Insurance House P.J.S.C. Condensed Interim Financial Statements Notes to the condensed interim financial statements (continued)

For the period ended 30 June 2023

3 SignificantAccountingPolicies(continued)

3.1 IFRS17-InsuranceContracts(continued)

representative of the standard deviation of the portfolio LRC and LIC standard deviation respectively. Further, the Company assumes that the LRC and LIC each have a Lognormal distribution with the LIC mean matching the sum of the IBNR, OS and ULAE while the LRC mean matches the UPR of a given portfolio. The risk adjustment for non-financial risk is the compensation that the Company requires for bearing the uncertainty about the amount and timing of the cash flows of groups of insurance contracts. The risk adjustment reflects an amount that an insurer would rationally pay to remove the uncertainty that future cash flows will exceed the expected value amount. The Company has estimated the risk adjustment using a confidence level (probability of sufficiency) approach for different lines in the range of 60-75 percentile. That is, the Company has assessed its indifference to uncertainty for product lines (as an indication of the compensation that it requires for bearing non-financial risk) as being equivalent to the 6075percentile confidence level less themeanofan estimated probability distribution of thefuturecash flows. The Company has estimatedthe probability distribution of thefuture cash flows, and the additional amount above the expected present value Of future cash flows required to meet the target percentiles.

Insuranceandfinancialriskmanagement

The Company’s insurance and financial risk management objectives and policies are consistent with those disclosed in the audited financial statements as at and for the year ended 31 December 2022. There have been no changes in any risk management policies since the year end. The accounting policies in respect of property and equipment, intangible assets and financial assets have been disclosed in this condensed consolidated interim financial information as required by Securities and Commodities Authority (“SCA”) notification dated 12 October 2008.

Key Accounting Policy choices

IFRS 17 requires the Company to make various accounting policy choices. The key accounting policy choices made by the Company are described below:

IFRS17Options Adoptionapproach

Policy acquisition cost

Liability for Remaining Coverage ("LRC") adjusted for financial risk and time value of money

Liability for Incurred Claims ("LIC") adjusted for time value of money

Insurance finance income and expenses

Where the coverage period of each contract in the group at initial recognition is no more than one year, IFRS 17 allows anaccounting policy choice of either expensing the insurance acquisition cash flows when incurred or amortizing them over the contract's coverage period.

Wherethereisnosignificantfinancingcomponentin relation to the LRC, or where the time between providing each part of the services and the related premium duedateis nomore than a year,anentity is not required to make an adjustment for accretion of interest on the LRC.

Whereclaimsareexpectedtobepaid withinayear of the date that the claim is incurred, it is not required to adjust these amountsfor the time value of money.

IFRS 17 provides an accounting policy choice to recognizetheimpactofchangesindiscountratesand other financial variables in profit or loss or in OCI. Theaccountingpolicychoice(thePLorOCIoption) is applied on a portfolio basis.

The Company amortized the insurance acquisition cost for all contracts. The Company allocates the acquisition cost to groups of insurance contracts issued or expected to be issued using a systematic and rational basis.

For PAA model, Company has elected not to adjust the Liability for Remaining Coverage for discounting, as it expects the time between providing each part of the coverage and the related premium due date to be one year or less

Company will discount all future incurred claim cashflows.

Entire insurance finance income or expense for the period will be presented in the statement of income.