Page 8 - AM201028

8 AWEMainta Diaranson, 28 October 2020

Financial Highlights
NAGICO ARUBA N.V.

STATEMENT OF (In Thousands of AWG ) In this endeavor, our e orts are geared towards creating a superior N I F A N A I C A L S T E S S 2019 2018
FINANCIAL POSITION NAGICO Aruba N.V. customer experience that would leave a lasting impression in our clients' A a l i a v n i f e l a s - r o f - e l b a s t e s s a l a i c n - -
minds. To achieve this objective, management continues to invest in its H - o t - d l e m n i f y t i r u t a a s t e s s a l a i c n 2 0 3 , 4 1 0 8 2 , 2 1
A S T E S S 2019 2018 most valuable asset – our people and their collaborative e orts. Fair value through pro t or loss nancial assets 4,422 4,230
Property, plant and equipment 472 1,031
T n i f l a t o a n n I l a i c v t s e m e s t n 1 7 , 8 2 4 1 5 , 6 1 0
Investment properties - - NAGICO realized an increase in the gross written premiums of approxi-
Intangible assets 5 5 mately 3% in 2019, compared to the previous year, with the gross written Loans and receivables, including insurance receivables
Financial assets 18,724 16,510 premiums at year-end being AWG 26,1 million. Given the market • Loans and receivables are financial assets with fixed or determinable
Loans and receivables, including insurance receivables 3,221 2,990 conditions, we are satis ed with this result. The challenging conditions payments that are not quoted in an active market. These investments are
Cash and cash equivalents 3,053 6,819 also bring about new opportunities, for which we are devising new initially recognized at cost, being the fair value of the consideration paid
Other assets 13,755 13,478 strategies to capitalize on in the near future. for the acquisition of the investment. All transaction costs directly attribut-
TOTAL ASSETS 39,230 40,833 able to the acquisition are also included in the cost of the investment. After
During the nancial year, the overall group reinsurance premiums initial measurement, loans and receivables are measured at amortized
EQUITY AND LIABILITIES increased, resulting in a 13% increase in the Aruba P&C operations' cost, using the E ective Interest Rate (EIR), less impairment. Amortized cost
Stockholders’ equity reinsurance expenses. This item, in turn, had an unfavorable impact on the is calculated by taking into account any discount or premium on
Share capital 1,800 1,800 net results. Despite the back to back years of continued pre-tax pro t acquisition and fee or costs that are an integral part of the EIR. The EIR
Share premium - - increases observed, management still sees many areas for realizing further amortization is included in investment income in the consolidated
Other reserves - - improvements. statement of pro t or loss. Gains and losses are recognized in the
Retained earnings 11,253 8,053 consolidated statement of pro t or loss when the investments are derecog-
Total equity 13,053 9,853 The 2020 outlook is uncertain given the global pandemic that continues to nized or impaired, as well as through the amortization process.
Liabilities disrupt communities around the world. Management remains con dent in • Insurance receivables are carried at their original invoice amounts less a
Insurance liabilities 22,791 24,800 the robust fundamentals of the Aruba P&C operations and is ready to provision for doubtful debts. The provision is determined in line with the
Financial liabilities 720 492 adapt its strategy where needed. It is challenging to provide credible guidelines established by the Central Bank of Aruba.
Other liabilities 2,666 5,688 predictions on the developments for the year.
Total Liabilities 26,177 30,980 LOANS AND RECEIVABLES, INCLUDING
TOTAL EQUITY AND LIABILITIES 39,230 40,833 However, management is operating at heightened alertness and INSURANCE RECEIVABLES 2019 2018
continues to monitor the environment to anticipate any favorable or Insurance receivables 3,497 3,100
STATEMENT OF (In Thousands of AWG ) adverse trends that can fundamentally impact the business. Policy loans - -
COMPREHENSIVE INCOME NAGICO Aruba N.V. Loans receivable - -
Management is cognizant of the challenging environment in which it
2019 2018 Total loans and receivables 3,497 3,100
Insurance activities operates and the competitive landscapes that characterize most of our Less: allowances for doubtful accounts 276 110
a r u s n I e r p e c n m u i o c n i m m e 3 9 5 , 4 2 0 7 9 , 2 2 markets. We remain cautiously optimistic that the organization is able to NET LOANS AND RECEIVABLES 3,221 2,990
a r u s n I e r p e c n m u i m s r e r u s n i e r o t d e d e c s 3 0 0 , 4 1 - 8 1 7 , 2 1 - successfully navigate through these turbulent and unprecedented times
a r u s n i e R o c e c n m m o i s s i o c n i n m e 6 6 9 , 4 9 4 7 , 4 with the solid foundations in place together with the strength of the Other Assets
N U t e n d r e w n i t i r e r g v e n u e 1 5 , 5 5 6 1 0 , 5 0 1 NAGICO brand, the backing of the Peak Re Group, and our team of dedicat- • Reinsurance assets represent balances due from reinsurance companies.
ed professionals.
N a r u s n i t e i a l c e c n m a s n s t i f e n e b d 9 2 9 , 4 2 5 9 , 4 Amounts recoverable from reinsurers are estimated in a manner
a e e F n o c d m m o i s s i s e s n e p x e s n 7 5 7 , 2 7 8 8 , 2 We look forward to building on the 2019 accomplishments and setting our consistent with the outstanding claims provision on settled claims
U n d r e w n i t i r e g x p e n s e s 6 , 7 8 6 8 , 7 3 9 sights higher in 2020 and beyond. associated with the reinsurer’s policies and are in accordance with the
N s e r t e o r f t l u m n i s a r u n s e i t i v i t c a e c 8 , 7 7 0 1 , 7 6 2 related reinsurance contract.
N o c n i t e m o r f e n i t s e v n i m s e i t i v i t c a g 9 7 7 9 4 1 Detlef J.G. Hooyboer • Deferred tax assets are recognized for unused tax losses, unused tax
o c n i r e h t O m e 6 3 2 , 1 5 8 7 Managing Director credits and deductible temporary di erences to the extent that it is
N n i t e c o m o r f e m n i v n i t s e s e i t i v i t c a g 0 , 2 1 5 9 3 4 probable that future taxable pro ts will be available against which they
N n i t e c o m o r f e m s e i t i v i t c a l l a 8 , 9 8 5 0 , 8 9 6 can be used. Deferred tax assets are reviewed at each reporting date and
o r e h t O n i t a r e p s e s n e p x e g 8 0 6 , 5 8 2 1 , 5 are reduced to the extent that it is no longer probable that the related tax
(Loss)/Profit for the year (before taxation) 4,277 2,968 bene t will be realized; such reductions are reversed when the probability
o i t a x a T n 6 7 0 , 1 - 9 3 7 - of future taxable pro ts improves.
L ( o h t r o f t i f o r P / ) s s y e e n , r a a t f o t e x 2 , 3 0 1 2 , 2 2 9 • Those direct and indirect costs incurred during the financial year arising
from the writing or renewal of insurance contracts are deferred to the
Other comprehensive income NOTES TO THE FINANCIAL HIGHLIGHTS extent that these costs are recoverable out of future premiums.
u l a v e R o i t a a l f o n n a d n b d n i d l i u s g - 3 5 1 - • Other assets are stated at cost unless otherwise stated.
T h t o l a t o c r e o m e r p h e n v i s n i e c o m e - 1 - 5 3 Statement of Compliance O T H A R E S T E S S 2019 2018
The nancial highlights have been prepared pursuant to article 3b of
Total Comprehensive income (loss) for the year 3,201 2,076
Directive II.4 on the publication of the Audited Annual Financial Reinsurance assets 9,336 10,505
Statement, issued by the Central Bank of Aruba (“CBA”. The nancial
INDEPENDENT AUDITORS’ REPORT highlights have been derived from the general insurance audited nancial Due from a liated companies 1,095 1,174
Opinion statements of NAGICO Aruba N.V. which have been prepared in Right-of-use assets 923 -
The accompanying nancial highlights of NAGICO Aruba N.V., which comprise accordance with International Financial Reporting Standards (IFRS) as Deferred tax asset 275 52
the statement of nancial position as at December 31, 2019, the statement of issued by the International Accounting Standards Board (IASB), under the Deferred acquisition cost 1,255 1,266
comprehensive income for the year then ended, and related notes, are derived historical cost convention unless otherwise stated.
from the audited nancial statements of Nagico Aruba N.V. respectively (“the Prepayments and other current assets 871 481
audited nancial statements”), for the year ended December 31, 2019. Basis of Preparation T O T A O L T H E A R S S E T S 1 7 , 3 5 5 1 4 , 3 7 8
Items included in the nancial statements of the companies are stated in
In our opinion, the accompanying nancial highlights are consistent, in all Aruban Guilders (AWG). The functional currency of NAGICO Aruba N.V. is Insurance Liabilities
material respects, with the audited nancial statements, in accordance with the U.S. dollars (USD). • General Insurance: The estimated amounts to settle casualty and health
Supervisory Directive II.4 “Directive on the publication of the Audited Annual claims at year-end are provided for. These amounts are increased by a
Financial Statement” as issued by the Central Bank of Aruba (“CBA”).
Basis of Estimates provision for incurred but not yet reported (IBNR) claims. The related
The preparation of the nancial statements requires the entities to make portions recoverable from reinsurers are recorded as claims receivable.
Financial Highlights IBNR is evaluated against actual settlements paid in the subsequent year.
The nancial highlights do not contain all the disclosures required by estimates and assumptions that a ect items reported in the Statement of
International Financial Reporting Standards. Reading the nancial highlights, Financial Position and Statement of Income. Notably the insurance And may be adjusted upwards or downwards. Provision for unearned
therefore, is not a substitute for reading the audited nancial statements of the liabilities are prone to estimates and assumptions. Although these premiums are those proportions of premiums written in a year that relate
companies from which they have been derived. estimates and assumptions are based on management’s best knowledge to years of risk after the reporting date. Unearned premiums are calculated
of current facts, circumstances and, to some extent, future events and on a daily pro rata basis. The proportion attributable to subsequent years is
The audited financial statements and our reports thereon actions, actual results ultimately may di er, possibly signi cantly from deferred as a provision for unearned premiums.
We expressed an unmodi ed audited opinion on the audited nancial those estimates.
statements of NAGICO Aruba N.V. in our report dated October 7, 2020. These N I S U R A N C A I L E S E I T I L I B 2019 2018
nancial highlights do not re ect the e ects of events that occurred subsequent Financial Assets Provision for unearned premium 12,873 11,317
to the date of our reports on the audited nancial statements. • Available-for-sale (AFS) financial assets include equity and debt Outstanding claims provision 2,484 5,175
securities. Equity investments classi ed as AFS are those, which are not IBNR 1,775 1,397
Management’s responsibility for the financial highlights designated at fair value through pro t or loss. Debt securities in this Policy liabilities - -
Management is responsible for the preparation of the nancial highlights category are those that are intended to be held for an inde nite period and Due to reinsurers 5,659 6,911
derived from the audited nancial statements in accordance with the which may be sold in response to needs for liquidity or in response to TOTAL INSURANCE LIABILITIES 22,791 24,800
Supervisory Directive II.4 “Directive on the publication of the Audited Annual changes in the market conditions. After initial measurement, available-for
Financial Statement” as issued by the CBA.
sale nancial assets are subsequently measured at fair value with Technical Information on Risk Coverage and Reinsurance
unrealized gains or losses recognized as other comprehensive income in The entity’s risk exposure is managed through geographic and product
Auditors’ responsibility
Our responsibility is to express an opinion on whether the nancial highlights the fair value reserve until the asset is derecognized, at which time, the diversi cation and through the purchase of reinsurance externally. Claims
are consistent, in all material respects, with the audited nancial statements cumulative gain or loss is recognized in other operating income, or are payable on a claims-occurrence basis. The entity is liable for all insured
based on our procedures, which were conducted in accordance with determined to be impaired, or the cumulative loss is recognized in the events that occur during the term of the contract, even if the loss is
International Standards on Auditing (ISA) 810 (Revised), Engagements to Report consolidated statement of pro t or loss in nance costs and removed from discovered after the end of the contract term. As a result, claims may be
on Summary Financial Statements. the fair value reserve. settled over a long period of time.
• Financial assets with fixed or determinable payments and fixed maturities
Deloitte Dutch Caribbean are classi ed as held-to-maturity when the entity has the positive intention The entity’s reinsurance program includes catastrophe, excess of loss and
drs. A.J. Kernkamp RA and ability to hold until maturity. These investments are initially quota-share treaties, all purchased from leading reinsurers. The level of
October 21, 2020 recognized at cost, being the fair value of the consideration paid for the coverage bought annually is in relation to the level of risks being carried by
Ref.: 21893/BK/om acquisition of the investment. All transaction costs directly attributable to the entity, loss experiences and catastrophe models developed by
the acquisition are also included in the cost of the investment. After initial reinsurers.
MANAGEMENT REPORT measurement, held to maturity nancial assets are measured at amortized
cost, using the e ective interest rate method, less impairment. Gains and Contingent Liabilities
NAGICO Aruba N.V. losses are recognized in the consolidated statement of pro t or loss when There are no contingent liabilities other than those that have been
The year 2019 was characterized by further deteriorating market the investments are derecognized or impaired, as well as through the disclosed in the 2019 audited nancial statements of NAGICO Aruba N.V.
conditions, with premium rates continuing to be under pressure and the amortization process.
market exhibiting stagnant growth. Notwithstanding, progress was made • Financial assets at fair value through profit or loss include financial assets Capital and/or Surplus Commitments
in various areas of the business. Overall, the Aruba operations continue to held for trading and those designated upon initial recognition at fair value There are no surplus or capital commitments
perform in line with our expectations, and we look forward to further through pro t or loss. These investments are initially recorded at fair value.
building on the gained momentum next year. We continue to explore new Subsequent to initial recognition, these investments are remeasured at fair
ways to further excel in our customer-service focus and creating a value. Fair value adjustments and realized gains and losses are recognized Fast, Fair & Always There
best-in-class customer experience. in the statement of pro t or loss.