Risk

The current and potential risks facing the Company

The diversity of Tawuniya’s business model requires a holistic approach to risk management by the Company, to identify, assess, measure, aggregate, and manage risks effectively.

In terms of SAMA guidelines, the insurance industry is required to implement a risk appetite framework based on the guidelines issued by Financial Stability Board (FSB). Tawuniya has also implemented a robust Risk Appetite Framework (RAF) covering all business activities through carefully designed Key Risk Indicators (KRIs). Under the framework, risk appetite statements and threshold limits are carefully designed and implemented every year, keeping in view the annual business plan and objectives of Tawuniya’s Strategy 2025, industry and peer analysis, along with future outlook and challenges, both foreseen and unforeseen.

At a macro level, the Company considers the following as material risks to the business.

1. Insurance Risk: The risk under an insurance contract is the risk that an insured event will occur including the uncertainty of the amount and timing of any resulting claim.
2. Reinsurance Risk: In order to minimize financial exposure arising from large claims, the Company, in the ordinary course of business, enters into agreements with other parties for reinsurance purposes. To minimize its exposure to significant losses from reinsurer insolvencies, the Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from similar geographic regions, activities or economic characteristics of the reinsurers.
3. Financial Market Risk: Market risk is the risk that the value of the financial instrument may fluctuate due to changes in interest rates or the market price of securities or the instrument, change in market sentiments, speculative activities, supply and demand for securities, and liquidity in the market.
4. 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.
5. Liquidity Risk: Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet obligations and commitments associated with financial liabilities.
6. Operational Risk: Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the processes, people and technology and infrastructure resulting either from an internal or external event.
7. Cyber Security Risk: Amid ever-increasing frequency of Cyber-attacks in the region, cyber security is considered as one of the key risks faced by the financial sector.
8. Strategy Execution Risk: As Tawuniya is embarking on a 5-year strategy with many initiatives, programs and projects, failure of timely and effective execution of the strategy is considered a risk.
9. Competition in the Market Resulting in Price Fluctuations: Pricing is one of the vital factors for capturing the market along with customer centric services, and so retaining existing clients. The products need to be competitively priced, effectively managed and closely monitored to contain the loss ratios.
10. Maintaining Solvency and Capital Requirements: Failure to meet these requirements may attract regulatory sanctions and result in rating downgrades, tarnishing the brand image of the Company.
11. Decline in the Local Economic Environment: Leading to delays in collection of premiums receivable.
12. Global Economic Conditions: Affecting Company’s Investment portfolio and thereby impacting financial health.
13. Power of Suppliers: Insurance companies may be affected if the medical providers’ network is dominated by few services providers.
14. Company’s Business Portfolio Skewed towards Health & Life Business Vertical: Though it is in line with the industry, considering the lion’s share of Health & Insurance portfolio, a small change in the portfolio may have impact on the Company’s performance.
15. Flexibility in Company’s Processes and Systems: The infrastructure and the processes adopted need to cope with the demands of the business growth and changing market practices. Failure in this aspect will see the Company lagging behind its competitors.
16. Risk Accumulation: The accumulation of risks at a location or region will expose the Company to a high magnitude of claim payments resulting in losses, should insured events take place on those locations. Therefore, the Company monitors coverage concentration risks primarily by class of insurance.
17. High Staff Turnover: Besides increasing the cost of recruitment and training, it will adversely affect the operational efficiency and in turn the customer service.
18. Leakage of Sensitive Information: Leakage of business sensitive information may position the Company to reputational loss.
19. Frauds and Financial Crimes: Frauds/Abuse in financial operations claims operations; sales etc. may strain the Company’s balance sheet.
20. Breaching of Regulations of CMA, SAMSA, CCHI, etc.: Breaching the regulations may attract imposition of penalties that may in turn affect reputation of the Company.
21. Technology Obsolescence: Tawuniya is pursuing strategies that include IT legacy systems transformation and digitalization. Until the newly implemented systems are available, Company may be exposed to technology obsolescence risk.
22. Business Continuity: Business may be disrupted due to factors beyond the control of the Company and affect the smooth flow of the business activities.
23. Collapse of Financial Markets Impacting Investment Portfolio: Global and domestic inflation, geo-political crises, natural disasters and their ripple effects may give rise to stagflation which may negatively affect financial markets and Tawuniya’s investment portfolio.
24. Sustaining Customer Loyalty and Retention: Latent or emergency customer preferences, and evolving customer demographics may have an adverse cascading impact on Tawuniya’s existing customer base.

The Company considers the following to be the potential risks that could adversely impact its business

• IFRS 17/9 Implementation: Tawuniya will need to interpret, understand and apply the new standard to its insurance contracts and reporting. This is a major change that will extend beyond finance and actuarial teams and its impacts will need to be communicated to a broad range of internal and external stakeholders.
• Services Outage due to Potential Attacks: The availability of systems and services may be at risk due cyber-attacks, virus and malware attacks.
• Maintaining the Operating Standards in Light of Business Expansion: When the business expands, it is a challenge to maintain the operating standards to differentiate in the market and to retain the clientele.
• Geopolitical Situations Impacting the Company’s Insurance Contracts and Investments: Uncertain geopolitical situations may affect the insurance contracts more particularly of P&C lines, reinsurance arrangements and also the investments.
• Changing Regulatory, Legal, and Behavioral Environment Affecting the Company Performance: This will require non-budgeted funding to implement the required changes internally.
• Natural Disaster and Extreme Weather: Natural disasters which are beyond human control may cause damage to properties and vehicles which eventually would have impact on the Company’s performance as it meets its claim commitments.

The Company policy in managing and controlling risks

Tawuniya proactively and speedily engaged in laying out robust control measures to mitigate the potential risks. Formulating a viable and sustainable governance policy and a strong organizational structure, the Company established its Governance, Risk and Control (GRC) Division, reporting to Executive Committee Members through the Division’s own Chief Governance, Risk and Control Officer. Adding bench strength, an Anti-Fraud Manager and a Business Continuity Management Director were also appointed, as the Company’s Business Continuity Management system was revamped to be in tandem with SAMA regulations. System readiness was assured by carrying out several intermittent tests.

Employees were introduced and familiarized with the newly implemented GRC System through training, to effectively use the portal for risk logging and eliciting data reports for analysis and entity risk status. Further training was provided to the Risk Management team to upskill their knowledge and competencies in recognizing and managing risk.

The Company continued to monitor its regulatory solvency position and capital position as per rating agency capital model, and continued updating risk profiles of critical entities as part of Risk and Control Self-Assessment, monitoring the adequacy of technical reserves and assessing its underwriting practices. Policies and procedures were periodically updated to be in line with the regulatory, legal and compliance landscape.

Key risk management activities carried out in 2022

Tawuniya’s Risk Management Division (RMD) carried out a number of risk control activities during the reporting period:

• Regular reporting to Risk Management Committee on the status of various risks the Company was exposed to, based on the approved Risk Appetite Statements and other risk management tools including Risk and Control Self-Assessment and the Risk Register
• Periodical reviews and assessments carried out to stress test the resilience of Regulatory Solvency and Capital Adequacy Ratios of the Company.
• Quarterly reviews and assessments of various Investments risks along with risk management observations and recommendations were submitted to the Investment Committee.
• Product Committee meetings were held periodically to assess and review the risk exposure of Tawuniya’s existing product portfolio on a regular basis, while assessing the risk of new product offerings.
• Automating, updating, and enhancing the current Risk and Control Self-Assessment process, including full revision of six business entities profiles.
• Master risk register was updated regularly with the feedback received from various business units including agreed action plans to mitigate the identified risks.
• Statutory reporting to SAMA and SAMA’s Risk Based Supervision (RBS) activity were carried out on a timely basis.
• Established the Business Continuity Committee to oversee and monitor the state of Business Continuity Management (BCM) activities and operations at Tawuniya.
• Business continuity readiness was tested via several BCM maturity testing throughout 2022, while staff awareness sessions on BCM were conducted to infuse its significance.
• Establishing the Anti-Fraud Review Unit (AFU) in risk management to further enhance the ongoing anti-fraud activities and processes within Tawuniya.
• Potential operational risk incidents were logged manually or on the reporting tool on Tawuniya portal with corrective action, where possible, to alleviate repetition of the breach.
• Prepared and reviewed risk assessment reports for outsourced agreements (material impact) with third parties, as required, to obtain SAMA’s “no objection” status.
• Conducted Risk awareness sessions for Tawuniya employees to inculcate a risk identification culture, and create awareness on the methodology of identifying and mitigating risks in their respective areas.

Penalties and punishments imposed on the Company

For the year of 2022

Sanction/penalty precautionary procedure/preventive measure	Reasons for violation	No. of Executive decisions	Imposing authority	Total amount of fines (In SAR)	Measures undertaken to remedy and avoid such non-compliance in the future
Penalty	The issue contained in the self-assessment submitted to SAMA, which revealed gaps due to absence of Cyber Security Function Head and relevant resources. The situation arose due to a high level of cyber security staff turnover at the Company.	1	SAMA	500,000	The Company has developed a corrective plan to address and implement all requirements and to ensure avoiding recurrence.
Penalty	Delay in uploading the customers to CHI following payment of Premium	1	CHI	17,500	The Company has developed a corrective plan to address and implement all requirements and to ensure avoiding recurrence.
Penalty	Delay in settlement of Medical Services Providers Claim	1	CHI	63,700	The Company has developed a corrective plan to address and implement all requirements and to ensure avoiding recurrence.

For the year of 2021

Sanction/penalty precautionary procedure/preventive measure	Reasons for violation	No. of Executive decisions	Imposing authority	Total amount of fines (In SAR)	Measures undertaken to remedy and avoid such non-compliance in the future
Penalty	Violating SAMA’s supervisory instructions	(3) Decisions that included a fine (2) Decisions were just to draw attention	SAMA	185,000	The company has developed a corrective plan to address and implement all requirements and to ensure avoiding recurrence.
Penalty	Violating instructions of CHI	(1) Warning the Company about complying with the instructions of the Health Insurance Council, using the Nphies platform in insurance transactions	CHI	0	The company has developed a corrective plan to address and implement all requirements and to ensure avoiding its occurrence in the future.

Summary of the Company’s assets, liabilities and business results of the last five fiscal years

a. Comparison of business results in a table:

Description	2022 (SAR ’000)	2021 (SAR ’000)	2020 (SAR ’000)	2019 (SAR ’000)	2018 (SAR ’000)
Gross Written Premiums (GWP)	14,349,620	10,218,606	9,061,768	8,375,860	7,641,245
Net Earned Premiums (NEP)	10,561,448	7,929,662	7,042,385	6,877,318	7,065,754
Net incurred claims	8,455,329	6,660,276	5,487,973	5,812,986	6,571,667
Net profit (loss) before Zakat	480,389	350,138	514,459	402,165	(213,339)
Total comprehensive income	326,078	329,702	309,673	691,468	(318,160)
Total equity	3,365,142	3,039,064	2,809,362	2,499,689	1,808,221
Profit per share (SAR)	3.13	2.13	3.15	2.62	(2.23)

b. Comparison of the Company’s assets and liabilities in a table

Description	2022 (SAR ’000)	2021 (SAR ’000)	2020 (SAR ’000)	2019 (SAR ’000)	2018 (SAR ’000)
ASSETS
Statutory deposit	125,000	125,000	125,000	125,000	125,000
Accrued income on statutory deposit	5,420	3,050	2,774	2,513	2,254
Property, equipment and right-of-use assets, net	255,565	236,970	191,851	206,553	211,378
Intangible assets	13,441	16,627	7,708	3,971	3,633
Investment properties	59,562	60,850	62,138	63,427	64,716
Investments in equity accounted investments	95,948	89,556	85,319	101,520	95,116
Prepaid expenses and other assets	767,968	668,962	616,895	243,912	261,088
Mudaraba/murabaha deposits	5,903,752	3,780,598	3,134,932	3,539,376	2,239,125
Deferred excess of loss premiums	7,088	7,501	12,723	7,714	8,775
Deferred policy acquisition costs	187,314	127,951	134,724	120,845	130,651
Reinsurers’ share of gross outstanding claims	1,782,371	1,762,324	1,962,570	3,100,446	2,725,809
Reinsurers’ share of incurred but not reported claims	392,894	329,243	289,784	327,724	191,837
Reinsurers’ share of gross unearned premiums	1,097,750	717,382	683,698	715,959	544,839
Available for sale investments	1,058,341	2,370,943	3,018,566	2,746,748	2,905,130
Receivables, net	5,421,514	3,222,001	3,480,553	1,495,894	1,517,987
Accrued investment income	81,726	11,029	2,397	6,333	–
Cash and cash equivalents	1,659,343	1,188,266	445,794	1,306,550	1,600,240
TOTAL ASSETS	18,914,997	14,718,253	14,257,426	14,114,485	12,627,578
LIABILITIES
Return payable on statutory deposit	5,420	3,050	2,774	2,513	2,254
Defined benefits obligation	125,297	142,110	134,990	129,480	133,276
Zakat payable	272,168	415,023	346,224	255,554	237,080
Reserve for takaful activities	2,861	3,372	3,544	5,006	8,690
Incurred but not reported claims reserve	2,400,908	1,770,241	1,549,350	1,925,584	1,684,183
Gross outstanding claims	2,826,056	2,400,729	2,516,652	3,684,891	3,271,156
Premium deficiency reserve	13,591	30,277	52,401	2,830	7,272
Unearned commission income	61,183	42,289	37,538	43,323	39,299
Surplus distribution payable	265,167	258,163	252,086	207,586	–
Gross unearned premiums	7,014,914	5,031,265	4,319,378	3,826,119	3,820,293
Claims payable, accrued expenses and other liabilities	1,591,463	1,070,631	1,570,159	1,001,679	1,514,723
Short-term borrowings	–	–	401,998	–
Reinsurers’ balances payable	962,225	503,409	254,559	523,820	94,720
Dividends payable	8,602	8,630	6,411	6,411	6,411
TOTAL LIABILITIES	15,549,855	11,679,189	11,448,064	11,614,796	10,819,357
EQUITY
Share capital	1,250,000	1,250,000	1,250,000	1,250,000	1,250,000
Legal reserve	1,250,000	1,197,495	1,144,183	1,065,517	1,000,000
Fair value reserve for investments	75,166	152,513	89,536	167,472	(198,724)
Remeasurements of defined benefit obligation	(7,674)	(20,096)	(20,261)	(14,540)	(12,226)
Retained earnings	797,650	459,152	345,904	31,240	(230,829)
TOTAL EQUITY	3,365,142	3,039,064	2,809,362	2,499,689	1,808,221
TOTAL LIABILITIES AND EQUITY	18,914,997	14,718,253	14,257,426	14,114,485	12,627,578

Geographical analysis of revenues of the Company and its affiliates

Year	Geographic analysis of Company's total revenues Revenues (Gross written premiums)
	Central Region and Head Office (SAR ’000)	Western Region (SAR ’000)	Eastern Region (SAR ’000)	Other Regions (SAR ’000)	Total (SAR ’000)
2022	9,631,406	2,822,619	1,872,409	23,186	14,349,620

	Geographic analysis of affiliates’ total revenues
	Central Region and Head Office (SAR ’000)	Western Region (SAR ’000)	Eastern Region (SAR ’000)	Other Regions (SAR ’000)	Total (SAR ’000)
Waseel	45,662	–	–	–	45,662
United Insurance Co.	–	–	–	90,097	90,097

Material differences in the operational results compared to the previous year’s results or expectations announced by the Company [LCG – 20]

Description	2022 (SAR ’000)	2021 (SAR ’000)	Changes (+)(-)	Change Rat %
Gross written premiums	14,349,620	10,218,606	4,131,014	40.43
Net written premiums	12,164,729	8,607,865	3,556,864	41.32
Net incurred claims	8,455,329	6,660,276	1,795,053	26.95
Net profit of policyholders’ investment	208,655	145,751	63,920	43.16
Profit insurance operations minus policyholders’ investments from operations	225,979	77,552	146,365	191.39
Net profit/(loss) of shareholders capital investment	95,826	157,036	(60,790)	-38.98
Net profit before Zakat	480,389	350,138	129,729	37.20
Total comprehensive income	326,078	329,702	(47,860)	-1.10
Total shareholder equity (after deducting minority equity)	3,350,970	2,952,931	374,727	13.48
Profit/(loss) per share	3.12	2.13		–

Approved accounting standards

The Consolidated Financial Statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRSs) as endorsed in the Kingdom of Saudi Arabia, and other standards and pronouncement issued by Saudi Organization for Chartered and Professional Accountants (“SOCPA”) (referred to as “IFRS as endorsed in KSA”), and in accordance with the Companies Law in the Kingdom of Saudi Arabia and the Company’s Articles of Association.

Details of shares and debt instruments issued for each subsidiary

There are no shares or debt instruments issued to the subsidiaries.

A description of the Company’s policy for distributing dividends

The proposed distribution is recommended to the General Assembly by the BoD based on several factors. Among others, these include maintaining an average of not less than 110% of the solvency required by insurance law, a credit rating of not less than A, and an acceptable level of liquidity to meet operational and expansion costs.

The profit distribution mechanism is determined by Articles (45) and (46) of the Article of Associations of the Company, regulations issued by SAMA, and in accordance with the rules applicable to distribution, whereby 10% of the net surplus is shared with the policyholders, either by direct distribution or by reducing their premia for the following year. A 90% of the surplus is transferred to the shareholder accounts.

Shareholders’ profits consist of the return on investment of shareholders’ funds in compliance with the rules set by the BoD and the aforementioned 90% of the net surplus, having set aside the required Zakat and the mandatory 20% as statutory reserves. The Ordinary General Assembly is empowered to veto the statutory reserve component, should the reserve reach a 100% of the paid-up capital.

When determining the stockholders share in the net profits, the Ordinary General Assembly may decide to create other reserves, weighing in the interests of the company or guarantees the distribution of fixed profits to the shareholders.

After deducting all general expenses and other costs, and leaving a buffer for any losses and contingent liabilities that the BoD may deem necessary, the net annual profits of the Company shall be distributed as per the Law on the Supervision of Cooperative Insurance Companies and the provisions issued by SAMA.

A percentage not less than 5% of the paid-up capital shall be allocated from the remainder of the profits for distribution to the shareholders as proposed by the BoD and decided by the General Assembly. If the remainder of the profits is not sufficient to meet the required percentage payment to the shareholders, the General Assembly may not decide to distribute a percentage of profits in excess of that which was proposed by the BoD. If this occurs, the shareholders will have no right to demand that such excess payment be made in the ensuing years.

The shareholder is entitled to his share of the profits as decided by the General Assembly. The decision also specifies the due date and the distribution date. Eligibility for payment of dividends shall be the requirement for the shareholders to be registered in the shareholders’ records by the end of the day specified for maturity. The CMA will be informed without delay of decisions to recommend or distribute profits.

The profits, approved and agreed to be distributed to the shareholders are paid at the place and time determined by the Board of Directors, in compliance with the instructions issued by the competent authority, subject to prior written approval of SAMA.

If the Board of Director recommends a distribution of any profits for the year 2022, it will be announced immediately on the Saudi Stock Exchange (TADAWUL).

A description of any interest in the voting-eligible shares category belonging to persons (other than members of the Company’s Board of Directors, Senior Executives and their relatives) who informed the Company of those rights under Article (45) of the registration and listing rules, and any change in those rights during the fiscal year 2022

N/A

Description of any interest, contractual securities or rights issue of the Board Members, Senior Executives and their relatives on the shares or debt instruments of the Company

Board Members and their relatives

	Names of the Board member	Beginning of the year		End of the year		Net change	Change ratio %
		Number of shares	Debt instruments	Number of shares	Debt instruments
1.	Mr. Abdulaziz I. Alnowaiser	250	0	250	0	0	0
2.	Mr. Ghassan A. Al-Malki	0	0	6,000	0	0	N/A
3.	Mr. Homood A. Altuwaijri	1,600	0	1,600	0	0	0
4.	Dr. Khaled A. AlGhoneim	1,000	0	1,000	0	0	0
5.	Mr. Abdulaziz A. Al-Khamis	1,250	0	1,250	0	0	0
6.	Mr. Waleed A. Aleisa	111	0	111	0	0	0
7.	Mr. Jaser A. Al Jaser	0	0	0	0	0	0
8.	Mr. Ehab Al Dabbagh	0	0	0	0	0	0
9.	Mr. Abdulrahman M. Al Odan	0	0	0	0	0	0

Senior Executives and their relatives

	Names of the persons of interest	Beginning of the year		End of the year		Net change	Change ratio %
		Number of shares	Debt instruments	Number of shares	Debt instruments
1.	Dr. Othman Al-Kassabi	111	0	111	0	0	0
2.	Mr. Abdulaziz H. Al Boug	0	0	0	0	0	0
3.	Mr. Fahad S. Al-Moammar	0	0	0	0	0	0
4.	Mr. Sultan S. Al-Khomashi	0	0	0	0	0	0
5.	Mr. Thamer Saeed Al-Harthy	0	0	0	0	0	0
6.	Mr. Yasir Asaad Allaf	0	0	0	0	0	0
7.	Mr. Marwan Aida Al-Ghamdi	0	0	0	0	0	0
8.	Dr. Ammr Khaled Kurdi	0	0	0	0	0	0
9.	Mr. Mansour Falah Abuthnain	0	0	0	0	0	0
10.	Mr. Abdullah Al Shargi	0	0	0	0	0	0

Description of any interest, contractual securities or rights issue of the Board Members, Senior Executives and their relatives on the shares or debt instruments of the Company’s subsidiary

There are no interest contractual papers and subscription rights belonging to the members of the Company’s Board of Directors and their relatives in the subsidiary company.

Information relating to any loans, repayment of loans, and the total indebtedness of the Company and its affiliates

The Company for Cooperative Insurance declares that there are no loans or indebtedness on the Company or its subsidiaries during the year 2022 (whether due on demand or otherwise).

Convertible debt instruments, contractual securities, options, warrants or similar rights issued or granted by the Company

Tawuniya declares that there are no convertible debt instruments, contractual securities, options, warrants or similar rights issued or granted by the Company during 2022.

Conversion or subscription rights under any convertible debt instruments, contractual securities, options, warrants or similar rights issued or granted by the Company

Tawuniya declares that there are no conversion or subscription rights under any convertible debt instruments, contractual securities, options, warrants or similar rights issued or granted by the Company during 2022.

Redemption, purchase or cancellation by the Company of any redeemable debt instruments and the amount of such securities outstanding

Tawuniya declares that it has not made no redemption, purchase, or cancellation by the Company of any redeemable debt instruments or the amount of such securities outstanding, whether bought by the Company or its subsidiaries during the year 2022.

Number of Requests recorded by the Company in the shareholders register during year 2022, their dates and reasons

Number of the Company's requests of shareholders registry	Request Date	Request Reasons
01	13 November 2022	Others
02	13 November 2022	Others
03	11 October 2022	Others
04	25 September 2022	Others
05	04 July 2022	Corporate action
06	10 June 2022	AGM
07	09 June 2022	AGM
08	09 June 2022	Others
09	10 May 2022	AGM

Description of transactions between the Company and any related party during 2022

Related party	Relation with the Company	Contract type	Contract duration	Contract value (SAR)
GOSI	Joint membership for BoD members: Mr. Jaser A. Al Jaser Mr. Ghassan A. Al-Malki	Insurance Policies	One year	52,922,825
		Other Services	There is no specific period	777,584
United Insurance Company	Joint membership for BoD members: Mr. Waleed A. Aleisa Mr. Abdulaziz A. Al-Khamis Mr. Jaser A. Al Jaser	Fees of Insurance Policies	One year	5,706,467
	Senior Executives: Mr. Abdulaziz H. Al Boug Mr. Sultan S. Al-Khomashi	Claims fee	There is no specific period	2,187,593
Hassana Investment Company (Subsidiary of GOSI)	Joint membership for the BoD members: Mr. Jaser A. Al Jaser Mr. Ghassan A. Al-Malki	Insurance Policies	One year	6,056,728
The Saudi Investment Bank	Joint BoD membership for: Mr. Abdulaziz A. Al-Khamis	Insurance Policies	One year	36,480,300
Saudi Entertainment Ventures Company	Mr. Abdulaziz I. Alnowaiser - Member of the BoD and Chairman of the Audit Committee	Insurance Policies	One year	15,344,662
TAHAKOM Group	Mr. Abdulaziz I. Alnowaiser – Member of the BoD and CEO	Insurance Policies	One year	393,379,484
National Water Company	Mr. Abdulaziz I. Alnowaiser – Member of Audit Committee	Insurance Policies	One year	222,925,815
Mobily	Mr. Homood A. Altuwaijri - Member of the BoD and Audit Committee Dr. Khaled A. AlGhoneim - Member of the BoD Mr. Abdulaziz I. Al-Nowiaser - Chairman of the Audit Committee	Insurance Policies	One year	61,570,655
Abduallah Nasir Al Odan Company	63% owned by Mr. Abdulrahman M. Al Odan	Insurance Policies	One year	-1,358 Decreased endorsement for old policy prior to 2022
Saudi Exchange	Mr. Abdulrahman M. Al Odan - Member of the Audit Committee	Other Services	There is no specific period	1,184,412
		Insurance Policies	One year	10,357,207
Saudi National Bank	Mr. Abdulrahman M. Al Odan - Member of the BoD and Risk Committee	Insurance Policies	One year	2,422,583
ELM Company	Mr. Abdulrahman M. Al Odan - Member of the BoD and Audit Committee Dr. Khaled A. AlGhoneim - Member of the BoD	Insurance Policies	One year	76,939,555
Mudaraba	Mr. Ehab M. Al Dabbagh - Member of the BoD with 15% ownership	Insurance Policies	One year	74,971
Sanad Association	Mr. Homood A. Altuwaijri - Member of the BoD	Insurance Policies	One year	670,244
Banque Saudi Fransi	Mr. Homood A. Altuwaijri - Member of the Audit Committee	Insurance Policies	One year	36,962,924
STC Group	Dr. Ammr K. Kurdi - Member of the Audit Committee	Insurance Policies	One year	820,794,418
Bunyan Company	Mr. Abdulaziz H. Al Boug - Member of the BoD Dr. Ammr Khaled Kurdi - Member of the BoD	Insurance Policies	One year	341,793
Waseel	Mr. Abdulaziz H. Al Boug - Chairman of the BoD Dr. Ammr Khaled Kurdi - Member of the BoD Dr. Othman Al-Kassabi - Member of the BoD	Insurance Policies	One year	1,006,913
		Other Services	There is no specific period.	10,145,866
Najem	Mr. Abdulaziz H. Al Boug - Member of the BoD	Other Services	There is no specific period.	55,990,434
Hawaz Communications and Information Technology Company	Dr. Khaled A. AlGhoneim - Owner and Member of the BoD	Insurance Policies	One year	193,130

Contracts to which the Company is a party, in which a Director of the Company, a Senior Executive or any person related to them is, or was, interested, including names of the person in relation with such business and contract, in addition to the nature, conditions, durations and amount for the business or contract.

Board Member/Executive/ Relative	Name of the Company/Entity	Nature of the transaction	Contract amount at the beginning of the transaction or upon renewal (SAR)	Transactions during the year from 1 January 2022 until 31 December 2022 (SAR)	Claims during the year from 1 January 2022 until 31 December 2022 (SAR)
Mr. Abdulaziz I. Alnowaiser	Saudi Entertainment Ventures Company	Insurance Policies	12,630,672	15,344,662	8,331,688
	TAHAKOM Investment	Insurance Policies	3,455,269	3,684,501	15,251
	TAHAKOM	Insurance Policies	234,855,498	243,506,655	991,937
	Alpha Star Aviation Services	Insurance Policies	34,722,091	35,206,855	66,685
	Infiniti Company	Insurance Policies	837,949	850,518
	Armour Security Industrial Manufactory	Insurance Policies	6,773,661	6,599,368	27,134
	SVTS	Insurance Policies	12,253,435	13,931,847	55,559
	Kafaat Business Solutions	Insurance Policies	60,114,631	75,467,028	558,674
	Sky Prime Private Aviation	Insurance Policies	13,971,838	14,132,712	25,329
	Nwc	Insurance Policies	261,389,185	222,925,815	104,415
	Mobily	Insurance Policies	53,092,204	61,570,655	876,733
Mr. Abdulaziz A. Al-Khamis	The Saudi Investment Bank	Insurance Policies	35,257,858	36,480,300	325,516
	United Insurance Company	Fees of Insurance Policies	There is no fixed amount for the contract, it dependd according to the transactions	5,706,467
		Claims fee	Claims fees	2,187,593
Mr. Homood A. Altuwaijri	Sanad Association	Insurance Policies	653,811	670,244
	Mobily	Insurance Policies	53,092,204	61,570,655	876,733
	Banque Saudi Fransi	Insurance Policies	43,330,174	36,962,924	9,276,823
Mr. Abdulrahman M. Al Odan	Abduallah Nasir Al Odan Company	Insurance Policies	Continuity of the previous contract during 2021	(1,358)
	Saudi Exchange	Other Services	There is no fixed amount of the contract	1,184,412
		Insurance Policies	9,369,712	10,357,207	56,196
	Saudi National Bank (Al-Ahli)	Insurance Policies	There is no fixed amount for the contract, it dependd according to the transactions	2,422,583	4,905,163
	ELM Company	Insurance Policies	73,997,363	76,939,555	1,042,987
Dr. Khaled A. AlGhonaim	Hawas Company for Communication & IT	Insurance Policies	231,581	193,130
	Mobily	Insurance Policies	53,092,204	61,570,655	876,733
	ELM Company	Insurance Policies	73,997,363	76,939,555	1,042,987
Mr. Waleed A. Aleisa	United Insurance Company	Fees of Insurance Policies	There is no fixed amount for the contract, but it is determined according to the transactions	5,706,467
		Claims fee	These are insurance policies and claims fees	2,187,593
Mr. Ehab M. Al Dabbagh	Mudaraba	Insurance Policies	59,690	74,971
Mr. Ghassan A. Al-Malki	GOSI	Insurance Policies	53,627,840	52,922,825	395,617
		Other Services	There is no fixed amount for the contract	777,584
	Hassanah	Insurance Policies	5,966,200	6,056,728	3,855
Mr. Jaser A. Al Jaser	GOSI	Insurance Policies	53,627,840	52,922,825	395,617
		Other Services	There is no fixed amount for the contract	777,584
	United Insurance Company	Fees of Insurance Policies	There is no fixed amount for the contract, it dependd according to the transactions	5,706,467
		Claims fee	Claims fees	2,187,593
	Hassana Investmnet Company	Insurance Policies	5,966,200	6,056,728	3,855
Mr. Abdulaziz H. Al Boug	Waseel	Insurance Policies	771,283	1,006,913	5,361
		Other Services	There is no fixed amount for the contract	10,145,866
	United Insurance Company	Fees of Insurance Policies	There is no fixed amount for the contract, it dependd according to the transactions	5,706,467
		Claims fee	Claims fees	2,187,593
	Bonyan Company	Insurance Policies	146,374	341,793	1,716
	Najem	Other Services	There is no fixed amount for the contract, it dependd according to the transactions	55,990,434
Dr. Ammr K. Kurdi	STC	Insurance Policies	779,351,305	820,794,418
	Bunyan Company	Insurance Policies	146,374	341,793	1,716
	Waseel	Insurance Policies	771,283	1,006,913	5,361
		Other Services	There is no fixed amount for the contract	10,145,866
Mr. Sultan S. Al-Khomashi	United Insurance Company	Insurance Policies	771,283	5,706,467	5,361
		Other Services	There is no fixed amount for the contract, it dependd according to the transactions	2,187,593
Dr. Othman Y. Al-Kassabi	Waseel	Insurance Policies	771,283	1,006,913	5,361
		Other Services	There is no fixed amount for the contract	10,145,866

Information related to any business that competes with the company or any of the branches of the activity it is engaged in and which any member of the Board of Directors is or was engaged in

The Company for Cooperative Insurance declares that there are no competing businesses for the company or for any of the branches of the activity is engaged in and it is practiced or was practiced by any member of the Board of Directors, noting that the United Insurance Company, whose dealings and which some members of the Board of Directors and Executive Management have disclosed, is a Bahraini subsidiary owned by 50% for the Cooperative Insurance Company, according to what was disclosed in page 86.

A description of any arrangement or agreement, under which a member of the Board of Directors or a Senior Executive has waived any remuneration

Tawuniya declares that there are no arrangements or agreements, under which any member of the BoD or a Senior Executive has waived any salary or remuneration.

A description of any arrangement or agreement, under which any shareholder has waived his rights to profits

Tawuniya declares that there is no arrangement or agreement, under which any shareholder has waived his rights to profits.

Statement of statutory payments (paid and outstanding) for the year 2022

Statutory payment	2022		Brief description	Reasons
	Paid (SAR ’000)	Outstanding (SAR ’000)
Zakat	232,241	272,168	Zakat provision	Regulation of the General Authority of Zakat and Tax
Taxes	24,339	3,894	Tax provisions	Regulation of the General Authority of Zakat and Tax
GOSI	41,035	None	Social insurance	General Organization for social insurance
Visas and passport fees	1,582	None	–	–
Labor office fees	1,434	None	–	–
SAMA	64,289	None	–	–
CCHI	75,044	None	–	–

Investments made or any reserves set up for the benefit of the employees of the Company

The Company has a savings plan under which a definite percentage of the employees’ salary is periodically deducted, with Tawuniya investing this amount through one of the investment funds compliant with the rules of Islamic Shariah. The total number of subscribers at the end of 2022 reached 263 employees with a subscription amounting to SAR 18,833,698.

The Company continued its work at home loan program for employees, with 25 employees participating in the program by the end of 2022, and the total subscription amount reaching SAR 23.5 Mn.

Declarations/statement

1. The Company for Cooperative Insurance (Tawuniya) states that the proper books of accounts and principles have been maintained.
2. Tawuniya states that the system of internal control is sound in design and effectively implemented.
3. Tawuniya states that there are no significant doubts concerning the Company’s ability to continue as an ongoing concern.

Reservations on the annual financial statements, if any

None

Disclosure of treasury shares held by the Company and details of their use

Tawuniya declares that there are no treasury shares held by the Company.

Conclusion

In conclusion, the Board of Directors expresses their sincere gratitude and appreciation for the confidence the customers continued to place in Tawuniya through 2022. The Board is immensely thankful to the Company’s stakeholders for their enthusiastic engagement with the activities of the Company and assures them of the diligence and dedication of the Senior Management and the employees of the Company to ensure the distinguished position Tawuniya holds in the insurance sector of the Kingdom will continue to enhance in the following years.