With you for better health Annual Report Over the past three hundred years, and under all circumstances, our country has proven its ability to overcome all challenges with determination and to emerge from them victorious with the grace of God. The Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Contents Our Mission 1 Our Values 2 Chairman's Message 3 CEO's Message 5 Our Board Members 7 Our Chief Executive Team 13 Bupa Group 16 Bupa Arabia 24 Our Brand Perception and Equity 25 Our Competitive Advantage 26 Our People 30 Our Corporate Social Responsibility 33 Our Governance Framework 34 Our Code of Conduct 35 Our Whistleblowing Policy 36 Audit Committee Report 37 Board Report 40 Financial Statement 77 Our Our Mission Values To be the healthcare Extraordinary Courageous • Go above and beyond • Be brave • Be the best we can dream to be • Dare to try leader in Saudi Arabia • Delivering outstanding results • Speak up by taking care of the Caring Accountable lives in our hands. • Big-hearted and compassionate • Always responsible • Treat people with respect and kindness • Take ownership • Everyone and everything matters • Make it happen Authentic Passionate • True to yourself • Full of energy and inspiration • Genuine and honest • Love what we do and why we • Say what you mean, mean what you say do it • Love our customers Open • Seek new ideas and other points of view • Share freely • Really listen and understand • Embrace diversity 1 Bupa Arabia Annual Report 2019 Our Our Mission Values To be the healthcare Extraordinary Courageous • Go above and beyond • Be brave • Be the best we can dream to be • Dare to try leader in Saudi Arabia • Delivering outstanding results • Speak up by taking care of the Caring Accountable lives in our hands. • Big-hearted and compassionate • Always responsible • Treat people with respect and kindness • Take ownership • Everyone and everything matters • Make it happen Authentic Passionate • True to yourself • Full of energy and inspiration • Genuine and honest • Love what we do and why we • Say what you mean, mean what you say do it • Love our customers Open • Seek new ideas and other points of view • Share freely • Really listen and understand • Embrace diversity Bupa Arabia Annual Report 2019 2 This top performance and enhancement Chairman's of our brand and reputation, have earned us strong recognition related to Message 2019: • Most Valuable Insurance Company Insurance Market and Economic in Saudi (Forbes Middle East 2020) Landscape • 7th Strongest Brand in Saudi Arabia (Brand Finance 2020 Ranking) After a challenging 2018, we consider • Best Health Insurance Company 2019 a year of stability for the insurance (International Finance Magazine) sector. The number of insured customers that started to decline in June 2017 and continued to decrease in 2018, started to pick up in January Sustainability and Corporate Social 2019. Responsibility This increase was driven by an initiative We remain committed as a board – and led by the Council of Cooperative as a company – to our strategic and Health Insurance (CCHI) to make governance frameworks to ensure that health insurance mandatory for Saudis we successfully balance our short term working in the private sector and their goals and longer term priorities and dependents starting from 2019 over a we understand that corporate social few years. After an increase of 2.8% in responsibility and sustainability are essential requirements for our success. June 2019, the year closed on a level comparable to 2018 in terms of the During 2019, we continued to further numbers of insured customers. enhance our cyber security measures, business resilience and have embedded Gross Written Premiums (GWP) increased by 21.5% supported by price increases for the new CCHI Table of Benefits in the first half of the year and by pricing up for normal medical inflation in the second half of the year, which we believe enhances the competitive landscape of the sector going forward. Our Performance 2019 was a pivotal year in the history of Bupa Arabia with stellar performance on all fronts further cementing our position as the leading insurer in Saudi Arabia. New all-time records were registered in both GWP (SR10.4B, 21.5% vs. ‘18) and profit (SR713m, +35.6% vs. ‘18). 3 Bupa Arabia Annual Report 2019 stronger risk management practices I would also like to express my deepest across the business with more focus appreciation for the continued support, on the “first line of defence” in our risk commitment and contribution from all management activities. Our business our stakeholders, be they shareholders, continuity plans have served us well as clients, partners, regulators and service COVID-19 emerged at the end of 2019 providers. and we were ready ensuring the safety of our people and the continuity of our By order of the Board business. We also appointed highly Eng. Loay Hisham Nazer qualified individuals in the various Chairman Board and Board Committees with significant expertise in areas of audit, risk, and human resources, signifying our strong commitment to strong governance and oversight. We are also proud of launching additional services to our customers such as telemedicine and home healthcare and educating the business community on the best practices to deal with COVID-19. Our CSR program, providing free health insurance cover, and a variety of health related support activities, for all the orphans under the Ministry of Human Resources and Social Development, remains one of our key programs for our community. On behalf of the Board of Directors, I would like to express my sincere appreciation to all our people, whether employees or Board Committee representatives, for continuing to enable Bupa Arabia to deliver record- breaking and industry-leading results. 2019 was a pivotal year in the history of Bupa Arabia with stellar performance on all fronts further cementing our position as the leading insurer in Saudi Arabia. Bupa Arabia Annual Report 2019 4 • A “Risk Intelligent Organisation” CEO's by maturing our corporate governance and risk management infrastructure and Message capabilities and further raising the bar of Bupa Arabia’s internal control environment. Achievements In 2019, Bupa Arabia has demonstrated Services and Competitive Advantages its best-ever performance and consequently delivered record- breaking results across most of its Key We continue to invest in building our Performance Indicators (KPIs), namely: service differentiation and enhance our competitive advantage as a leading • Gross written premium at and trusted health insurance provider SR 10.4 billion (+21.5% vs ’18) in Saudi Arabia, through our Tebtom healthcare services platform and our • Before zakat and income tax profit Rahatkom hospital delivery program, of SR 713 million (+35.6% vs ’18) with the goal of improving customer experience and supporting them at • Term deposits and investments their greatest time of need. at SR 6.9 billion and improved solvency In 2020, we will significantly enhance the Tebtom and Rahatkom programs • Cash and investments rate with an unmatched digital experience compared to technical reserves with and Out-of-Hospital (OOH) innovation, SR1.5 billion more than technical namely telemedicine and home reserves, medicine, to ensure that our customers and their ensured dependents continue • Investment earnings of to receive the best healthcare services. SR235 million (+27.6% vs ’18) • Record collections performance despite economic conditions and constraints, • Increased market share to reach 27.6% (+3.1 points vs ’18), • Saudization ratio of 77% • We also continued our progress on key organizational initiatives such as: • Launch of the digital sales platform to sell health insurance products to Small and Medium Enterprises, Saudi families, and domestic helpers, • Release of the all-new version mobile application for smart phones, 5 Bupa Arabia Annual Report 2019 People • Accelerate and expand our digital transformation to maximize productivity, We strive to attract and retain talented, • Offer innovative products and skilled, and engaged employees that services to meet customers’ needs. love working at Bupa Arabia because of • 2019 Insured Lives market closed our amazing culture, which we define with a nominal increase (0.8%), and approach along five dimensions: though Expat insured live market continued to decline. • We are leaders in all we do • 2020 Insured Lives market has • We are innovative and caring already seen a decline of 500K+ • We are loved by customers lives as of May end due to Corona. • We have amazing talent We expect the market to continue • We consistently act in-line with our declining impacting Expat exodus values and Saudi unemployment. In 2019, we continued to develop and Since the emergence of COVID-19, we enhance our culture and engagement assembled a working team to develop, activities. We thus introduced a number monitor, and document the actions of employee development initiatives to that ensured our seamless transition attract and retain market-leading talent. to a work-from-home arrangement We also increased our saudization ratio without impacting business. I am to a record level of 77% versus 75% in delighted to report that 98% of our 2018. workforce worked from home for long periods with no business interruption. Outlook Furthermore, we supported the business community by educating them on best practices to manage the 2020, also known as the COVID-19 situation. year, could be one of the toughest years in recent history for the global Additionally, and as the most trusted economy across all geographies and health insurer and the market leader, we industries, possibly leading to a global stepped up to COVID-19 challenges by recession of undetermined magnitude. inaugurating the SR1 billion+ donations However, in the insurance sector, to the health endowment fund created especially car and health insurance, by the Ministry of Health by being there seem to be short-term benefits the first private company to donate resulting from restricted mobility and SR20 million.