USD 691,700) has been included in general and administrative expenses.
Fully depreciated premises and equipment still in use amounted to USD 530,351 as at 31 December 2011 (2010: 417,526).
International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
27
Goodwill
2011
Computer
software
license
USD
USD
-
-
-
-
-
-
-
765,798
7,667
773,465
466,808
96,419
563,227
210,238
Goodwill
2010
Computer
software
license
USD
USD
287,486
-
287,486
-
287,486
287,486
-
561,987
203,811
765,798
374,035
92,773
466,808
298,990
Total
USD
765,798
7,667
773,465
466,808
96,419
563,227
210,238
Total
USD
849,473
203,811
1,053,284
374,035
380,259
754,294
298,990
4. IntanGIBLe assets
cost
Opening balance
Additions
Closing balance
amortization
Opening balance
Amortization for the year
Closing balance
net book value
cost
Opening balance
Additions
Closing balance
amortization
Opening balance
Amortization for the year
Closing balance
net book value
Goodwill was allocated to North Star Underwriting Limited which was considered to be a cash generating unit. The recoverable
amount of the cash generating unit was determined by calculating cash flow projections based on financial budgets approved by
senior management covering a five year period. Goodwill allocated to the cash generating unit was tested for impairment in previous
year, and since the recoverable amount of the cash generating unit was assessed to be nil, the goodwill was impaired in full in previous
year.
28 International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
5. InVestMent In assocIated coMpanIes
In 2002, the Group acquired a 33% equity ownership interest in companies registered in Lebanon as shown below:
Country of
incorporation
Lebanon
Lebanon
Lebanon
Lebanon
Star Rock SAL Lebanon
Sina SAL Lebanon
Silver Rock SAL Lebanon
Golden Rock SAL Lebanon
Movement on investment in associates was as follows:
Opening balance
Share of profit or results of associated companies
Dividends received
The following table includes summarised information of the Group’s investments in associates:
Share of associates’ statement of financial position
Current assets
Non-current assets
Current liabilities
Net assets
Share of associates’ revenues and results
Revenues
profit
Ownership
2010
33%
33%
33%
33%
2010
USD
2011
33%
33%
33%
33%
2011
USD
11,280,888
11,032,729
552,864
(130,835)
575,159
(327,000)
11,702,917
11,280,888
2011
USD
2010
USD
553,840
16,901,477
(5,752,400)
11,702,917
604,829
16,955,064
(6,279,005)
11,280,888
800,090
829,018
552,864
575,159
Investment properties of the associates are stated at fair value, which has been determined based on valuations performed by
professional independent valuers who are specialists in valuing these types of investment properties. The fair value represents the
amount, which the assets could be exchanged between a knowledgeable, willing seller in an arm’s length transaction at the date of
valuation. All the investment properties generated rental income during the current period and the prior years.
International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
29
6. InVestMent propertY
The following table includes summarised information of the Group’s investment property:
Opening balance
Additions
Closing balance
Opening balance
Additions
closing balance
Commercial
building
USD
2011
Land
USD
Total
USD
20,534,276
8,461,850
28,996,126
167,028
-
167,028
20,701,304
8,461,850
29,163,154
Commercial
building
USD
20,429,402
104,874
20,534,276
2010
Land*
USD
8,243,387
218,463
8,461,850
Total
USD
28,672,789
323,337
28,996,126
*The land is registered in the name of the Directors of the company. The company has obtained an irrevocable proxy over this investment
property.
The carrying amount approximates the fair value of the investment property based on valuations performed by independent valuer.
30 International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
7. InVestMents
Held to maturity
Unquoted bonds*
Held for trading
Quoted funds
Available-for-sale
Quoted bonds and debt securities with fixed interest rate
Quoted equities
Quoted funds and alternative investments
Unquoted government bonds and debt securities with fixed interest rate
Unquoted equities
* Maturity of these bonds as at 31 December 2011 are as follows:
2011
USD
2010
USD
4,690,141
4,690,141
1,525,702
1,679,234
69,711,890
44,555,931
6,681,449
-
7,287,118
71,847,200
61,360,659
5,623,167
1,410,934
8,387,118
128,236,388
148,629,078
134,452,231
154,998,453
Maturity
6 June 2012
27 October 2012
carrying amount
effective interest value
1,690,141
3,000,000
4,690,141
9.5%
4.0%
Provision for impairment for equity investments charged to the consolidated statement of income amounted to USD 537,220 (2010:
USD 1,280,060).
International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
31
8. deferred poLIcY acQuIsItIon costs
Opening balance
Acquisition costs
Charged to consolidated statement of income
9. Insurance receIVaBLes
Receivables from insurance companies and intermediaries
Reinsurers – amounts due in respect of claims paid
Less: provision for doubtful debt
2011
USD
2010
USD
25,730,470
39,308,236
20,003,250
37,751,436
(35,586,760)
(32,024,216)
29,451,946
25,730,470
2011
USD
2010
USD
101,302,233
225,363
(900,000)
84,555,470
1,430,286
-
100,627,596
85,985,756
All of the above amounts are due within twelve months of the statement of financial position date (Note 23).
It is not the practice of the Group to hold collaterals as security. Therefore the receivable are unsecured.
10. trade receIVaBLes
This amount represents the balances due from the Specialty Mall customers against rental income. There are no impaired trade
receivables and management believes that the trade receivables will be recovered in full.
11. otHer assets
Accrued interest income
Advance payment on investments
Prepaid expenses
Accrued dividend income
Refundable deposits
Employees receivables
Deferred tax assets
Others
2011
USD
1,687,268
-
322,620
-
88,732
284,842
118,532
168,670
2,670,664
2010
USD
1,338,608
2,782,299
246,432
1,032,728
74,827
187,294
-
234,885
5,897,073
32 International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
12. Insurance contract LIaBILItIes
2011
reinsurers’
share
USD
Gross
USD
Net
USD
2010
reinsurers’
share
USD
Gross
USD
Net
USD
Unearned premiums
120,947,599
(31,886,053)
89,061,546
103,402,699
(28,106,769)
75,295,930
Outstanding claims
187,588,776
(55,956,166)
131,632,610
156,059,748
(34,756,238)
121,303,510
308,536,375
(87,842,219)
220,694,156
259,462,447
(62,863,007)
196,599,440
a) Unearned premiums
2011
reinsurers’
share
USD
Gross
USD
Net
USD
2010
reinsurers’
share
USD
Gross
USD
Net
USD
Opening balance
Premiums written
103,402,699
(28,106,769)
75,295,930
83,238,624
(21,561,486)
61,677,138
202,786,867
(69,745,208)
133,041,659
179,333,354
(68,012,218)
111,321,136
Premiums earned
(185,241,967)
65,965,924
(119,276,043)
(159,169,279)
61,466,935
(97,702,344)
120,947,599
(31,886,053)
89,061,546
103,402,699
(28,106,769)
75,295,930
b) Outstanding claims
2011
reinsurers’
share
USD
Gross
USD
Net
USD
2010
reinsurers’
share
USD
Gross
USD
Net
USD
At the beginning of the year
Reported claims
114,059,748
(34,756,238)
79,303,510
112,482,150
(39,502,140)
72,980,010
Claims incurred but not
reported
42,000,000
-
42,000,000
39,500,000
-
39,500,000
156,059,748
(34,756,238)
121,303,510
151,982,150
(39,502,140)
112,480,010
Claims paid
(78,896,677)
23,390,766
(55,505,911)
(90,091,258)
42,360,643
(47,730,615)
Provided during the year
related to current accident
year
Provided during the
year related to previous
accident years
124,151,705
(47,970,694)
55,489,011
79,121,736
(36,284,633)
42,837,103
(13,726,000)
3,380,000
(10,346,000)
15,047,120
(1,330,108)
13,717,012
At the end of the year
187,588,776
(55,956,166)
131,632,610
156,059,748
(34,756,238)
121,303,510
At the end of the year
Reported claims
138,288,776
(55,956,166)
82,332,610
114,059,748
(34,756,238)
79,303,510
Claims incurred but not
reported
49,300,000
-
49,300,000
42,000,000
-
42,000,000
187,588,776
(55,956,166)
131,632,610
156,059,748
(34,756,238)
121,303,510
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34 International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
13. reInsurance assets
Reinsurance share of unearned premiums (note 12)
Reinsurance share of outstanding claims (note 12)
Deferred XOL premium
14. casH and BanK BaLances
Cash and bank balances
Time deposits – short term
Cash and cash equivalents
Time deposits – long term
2011
USD
2010
USD
31,886,053
55,956,166
6,489,838
94,332,057
28,106,769
34,756,238
6,288,817
69,151,824
2011
USD
2010
USD
49,753,074
102,886,503
152,639,577
5,444,160
24,495,024
69,989,711
94,484,735
7,204,554
158,083,737
101,689,289
The time deposits, which are substantially denominated in US Dollars, are made for varying periods of between one month to two
years depending on the immediate cash requirements of the Group.
All deposits earned an average variable interest rate of 1.73% (2010: 2.76%).
15. Issued sHare capItaL
shares of usd 1 each
16. dIVIdends paId
authorised, issued and fully paid
2011
USD
2010
USD
143,375,678
143,375,678
At a meeting held on 21 March 2011, the shareholders resolved to pay dividend of USD 0.03 per share amounting to USD 4,301,270
(2010: 2,867,514) related to the year ended 31 December 2010.
17. otHer LIaBILItIes
Accounts payable
Accrued expenses *
2011
USD
579,912
2,305,682
2,885,594
2010
USD
1,342,525
1,355,487
2,698,012
* This includes an accrual of USD 13,500 in respect of phantom shares as vested upon designated employees of the Group.
International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
35
18. Insurance paYaBLes
Payables due to insurance companies and intermediaries
Reinsures – amounts due in respect of ceded premium
2011
USD
7,366,319
30,686,056
38,052,375
2010
USD
8,997,180
22,086,096
31,083,276
19. unearned coMMIssIons
Movement in unearned commissions recoginsed in the consolidated statement of financial position is following:
Opening balance
Commissions received
Commissions earned
20. InVestMent IncoMe
Interest
Dividends
Gain on sale of available-for-sale investments
Fair value change of held for trading investments
Impairment on available-for-sale investments (note 7)
Rental income, net
2011
USD
7,776,721
17,220,492
2010
USD
6,655,500
14,389,615
(15,782,822)
(13,268,394)
9,214,391
7,776,721
2011
USD
6,147,815
1,464,370
170,757
(153,532)
(537,220)
904,478
7,996,668
2010
USD
6,178,579
2,400,663
1,463,230
(42,060)
(1,280,060)
789,908
9,510,260
21. coMMItMents and contInGencIes
As of the date of the financial statements, the Group is contingently liable for the following:
- Letters of Guarantee amounting to USD 17,373 (31 December 2010: USD 12,225) to the order of the Jordanian Ministry of Trade
and Industry with margin of USD 1,737 (31 December 2010: USD 1,222).
- Letters of Credit amounting to USD 32,977,488 to the order of reinsurance companies (31 December 2010: USD 30,030,471) for
collateralizing insurance contract liabilities in accordance with the reinsurance arrangements.
- Letter of Guarantee amounting to USD 373,192 to the order of Friends Provident Life Assurance limited (31 December 2010: USD
373,192) for collateralizing rent payment obligation in one of the Group entity’s office premises.
36 International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
22. reLated partY transactIons
Related parties represent major shareholders, associates, directors and key management personnel of the Group and entities
controlled, jointly controlled or significantly influenced by such parties, Pricing policies and terms of these transactions are approved
by the Group’s management.
Transactions with related parties included in the consolidated financial statements are as follows:
Consolidated statement of income
Commission paid
2011
USD
2010
USD
Eastern Insurance Brokers Ltd – Owned by immediate family member of the major
shareholder
140,353
63,054
Compensation of key management personnel of the Group, consisting of short term salaries and benefits was USD 4,968,927 and
other compensations of USD 78,469 (31 December 2010: USD 3,386,601).
23. rIsK ManaGeMent
The risks faced by the Group and the way these risks are mitigated by management are summarised below.
Insurance risk
Insurance risk includes the risks of inappropriate underwriting, ineffective management of underwriting, inadequate controls over
exposure management in relation to catastrophic events and insufficient reserves for losses including claims incurred but not reported.
To manage this risk, the Group’s underwriting function is conducted in accordance with a number of technical analytic protocols which
includes defined underwriting authorities, guidelines by class of business, rate monitoring and underwriting peer reviews.
The risk is further protected by reinsurance programmes which respond to various arrays of loss probabilities.
The Group has in place effective exposure management system. Aggregate exposure is modelled and tested against different stress
scenarios to ensure adherence to Group’s overall risk appetite and alignment with reinsurance programmes and underwriting strategies.
Loss reserve estimates are inherently uncertain. Reserves for unpaid losses are the largest single component of the liabilities of the
Group. Actual losses that differ from the provisions, or revisions in the estimates, can have a material impact on future earnings and
the statement of financial position. The Group has in house experienced actuarial set up reviewing and monitoring the reserving policy
and its implementation at quarterly intervals. They work closely with the underwriting and claims team to ensure understanding of the
Group’s exposure and loss experience.
In addition, the Group receives external independent analysis of its reserve requirements on quarterly basis.
In order to minimise financial exposure arising from large claims, the Group, in the normal course of business, enters into contracts
with other parties for reinsurance purposes. Such reinsurance arrangements provide for greater diversification of business, allow
management to control exposure to potential losses arising from large risks, and provide additional capacity for growth. A significant
portion of the reinsurance is effected under treaty, facultative and excess-of-loss reinsurance contracts.
International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
37
23. rIsK ManaGeMent (continued)
Geographical concentration of risks
The Group’s insurance risk passed on geographical concentration of risk is illustrated in the table below:
2011
Europe
Middle / Far East & Africa
North America
Rest of the World
2010
Europe
Middle / Far East & Africa
North America
Rest of the World
Gross written
premium
Concentration
Percentage
USD
38,529,505
91,254,090
8,111,475
64,891,797
202,786,867
%
19%
45%
4%
32%
Gross written
premium
Concentration
Percentage
USD
34,073,337
105,806,679
7,173,334
32,280,004
179,333,354
%
19%
59%
4%
18%
Financial risk
The Group’s principal financial instruments are financial assets available-for-sale, financial assets held for trading, financial assets held
to maturity, receivables arising from insurance, investment in associates, investment properties and reinsurance contracts, trading
investments and cash and cash equivalents.
The Group does not enter into derivative transactions.
The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk, credit risk, market price risk
and liquidity risk. The board reviews and agrees policies for managing each of these risks and they are summarised below.
The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk, credit risk, market price risk
and liquidity risk. The board reviews and agrees policies for managing each of these risks and they are summarised below.
Interest rate risk
Interest rate risk arises from the possibility that changes in interest rates will affect future profitability or the fair values of financial
instruments. The Group is exposed to interest rate risk on certain of its investments and cash and cash equivalents. The Group limits
interest rate risk by monitoring changes in interest rates in the currencies in which its cash and interest bearing investments and
borrowings are denominated
38 International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
23. rIsK ManaGeMent (continued)
Details of maturities of the major classes of financial assets are as follows:
2011
Less than 1
year
1 to 5
years
More than 5
years
Non-interest
bearing items
Total
Effective
Interest Rate
on interest
bearing assets
Trading investments
USD
-
USD
-
USD
USD
USD
(%)
-
1,525,702
1,525,702
Available-for-sale investments
9,708,299
33,939,644
26,063,947
58,524,498
128,236,388
Held to maturity investments
1,690,141
-
3,000,000
Cash and bank balances
152,638,877
5,444,860
-
-
-
-
-
-
-
-
4,690,141
158,083,737
100,627,596
100,627,596
236,294
236,294
94,332,057
94,332,057
-
-
-
-
164,037,317
39,384,504
29,063,947
255,246,147
487,731,915
Insurance receivables
Trade receivables
Reinsurance assets
2010
Trading investments
-
-
-
1,679,234
1,679,234
Available-for-sale investments
12,553,656
43,472,492
15,821,051
76,781,879
148,629,078
Held to maturity investments
-
1,690,141
3,000,000
Cash and bank balances
96,245,129
5,444,160
Insurance receivables
Trade receivables
Reinsurance assets
-
-
-
-
-
-
-
-
-
-
-
-
4,690,141
101,689,289
85,985,756
85,985,756
1,037,660
1,037,660
69,151,824
69,151,824
108,798,785
50,606,793
18,821,051
234,636,353
412,862,982
5.72
5.99
1.19
-
-
-
5.23
5.98
2.20
-
-
-
There is no significant difference between contractual repricing or maturity dates.
The following table demonstrates the sensitivity of income statement to reasonably possible changes in interest rates, with all other
variables held constant.
The sensitivity of the income statement is the effect of the assumed changes in interest rates on the Group’s profit for the year, based
on the floating rate financial assets and financial liabilities held at 31 December.
2011
2010
Increase/
decrease
in basis points
Effect on profit
for the year
+ 25
- 50
+ 25
- 50
USD
576,571
(1,153,142)
437,520
(875,040)
Foreign currency risk
Foreign currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates.
Management believes that there is minimal risk of significant losses due to exchange rate fluctuations since predominantly 84% of the
business transactions are in US Dollars and consequently the Group does not hedge its foreign currency exposure.
International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
39
23. rIsK ManaGeMent (continued)
credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a
financial loss.
The Group is exposed to credit risk primarily from unpaid insurance receivables and fixed income instruments.
The Group has in place credit appraisal policies and procedures for inward business and receivables from insurance transactions are
monitored on an ongoing basis to restrict Group’s exposure to doubtful debts.
The Group has in place security standards applicable to all reinsurance purchases and monitors the financial status of all reinsurance
debtors at regular intervals.
The Group’s portfolio of fixed income investment is managed by the investments committee in accordance with the investment policy
established by the board of directors which has various credit standards for investment in fixed income securities.
Reinsurance and fixed income investments are monitored for the occurrence of a downgrade or other changes that might casue them
to fall below the Group’s security standards. If this occurs, management takes appropriate action to mitigate any loss to the Group.
The Group’s bank balances are maintained with a range of international and local banks in accordance with limits set by the board of
directors.
There are no significant concentrations of credit risk within the Group. The table below provides information regarding the credit risk
exposure of the Group by classifying assets according to the Group’s credit rating of counterparties:
Neither past due nor impaired
Investment
grade
Non investment
grade
(satisfactory)
Non investment
grade
(un-satisfactory)
Past due but not
impaired
2011
USD
USD
USD
USD
Total
USD
Available-for-sale investments
67,375,228
60,861,160
Investments held for trading
Held to maturity investments
Insurance receivables
Reinsurance assets
-
3,000,000
1,525,702
1,690,141
-
69,101,813
19,662,937
68,179,282
Cash and bank balances
90,093,897
67,989, 840
180,132,062
269,347,938
2010
Available-for-sale investments
75,145,910
73,483,168
Investments held for trading
Held to maturity investments
Insurance receivables
Reinsurance assets
Cash and bank balances
-
3,000,000
1,679,234
1,690,141
59,491,299
20,957,519
41,905,488
42,584,763
59,104,526
141,688,192
237,353,856
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
128,236,388
1,525,702
4,690,141
31,525,783
100,627,596
-
-
87,842,219
158,083,737
31,525,783
481,005,783
-
-
-
148,629,078
1,679,234
4,690,141
26,494,457
85,985,756
-
-
62,863,007
101,689,289
26,494,457
405,536,505
40 International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
23. rIsK ManaGeMent (continued)
credit risk (Continued)
The following table provides an aging analysis of receivables arising from insurance and reinsurance contracts past due but not
impaired:
past due but not impaired
Neither past
due nor
impaired
Up to 90
days
91 to 180
days
181 to 270
days
271 to 360
days
Over 360
days
Total
USD
USD
USD
USD
USD
USD
USD
31 December 2011
69,101,813
15,765,386
7,351,315
3,279,923
3,488,433
1,640,726 100,627,596
31 December 2010
59,491,299
13,407,158
6,581,777
2,249,766
2,536,041
1,719,715
85,985,756
For assets to be classified as ‘past due and impaired’ contractual payments are in arrears for more than 360 days and an impairment
adjustment is recorded in the consolidated statement of income for this. When the credit exposure is adequately secured, arrears
more than 360 days might still be classified as ‘past due but not impaired’, with no impairment adjustment recorded.
The following table provides an aging analysis of trade receivables arising from Specialty Mall customers past due but not impaired:
past due but not impaired
Neither past due
nor impaired
Up to 90 days
91 to 180 days
Total
USD
236,294
31 December 2011
31 December 2010
USD
129,946
647,737
USD
85,636
389,923
USD
20,712
-
1,037,660
For assets to be classified as ‘past due and impaired’ contractual payments are in arrears for more than 360 days and an impairment
adjustment is recorded in the consolidated statement of income for this. When the credit exposure is adequately secured, arrears
more than 360 days might still be classified as ‘past due but not impaired’, with no impairment adjustment recorded.
Market price risk
Market price risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market prices (other than those
arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual security, or its
issuer, or factors affecting all securities traded in the market.
The Group’s equity price risk exposure relates to financial assets whose values will fluctuate as a result of changes in market prices.
The following table demonstrates the sensitivity of the profit for the period and the cumulative changes in fair value to reasonably
possible changes in equity prices, with all other variables held constant. The effect of decreases in equity prices is expected to be
equal and opposite to the effect of the increases shown.
2011
Amman Stock Exchange
Dubai International Financial Exchange
Other quoted
2010
Amman Stock Exchange
Dubai International Financial Exchange
Other quoted
Change in
equity price
Effect on profit for
the year
USD
5%
5%
5%
5%
5%
5%
USD
-
-
76,285
-
-
83,962
Effect on
equity
USD
79,190
1,236,237
912,369
472,882
1,205,183
909,834
International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
41
23. rIsK ManaGeMent (continued)
Market price risk (Continued)
The Group also has unquoted investments carried at cost where the impact of changes in equity prices will only be reflected when the
investment is sold or deemed to be impaired, when the consolidated statement of income will be impacted.
The Group limits market risk by maintaining a diversified portfolio and by monitoring of developments in equity markets.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its commitments associated with insurance contracts and financial
liabilities as they fall due.
The Group continually monitors its cash and investments to ensure that the Group meets its liquidity requirements. The Group’s asset
allocation is designed to enable insurance liabilities to be met with current assets.
All liabilities are non-interest bearing liabilities.
The table below summarizes the maturity profile of the company’s financial liabilities at 31 December based on contractual undiscounted
payments:
2011
Less than one
year
More than one
year
No term
USD
USD
USD
Insurance contract liabilities
231,402,281
77,134,094
Other liabilities
Reinsurance payable
Unearned commissions
total liabilities
2010
2,885,594
38,052,375
-
-
6,910,793
2,303,598
279,251,043
79,437,692
Insurance contract liabilities
194,596,835
64,865,612
Other liabilities
Reinsurance payable
Unearned commissions
total liabilities
2,698,012
31,083,276
-
-
5,832,541
1,944,180
234,210,664
66,809,792
-
-
-
-
-
-
-
-
-
-
Total
USD
308,536,375
2,885,594
38,052,375
9,214,391
358,688,735
259,462,447
2,698,012
31,083,276
7,776,721
301,020,456
42 International General Insurance Holdings Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2011
23. rIsK ManaGeMent (continued)
Maturity analysis of assets and liabilities
The table below shows analysis of assets and liabilities analysed according to when they are expected to be recovered or settled:
2011
assets
Premises and equipment
Intangible assets
Investment in associated companies
Investments
Investment property
Deferred policy acquisition costs
Insurance receivables
Trade receivables
Other assets
Reinsurance assets
Cash and bank balances
totaL assets
eQuItY and LIaBILItIes
Equity
Issued share capital
Foreign currency translation reserve
Cumulative changes in fair values of investments
Retained earnings
total equity
Liabilities
Less than one
year
More than one
year
No term
USD
USD
USD
Total
USD
-
-
-
-
3,191,687
210,238
-
-
3,191,687
210,238
-
-
11,702,917
11,702,917
29,163,154
29,163,154
11,398,440
63,003,591
60,050,200
134,452,231
22,088,960
98,986,870
236,294
2,670,664
7,362,986
1,640,726
-
-
72,371,502
21,960,555
152,639,577
5,444,160
-
-
-
-
-
-
29,451,946
100,627,596
236,294
2,670,664
94,332,057
158,083,737
360,392,307
102,813,943
100,916,271
564,122,521
-
-
-
-
-
-
-
-
-
-
143,375,678
143,375,678
(286,652)
(286,652)
5,326,279
5,326,279
57,018,481
57,018,481
205,433,786
205,433,786
Insurance contract liabilities
231,402,281
77,134,094
Other liabilities
Reinsurance payable
Unearned commissions
total liabilities
2,885,594
38,052,375
-
-
6,910,793
2,303,598
279,251,043
79,437,692
-
-
-
-
-
308,536,375
2,885,594
38,052,375
9,214,391
358,688,735
totaL eQuItY and LIaBILItIes
279,251,043
79,437,692
205,433,786
564,122,521
International General Insurance company Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2010
43
23. rIsK ManaGeMent (continued)
2010
assets
Premises and equipment
Intangible assets
Investment in associated companies
Investments
Investment property
Deferred policy acquisition costs
Insurance receivables
Trade receivables
Other assets
Reinsurance assets
Cash and bank balances
totaL assets
eQuItY and LIaBILItIes
Equity
Issued share capital
Foreign currency translation reserve
Cumulative changes in fair values of investments
Retained earnings
total equity
Liabilities
Insurance contract liabilities
Other liabilities
Reinsurance payable
Reinsurance deposits
Unearned commissions
Total liabilities
Less than one
year
More than one
year
No term
USD
USD
USD
Total
USD
-
-
-
3,735,073
298,990
-
-
3,735,073
298,990
-
11,280,888
11,280,888
12,553,656
63,983,684
78,461,113
154,998,453
-
-
28,996,126
28,996,126
19,297,853
84,266,041
1,037,660
5,897,073
6,432,617
1,719,715
-
-
53,436,072
15,715,752
96,245,129
5,444,160
-
-
-
-
-
-
25,730,470
85,985,756
1,037,660
5,897,073
69,151,824
101,689,289
272,733,484
97,329,991
118,738,127
488,801,602
-
-
-
-
-
-
-
-
-
-
143,375,678
143,375,678
(269,090)
(269,090)
6,576,750
6,576,750
38,097,808
38,097,808
187,781,146
187,781,146
194,596,835
64,865,612
2,698,012
31,083,276
-
-
5,832,541
1,944,180
234,210,664
66,809,792
-
-
-
-
-
259,462,447
2,698,012
31,083,276
7,776,721
301,020,456
totaL eQuItY and LIaBILItIes
234,210,664
66,809,792
187,781,146
488,801,602
44 International General Insurance company Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2010
23. rIsK ManaGeMent (continued)
capital management
The Group manages its capital by ‘Enterprise Risk Management’ techniques, using a dynamic financial analysis model. The Asset
Liability match is reviewed and monitored on regular basis to maintain a strong credit rating and healthy capital adequacy ratios to
support its business objectives and maximise shareholders’ value.
Adjustments to capital levels are made in light of changes in market conditions and risk characteristics of the Group’s activities.
Fair value
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly
or indirectly; and
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market
data.
Held for trading
Available-for-sale
Held for trading
Available-for-sale
31 december 2011
Level 1
USD
1,525,702
120,949,270
122,474,972
Level 2
USD
-
7,287,118
7,287,118
Total
USD
1,525,702
128,236,388
129,762,090
31 december 2010
Level 1
USD
1,679,234
138,831,026
140,510,260
Level 2
USD
-
9,798,052
9,798,052
Total
USD
1,679,234
148,629,078
150,308,312
Included in available for sale investments is an amount of USD 7,287,118 which is carried at fair value based on recent share issuance
price. (31 December 2010: USD 8,387,118 was carried at fair value which approximated its cost).
There were no transfers between Level 1, 2 and 3 during the year or in either the years ended 31 December 2011 or 31 December
2010.
There are no level 3 investments.
International General Insurance company Limited | fInancIaL stateMents
notes to tHe consoLIdated fInancIaL stateMents
AT 31 DeceMBer 2010
45
24. comparative figures
Some of 2010 balances were reclassified to correspond with 31 December 2011. Classifications have no effect on net profit and
equity.
Other assets
Reinsurance assets
total
Reported in
previous year
Reclassified in
current year
USD
USD
12,185,890
62,863,007
75,048,897
5,897,073
69,151,824
75,048,897
Above reclassification has resulted from Deferred XOL premium reclassified from other assets (Note 11) to Reinsurance assets (Note13)
in the current year. Foregoing reclassification has no effect on net profit or equity.
25. subsequent events
There have been no material events between 31 December 2011 and the date of this report which are required to be disclosed.
46
Bermuda
Amman
Kuala Lumpur
Dubai
London
47
iGi offices
WorldWide
International General Insurance Holdings Limited | IGI offIces
48
International General Insurance Holdings
Limited
International General Insurance company
(dubai) Limited
Address:
P.O. Box 506646, Dubai,
United Arab Emirates
Dubai International Financial Centre,
Unit 1, Level 1, Gate Village 1,
Dubai, UAE
Telephone: +971 4 363 3520
Facsimile: +971 4 425 5675
Address:
P.O. Box 506646
Dubai, United Arab Emirates
Dubai International Financial Centre,
Unit 1, Level 1, Gate Village 1,
Dubai, UAE
Telephone: +971 4 363 3520
+971 4 425 5675
Facsimile:
IGI underwriting company Limited
Regulated by the Dubai Financial Services
Authority
Address:
74 Abdel Hamid Sharaf St.
P.O. Box 941428
Amman 11194
Jordan
Telephone: +962 6 562 2009
Facsimile: +962 6 566 2085
Regulated by the Jordan Insurance Commission
International General Insurance company
limited-Labuan Branch
Address:
Level 1, LOT 7, Block F,
Saguking Commercial Building
Jalan Patau - Patau,
87000 Labuan,
Malaysia
Telephone: +6 (087) 410 745
+6 (087) 419 755
Facsimile:
Regulated by the Labuan Financial Services
Authority