1 Acquisition Cost
All expenses which vary with and are primarily related to, the acquisition of new insurance contracts and renewal of existing insurance contracts (e.g. commissions).
2 Actuarial Valuation
A determination by an actuary at a specific date of the value of a life insurance company’s liabilities. The purpose of a valuation is to determine if the Company holds adequate assets to fund the Company’s liabilities.
3 Actuary
An expert concerned with the application of probability and statistical theory to problems of insurance, investment, financial management and demography.
4 Admissible Assets
Assets that are included in determining an insurer’s statutory solvency, specified under the rules made by the IRCSL under the regulation of Insurance Industry Act No. 43 of 2000.
5 Annuity
A series of regular payments. Annuities include annuities certain, where payments are made at definite times and life annuities where payments depend on the survival of an annuitant. A life annuity is a contract that provides a regular payment, typically monthly, during the life time of the policyholder or a fixed period if less. If the payment starts at the outset of the contract, it is an immediate annuity. If it starts at some point in the future, it is a deferred annuity.
6 Beneficiary
The person or financial institution (for e.g. a trust fund) named by the policyholder in the policy as the recipient of the sum assured and other eligible benefits due in the event of the policyholder’s death.
7 Bonus
Bonus is a method of distribution of surplus amongst the participating policyholders of a life insurance company. A bonus is an enhancement to the basic sum assured under a contract and is declared as a percentage of the sum assured.
8 Claims Incurred
The aggregate of all claims paid during the accounting period together with attributable claims handling expenses
9 Claims Payable
The amounts provided to cover the estimated ultimate cost of settling claims arising out of events which have been notified by the reporting date, being the amounts due to beneficiaries together with claims handling expenses, less amounts already paid in respect of those claims.
10 Claims Ceded to Reinsurers
Claims ceded to reinsurers contain the proportion of claims paid, which was recovered from reinsurers.
11 Claims
The amount payable under a contract of life insurance arising from the occurrence of an insured event such as death, disability, injury, hospital or medical claims etc.
12 Commission
Remuneration to an intermediary for services such as selling and servicing an insurer’s products. This is one component of acquisition cost.
13 Corporate Governance
The process by which corporate entities are governed. It is concerned with the way in which power is exercised over the management and direction of entity, the supervision of executive actions and accountability to owners and others.
14 Credit Life Insurance
Term life insurance issued through a lender or lending agency to cover payment of a loan, installment purchase or other obligation, in case of death of the policyholder
15 Credit Risk
The potential for loss due to the failure of a borrower, endorser, guarantor or counterparty to repay a loan or honour another predetermined financial obligation.
16 Dividend Cover
Profits after tax divided by dividend, which measures the number of times dividends are covered by distributable profits for the period.
17 Dividend per Share
Total dividend declared for the financial year, divided by the number of ordinary shares entitled to received that dividend.
18 Earnings per Share
Net profits of the Company after tax, divided by the number of ordinary shares in issue.
19 Endowment
Life insurance payable to the policyholder if he or she is living on the maturity date stated in the policy or to a beneficiary if the insured dies before that date
20 Ex-gratia
Payment A payment made to an insured where there is no liability to pay under the terms of the policy.
21 Fair Value Gains and Losses
Fair value gains and losses are gains and losses that arise from changes in fair values of investment property and financial assets at FVtPL.
22 Fees and Commission Income
Fees and commission income includes the charges and policy fees paid by customers and reinsurance commission income.
23 Finance Cost
Finance cost includes charges on the financial services provided by financial institutions, particularly bank charges
24 Financial Instruments
Financial instruments represent the financial investments made out of the Life Fund and Shareholders’ Fund by a life insurer, with the aim of earning investment income to increase profitability of the company.
25 Financial Risk
The risk of a possible future change in one or more of a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index or other variable, provided in the case of a non–financial variable that the variable is not specific to a party to the contract.
26 Global Reporting Initiative (GRI)
A leading organisation in the sustainability field. GRI promotes the use of sustainability reporting as a way for organisations to become more sustainable and contribute to sustainable development allied with the UN Global Compact.
27 Gross Benefits and Claims Paid
Gross benefits and claims paid refer to the total amount of claims and claim-related expenses incurred during the year and benefits paid to customers, such as maturity, bonuses, advance payments.
28 Gross Change in Contract Liabilities
Gross change in contract liabilities is the net transfer to the Life Fund during the period.
29 Gross Written Premium (GWP)
Premium to which the insurer is contractually entitled and receivable in the accounting period.
30 Income Tax Expense
Income tax expense comprises the current and deferred tax. Current tax is the expected tax payable on the taxable income for the year and any adjustment to tax payable in respect of previous year
31 Insurance Contract
An insurance contract is a contract whereby one party, the insurer, in return for a consideration i.e, the premium, undertakes to pay to the other party – the insured, the insured sum of money or its equivalent in kind, upon the occurrence of a specified event that is contrary to the interest of the insured.
32 Insurance Contract Liabilities - Life
Due to the long-term nature of life insurance business, life insurers are required to maintain a separate fund to meet future policyholder obligations. This fund is known as ‘Insurance Contract Liabilities - Life’, or more commonly as ‘Life Fund’. An actuarial valuation is performed at each year end to determine the size of the fund necessary in comparison to the assets maintained out of the fund. Any excess of assets over the policy liabilities of the fund, known as the ‘Life Surplus’, is transferred to the shareholders’ funds of the company
33 Insurance Contract Liabilities
Unit Linked “These items represent the balances of the other separately identifiable funds, in addition to the Life Fund, maintained by a life insurer.” Insurance Contract Liabilities-Family Takaful Individual Investment Fund ISF
34 Insurance Provision – Long-Term
The fund to be maintained by an insurer in respect of its life insurance business in accordance with the Regulation of the Insurance Industry Act No. 43 of 2000.
35 Insurance Revenue Account
A statement which shows a financial summary of the insurance related revenue and expenditure transactions for the accounting period.
36 Insurance Risk
Uncertainty over the likelihood of an insured event occurring, the quantum of the claim, or, the time when claims payments will fall due.
37 Interim Payments
Periodic payments to the policyholders on a specific type of policy Investment contract A contract, which contains significant financial risk and may contain insignificant insurance risk, but does not meet the definition of insurance.
38 Investment Income
Investment income contains the interest income, dividend income and rental income on investments made out of the Life Fund, after deducting the related investment expenses.
39 Lapsed Policy
A policy lapses from the due date of the first unpaid premium, if the premium is not paid within the days of grace.
40 Liability Adequacy
Test An annual assessment of the sufficiency of insurance and/or investment contract with liabilities, to cover future insurance obligations.
41 Life Fund
Fund maintained to meet the obligation towards Life Policyholders.
42 Life Fund Surplus
The excess of the assets over the liabilities as determined by the actuary and after the distribution of dividends to policyholders.
43 Life Insurance Business
Insurance (including reinsurance) business falling within the classes of insurance specified as Longterm Insurance Business under the Regulation of Insurance Industry Act No. 43 of 2000.
44 Loans to life policyholders
Include the loans granted by the life insurer to policyholders. Eligible policyholders can obtain loans up to a pre-determined percentage of the surrender value of their policy
45 Market Risk
The potential for a negative impact on the statement of financial position and/or income statement resulting from adverse changes in the value of financial instruments as a result of changes in certain market variables. These variables include interest rates, foreign exchange rates, equity and commodity prices and their implied volatilities, as well as credit spreads, credit migration and default.
46 Maturity
The time at which payment of the sum insured under a life insurance policy falls due at the end of its term.
47 Mortality
The ratio of deaths to the entire population or to a particular age group. It is globally expressed in numbers or rates and set out in mortality tables.
48 Net Assets per Share
Net assets attributable to shareholders’ equity divided by the number of ordinary shares issued.
49 Net Claims
Incurred Claims incurred less reinsurance recoveries.
50 Net Written Premium
Gross written premium less reinsurance premium ceded payable.
51 Operational Risk
The potential for loss resulting from inadequate or failed internal processes or systems, human interactions or external events, but excludes business risk.
52 Other Operating and Administrative Expenses
Other operating and administrative expenses include administration, staff, sales and marketing expenses related to the company
53 Other operating revenue
Other income comprises fees charged for policy administration services, and miscellaneous income.
54 Participating Business
Life Insurance business where the policyholders are contractually entitled to share in the surplus of the relevant life fund.
55 Policy Loan
Under an insurance policy, the amount that can be borrowed at a specific rate of interest from the issuing company by the policyholder, who used the value of the policy as collateral for the loan. In the event the policyholder dies with the debt partially or fully unpaid, the insurance company deducts the amount borrowed, plus any accumulated interest, from the amount payable
56 Policy schedule/booklet
The printed document issued to the policyholder by a life insurance company stating the terms of the insurance contract.
57 Premium receivables
Represent the gross written premium accrued up to the reporting date.
58 Premium
The payment, or one of the periodic payments, a policyholder agrees to make for an insurance policy. Depending on the terms of the policy, the premium may be paid in single payment or a series of regular payments.
59 Realised Gains
Realised gains and losses include gains and losses arising on sale of financial assets and Property, Plant and Equipment.
60 Reinsurance Commission
Commission received or receivable in respect of premium paid or payable to a reinsurer.
61 Reinsurance Payables
Reinsurance payables contain amounts outstanding to be paid to reinsurers by a life insurer as at the reporting date.
62 Reinsurance Premium Ceded
The premium payable to the reinsurer.
63 Reinsurance Receivables
Represent the amounts receivable by the life insurer from the reinsurer for the claims made the policyholders.
64 Retention
That part of the risk assumed which the insurer/ reinsurer does not reinsure/retrocede, i.e. retained net for own account.
65 Return on Shareholders’ Equity
Profits after tax divided by total equity attributable to shareholders’ as at the reporting date.
66 Return on Total Assets
Profits after tax divided by total assets attributable to shareholders.
67 Rider
An amendment to an insurance policy that modifies the policy by expanding or restricting its benefits or excluding certain conditions from coverage.
68 Risk Based Capital (RBC)
An amount of capital based on an assessment of risks that a company should hold to protect policyholders against adverse developments.
69 Sales Agent
A broker Sales agent is an intermediary between a prospective policyholder and a life insurance company.
70 Surrender
Termination of an insurance policy by the insured before the expiry of its term.
71 Surrender Value
The sum payable by an insurance company upon the surrender of a life insurance policy before it has run its full course.
72 Total Available Capital (TAC)
Measures the actual available capital held by an insurer eligible to calculate capital adequacy.
73 Underwriter
Member of an insurance company that acts on behalf of his or her employer to negotiate, accept or reject the terms of an insurance contract. They are responsible for ensuring the quality and reliability of risk-transfer solutions. Their job is to develop products that best reflect the characteristics of the risks and clients’ needs.
74 Underwriting
The process of classifying applicants for insurance by identifying such characteristics as age, sex, health, occupation and hobbies. People with similar characteristics are grouped together and are charged a premium based on the group’s level of risk. The process includes rejection of unacceptable risks.
75 ESG (Environmental, social and corporate governance)
A framework used to assess an organization’s business practices and performance on various sustainability and ethical issues.
76 CRRO - Climate-related Risks and Opportunities
Climate-related risks refers to the potential negative effects of climate change on an entity. These risks are categorised as climaterelated physical risks and climate-related transition risks. Climate-related opportunities refers to the potential positive effects arising from climate change for an entity. Efforts to mitigate and adapt to climate change can produce climaterelated opportunities for an entity.
77 UN SDGs - United Nations Sustainable Development Goals
The 2030 Agenda for Sustainable Development, adopted by all United Nations (UN) members in 2015, created 17 world Sustainable Development Goals (SDGs). The aim of these global goals is “peace and prosperity for people and the planet” – while tackling climate change and working to preserve oceans and forests.
78 SRRO- Sustainability-related Risks and Opportunities
Sustainability-related risks and opportunities refer to the potential positive and negative impacts of environmental, social, and governance (ESG) factors on a company. Risks can stem from issues like climate change, regulatory shifts, or social unrest, while opportunities arise from adopting sustainable practices and innovations. Effectively managing these risks and opportunities helps companies minimize losses, enhance their reputation, and improve long-term value.