2015 newim annual report by Innovative Marketing Services

15 20 AnnualReport

NEWIM Annual Report 2015

VISION To be a leader and role model in the Insurance Industry through building a better and sustainable way of life for our customers, contributing to the communities within the society that we operate and adhering to proper regulatory requirements.

MISSION To fulfill the needs of all our policyholders by providing financial security and peace of mind with innovative and diversified products at the highest quality service.

CORE VALUES Commitment to observing the highest ethical standards and compliance, to ensure success of the company and to live up to providing protection to all our customers. Continuously adapt and innovate products to create new opportunities for our customers and employees using cutting edge technology. Exercising the utmost integrity and confidentiality in serving and providing excellent service.

COMPANY SLOGAN “Our Mission Is Your Protection” “We can’t Replace Your Memories .......We can Help You Build New Ones”

“Our Mission Is Your Protection”

NEWIM Annual Report 2015

“Our Mission Is Your Protection”

Table of Contents 01 Vision, Mission, Core Values & Company Slogan 03 Corporate Information 04 Chairman’s Review 06 Financial Highlights 08 Audited Financial Statements

“Our Mission Is Your Protection”

NEWIM Annual Report 2015

Corporate Information Head Office: P.O. Box 303 Young Street, St. George’s Telephone: (473) 440-2883/5

Bankers: Republic Bank (Grenada) Limited Grand Anse, St. George Telephone: (473) 444-2265

Directors: Mr. Kennie John Executive Chairman Mrs. Roslyn John Secretary (Board of Directors) Mr. Alban John Non-Executive Director Mr. Henry Joseph Non-Executive Director/Chairman-Audit Committee Mr. Lawrence Lambert Non-Executive Director Mr. Morris Mathlin Non-Executive Director Mr. Daniel Roberts Non-Executive Director Auditors: W.R. Agostini & Company Archibald Avenue, St. George’s Telephone: (473) 440-4861 Actuary: Morneau Shepell Toronto, Ontario, Canada Telephone: (416) 380-2721 Attorneys: Law Office of Alban M. John Donovan House Upper Scott Street, St. George’s Telephone: (473) 435-2710

Bank of Nova Scotia Halifax Street, St. George’s Telephone: (473) 440-3274 Sub Offices: Gladstone Road Grenville, St. Andrew’s Telephone: (473) 442-4013 Main Street Hillsborough, Carriacou Telephone: (473) 443-7098 Agencies: Chester John Agencies Limited. Young Street, St. George’s Telephone: (473) 440-3507 Association: Association of General Insurance Companies (AGIC) Church Street, St. George’s Telephone: (473) 440-7301

Danny Williams & Co. Lucas Street, P.O. Box 346, St. George’s Telephone: (473) 440-3107 / 3171

“Our Mission Is Your Protection”

NEWIM Annual Report 2015

Chairman’s Review

Kennie John Executive Chairman

Tribute Preparing this annual report has been somewhat poignant for me. I remain very mindful of and grateful for the persons whom have contributed to the twenty- one years of our Company’s existence. Firstly and most significantly, I must pay tribute to the man whose original idea of a new concept in insurance was to set up a modern organization, which is today known as NEWIM. Mr. Chester John’s passing in 2015 was the cause of much sadness. His drive for excellence, determination and commitment will continue to inspire us all.

The Life Division experienced a loss in 2015 due to the withdrawal of business activity in the Eastern Caribbean at the end of 2014. Also, much was expended on developing some critical infrastructure in the Division. Our underwriting profits and reserves have increased, all of which are essential to a strong financial position.

Regulations & Insurance Market The Economy Grenada’s economy is showing signs of recovery. This is evident in the agriculture, tourism and construction sectors. The increase in the number of new vehicles purchased in 2015 superseded the mark of the previous year much to the delight of the automotive dealers and the insurance industry. The number of homes and hotels being renovated and built is evidence of a more confident economy. Despite improved economic activity in those sectors, unemployment remains high and our financial sector has contracted along with credit growth.

Underwriting Performance The company recorded a 10% increase in its overall policy count for the financial period. Notwithstanding this improvement in business activities throughout the year and in particular the fourth quarter, premium income remained identical to that of the previous twelve months.

The market is experiencing a climate change involving mergers and acquisitions as a result of the reality of little growth, plummeting rates and proposed regulations. The effort to harmonize the insurance regulations and legislation throughout the Eastern Caribbean continues to move forward and has gained momentum with the appointment of a regional steering committee called Eastern Caribbean Financial Services Regulatory Commission- ECFSRC. Members of this committee include a drafter, regulators, industry members and legal representatives from the Attorneys General Office in the region. Consultations are scheduled around the region for 2016. Our company has started preparing for the new proposed insurance regulations. All members of staff are aware of the changes to come and managers are preparing and familiarising themselves accordingly. Compliance with the Anti Money Laundering and Counter Terrorist Financing laws are ingrained in our day to day activities and training is ongoing.

A strong underwriting performance in our Property and Casualty Division was achieved by re-engaging our traditional niche market and employing equally strong reinsurance strategies. This contributed significantly to a positive result.

“Our Mission Is Your Protection”

NEWIM Annual Report 2015

Business Infrastructure The company continued to be innovative by investing and enhancing our key business infrastructure during 2015. A new suite of products was added to satisfy today’s market demands and to increase overall flexibility of products, so that we become more competitive in the market by being able to offer insurance coverage to all income brackets. Improvements in information technology systems, AML policy and procedure, documentation and implementation to comply with modern regulatory standards, corporate governance and to enhance efficiencies and productivity to the highest possible operating standards are other areas where the company expended resources. Our human resource is our greatest asset and as such is always a priority. Along with specialised training in estate management and personal finance, our company has the privilege of having all employees of the Property & Casualty Division certified by the Chartered Insurance Institute in at least Foundation of Insurance (FIT).

Special Projects We continue to offer internship placements to students. In 2015, for the first time in our company’s history, the internship program brought together students from St. George’s University and Grenadian students studying at international universities in specialized areas such as Actuarial Science and Pure Math. The students participated in a project which involved the creation of a finance administration and analytic software application to be utilized by our Finance Division.

This restructuring and rebranding represents an 18 Million Dollar investment. This shows the commitment to the insurance industry by the shareholders of NEWIM and to Grenada and the Eastern Caribbean. Though achieving success in the current economic and financial environment is challenging, we have confidence in the long-term success of our business, management is focused and we believe our strategy is solid. The industry is highly competitive and regulations are changing. We are very conscious of the risks that are arising in the areas of money laundering and terrorist financing, our Board of Directors considers risk assessment and risk management to be among its key responsibilities. We remain confident however, that our measured approach and strong processes will allow us to make the most of the opportunities ahead as we continue to grow and strengthen our organization. We will continue to embrace innovation and pay close attention to our productivity and market share. I must thank our hard working and dedicated staff and Board of Directors whose efforts and endurance cannot be understated. Without their continued commitment and support our company will not be where it is today.

Kennie John Executive Chairman

We are proud to provide these rear opportunities to our youthful minds and would continue to grow this internship program.

Future Plans The coming year will be an extremely important one for us. Our company will be restructured to comply with new regulations. Our new structure will comprise of an insurance group with both our Life and General lines of business operating independently. This change places the company in a ready position for compliance and future opportunities for growth throughout the region. Our goal is to deliver a better consumer experience and a wider variety of product options to clients which will suit their individual needs.

“Our Mission Is Your Protection”

NEWIM Annual Report 2015

Financial Highlights PREMIUM & PORTFOLIO ANALYSIS Motor Coverage

EC$ 19,613,119 in Aggregate Coverage

The Company retained in excess of 2,600 vehicles on its register by the 2015 year end, similar to that of the preceding year. Of this, 43% had at least the basic comprehensive coverage. Comparative premium income declined by only 4%, despite plummeting premium rates. Private automobiles accounted for 70% of the motorist insured. The aggregate sum insured for comprehensive policies recorded at year end was EC$ 19,613,119.

Property Protection

> EC$ 400,100,000 in Aggregate Coverage

In 2015, the Property portfolio experienced an overall growth of 3% in the gross premium income over the preceding year. In particular, Commercial risk insurance coverage recorded a 7% increase over the 2014 comparative year and accounted for 47% of the current property portfolio. The aggregate sum insured of the Property business (Commercial and Private) exceeded EC $400,100,000 at the Statement of Financial Position Date. 54 % of this aggregate coverage was attributed to the parish of St. George. Of the 1044 properties insured at year end, 81% were Private dwellings.

Life Business

Gross Face Value of

EC$119,174,000

The Financial year 2015 saw the growth in the gross premium income of Long Term business by 40 % over the 2014 comparative year. This was mainly due to the 41 % increase in individual life business, predominated by the purchase of whole life policies. At December 31 2015, there were 926 lives insured on the companyâ&#x20AC;&#x2122;s register with a gross face value of EC$ 119,174,000. Of this 749 were Whole Life policyholders. The gender ratio indicated that for every 25 policies purchased, 13 were of the male gender.

Health Business

Gross Face Value of

EC$ 64,050,000

Health policies were provided to 323 persons by the end of the 2015 financial year, inclusive of individuals covered under group health plans. Contrary to the life insurance policies, 61 of every 100 policies on record were procured by the female gender. Gross premium income amounted to EC$ 352,506, of which 77% represented Individual health protection. The individual health premium income experienced momentum in 2015 by recording a 60% expansion over the 2014 comparative year. On the other hand, group health revenue increased by 10%. The gross face value of all health business at the end of the 2015 fiscal year amounted to EC$ 64,050,000.

â&#x20AC;&#x153;Our Mission Is Your Protectionâ&#x20AC;?

NEWIM Annual Report 2015

CLAIMS/BENEFITS PAID P&C Division 3,000

2,000 1,534,017

1,440,484 1,280,358

1,121,614

1,053,205

1,000

0 2015

2014

2013

2012

2011

Property & Casualty Division The severity of road accidents remained unchanged throughout the year 2015, however the records showed an increase in the frequency of calamities. As a result, compensations under motor vehicle coverage, inclusive of collision (structural) damage and personal injury amounted to $ 944,623 from 286 claims (2014 Comparative: EC$ 954,567). Overall, claims payout decreased by 15% as the Liability, Property and Marine loss experiences were lower than prior years.

Life & Health Division

300,000

247,737 200,000

219,269 188,909

174,443 132,534

100,000

0 2015

2014

2013

2012

2011

Life & Health Division Comparative Health Benefits payout increased over preceding year. There was notable disbursement in Prescription (medical) care which surged by 90%. Optical Care claims grew by 53% and maternity benefits more than doubled over the prior year statistics. Death benefits paid under the Creditors’ Life program declined by 58% due to the loss of one major Creditor’s Life scheme. The 2014 Financial information is based on a reporting period of fourteen (14) months Source: NEWIM Life and General Assurance Company Limited Audited Financial Statements 2015.

“Our Mission Is Your Protection”

NEWIM Annual Report 2015

Audited Financial Statements 2015

Table of Contents 09 Auditors’ Report 10 Statement of Financial Position 11 Statement of Comprehensive Income 12 Statement of Changes in Equity 13 Statement of Cash Flows 14 Notes to Financial Statements

“Our Mission Is Your Protection”

NEWIM Annual Report 2015

Co. Notes toW.R. the Agostini Financial& Statements Chartered Certified Accountant for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

WRA & Co.

P.O Box 380, Archibald Avenue, St. George’s, Grenada, W.I. • Tel: (473) 440-4861 / 440-8039 • Fax: (473) 440-9770 • Email:agostini@spiceisle.com

Report of the Auditors to the Members of NEWIM Life and General Assurance Company Limited We have audited the accompanying financial statements of NEWIM Life & General Assurance Company Limited, which comprise the statement of financial position as at December 31, 2015 and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of the company as at 31 December 2015 and of its financial performance and its cash flows for the period then ended in accordance with International Financial Reporting Standards.

St. George’s, Grenada April 28th, 2016. Chartered Certified Accountants

The 2014 Financial information is based on a reporting period of fourteen (14) months “Our Mission Is Your Protection”

NEWIM Annual Report 2015

Statement FinancialStatements Position Notes to the of Financial at ended December 31, 2015 for the As year December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

Notes

DEC 2015

Total

WRA & Co.

DEC 2014

Total

ASSETS Non Current Assets Property, Plant & Equipment

2,343,469

2,374,479

Investment Held -to- Maturity

798,500

888,500

Statutory Deposit

2,982,677

Trade & Other Receivables

4,151,644

4,417,222

Cash Resources

738,039

492,347

Deferred Expenses

216,629

200,288

43,212

43,157

6,124,646

2,977,999

6,240,978

Current Assets

Due by Directors Due by Affiliated Company

228,235

5,377,759

186,376

11,502,405

TOTAL ASSETS

5,339,390 11,580,368

LIABILITIES & EQUITY Current Liabilities Financial Liability- Bank Overdraft

511,969

610,661

Trade & Other Payables

1,483,358

1,414,897

75,717

66,075

Due to Directors Related Parties

311,396

252,885 2,597,402

2,545,781

Borrowings – current portion

214,962

Insurance Liabilities

1,945,109

Actuarial Liabilities

546,083

2,491,192

487,574

2,686,743

Borrowings – Long Term

995,212

1,018,938

Stated Capital

4,000,000

Statutory Reserve

810,390

Retained Earnings

S/E

608,209

201,263 2,199,169

Shareholders’ Equity

TOTAL LIABILITIES & EQUITY

5,418,599 11,502,405

518,516

5,328,906 11,580,368

Approved by the Board of Directors on April 28th 2016 and signed on their behalf by:

KENNIE JOHN Executive Chairman

ROSLYN JOHN Secretary The accompanying notes form an integral part of these Financial Statements The 2014 Financial information is based on a reporting period of fourteen (14) months

4,086,280 (168,147) 133,848 3,288 4,055,269

3,554,537 175,931 86,759 47,155 3,864,382

Investment Income

Other Income

(Inc)/Decrease in Actuarial Liabilities

77,000

66,000

The 2014 Financial information is based on a reporting period of fourteen (14) months (225,818)

(225,818)

50,845

The 2014 Financial information is based on a reporting period of fourteen (14) months

See accompanying notes to Financial Statements

60,248

50,845

1,644,754

4,815

660,521

90,500

191,674

483,259

16,416

197,569

1,695,599

32,558

418,669

1,244,369

(25,000)

(488,652)

1,758,021

LIFE/ HEALTH

DEC 2014

129,226

(8,717)

137,943

4,810,210

168,773

2,733,588

2,675

132,000

1,051,697

414,572

147,230

159,675

4,948,153

47,155

108,888

(58,509)

175,931

4,674,688

(83,317)

(2,920,312)

7,678,317

TOTAL

DEC 2015

111,093

5,639,775

172,892

2,950,582

(27,527)

167,500

1,492,912

584,904

96,921

201,591

5,750,868

3,291

166,406

418,669

(168,147)

5,330,649

(85,351)

(3,573,460)

8,989,460

TOTAL

DEC 2014

for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

355,044

(225,818)

1,309,589

5,779

455,577

66,000

174,815

425,232

23,083

159,103

1,083,771

22,129

(58,509)

1,120,151

(25,000)

(378,842)

1,523,993

LIFE/ HEALTH

DEC 2015

WRA & Co.

Notes to the Financial Statements

Net Income for the year after appropriation

Less: Transfer to Statutory Reserve

Net Income after Taxation

(8,717)

363,761

TOTAL EXPENSE

Net Income before Taxation 28

3,995,021

3,500,621

Finance Cost

Deduct provision for Income Tax

168,077

162,994

Administrative Expenses

60,248

(27,527) 2,290,061

2,675 2,278,011

Net fair value (gain)/loss on financial assets through profit or loss

Consultation

1,301,238

876,882

Claims (Net)

80,505

(10,660)

Commissions (Net)

101,645

124,147

9 22

Amortisation and Depreciation

Acquisition Costs (New Business)

EXPENSE

TOTAL REVENUE

(Inc)/Dec in Unexpired Premium Reserve

Net Premiums Written

4,022

(60,351)

572

(3,084,808)

(58,317)

(2,541,470)

Insurance Levy

Premiums Ceded to Reinsurers

7,231,439

Notes 6,154,324

Gross Premium Written

REVENUE

DEC 2014

PROPERTY PROPERTY & CASUALTY & CASUALTY

DEC 2015

For the year Ended December 31, 2015

Statement of Comprehensive Income

NEWIM Annual Report 2015

WRA & Co.

Balance as at December 31, 2015 -

647,969

162,421

Statutory Reserve Life/Health

565,162

355,044

(45,976)

256,094

60,248

(25,718)

221,564

Retained Earnings P&C

43,047

(225,818)

6,443

262,422

50,845

18,031

193,546

Retained Earnings Life/Health

5,418,599

129,226

(39,533)

5,328,906

111,093

(7,687)

5,225,500

Total

for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

The 2014 Financial information is based on a reporting period of fourteen (14) months See accompanying notes to Financial Statements

4,000,000

647,969

Statutory Reserve P&C

Revaluation Reserve

WRA & Co.

Notes to the Financial Statements

The 2014 Financial information is based on a reporting period of fourteen (14) months

F/P

I/S

Net Profit for the Year

Appropriations for the Year

4,000,000

I/S

4,000,000

Prior Year Adjustment

Balance as at December 31, 2014

Appropriations for the Year

Net Profit for the Year

Prior Year Adjustment

Balance as at October 31, 2013

Index

Stated Capital

for the year ended December 31, 2015 (With comparative figures for December 31, 2014)

Statement of Changes in Equity

12 NEWIM Annual Report 2015

WRA & Co.

NEWIM Annual Report 2015

Notes Statement to the Financial of CashStatements Flows

WRA & Co.

For for the the year year ended ended December December 31, 31, 2015 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

DEC 2015

DEC 2014

OPERATING ACTIVITIES Net profit before taxes

137,943

111,093

Prior year adjustment

(39,533)

(7,687)

Depreciation

147,230

96,921

Adjustments for:

Profit on disposal of property, plant & equipment

(26,999)

(2,999)

(108,888)

(166,406)

Net Cash from/(used in) operations

109,753

30,922

(Increase)/Decrease in trade & other receivables

220,308

(389,656)

9,587

13,690

(41,859)

(54,949)

Investment Income

(Increase)/Decrease in due by directors (Increase)/Decrease in due by affiliated company Increase/(Decrease) in trade & other payables Increase/(Decrease) in insurance liabilities Increase/(Decrease) in actuarial liabilities Increase/(Decrease) in due to related parties

79,246

(177,089)

(254,060)

116,440

58,509

(418,669)

58,511

37,946

Tax Paid

(19,500)

(53,330)

Net cash flow from operating activities

220,495

(894,695)

INVESTING ACTIVITIES Dividends Received Interest Received Purchase of property, plant & equipment Increase /(Decrease) in deferred expenses

19,550

24,439

134,608

167,634

(116,222)

(436,593)

(16,341)

(115,979)

Increase /(Decrease) in statutory deposit

(4,678)

10,317

(Increase)/Decrease in investments

90,000

(692,500)

Proceeds from the sale of property, plant & equipment

26,999

3,001

133,916

(1,039,681)

Repayments of borrowings

(210,027)

(253,728)

Proceeds from borrowings

200,000

311,000

Net cash flow from financing activities

(10,027)

57,272

Net (decrease)/ increase in cash, cash equivalents & bank overdrafts

344,384

(1,877,104)

(118,314)

1,758,790

226,070

(118,314)

738,039

492,347

Net cash flow from investing activities FINANCING ACTIVITIES

Cash, cash equivalents & bank overdrafts at beginning of year Cash, cash equivalents & bank overdrafts at end of year REPRESENTED BY: Cash on hand and at bank Bank overdrafts Net cash at end of year

See accompanying notes to Financial Statements The 2014 Financial information is based on a reporting period of fourteen (14) months

(511,969)

(610,661)

226,070

(118,314)

NEWIM Annual Report 2015

Notes to the Financial Statements for the year ended December 31, 2015 Expressed Expressed in Eastern in Eastern Caribbean Caribbean (EC) Dollars (EC) Dollars (continued...)

INCORPORATION AND PRINCIPAL ACTIVITY The Company was incorporated in Grenada on October 18th, 1994 and was duly registered under the Insurance Act of 1973 to conduct general business as well as life, health and annuity insurance. The 1973 Act was replaced by the insurance Act no. 5 of 2010. Under this Act the regulation and supervision of the Insurance sector is the responsibility of GARFIN- The Grenada Authority for the Regulation of Financial Institutions. This Body is defined as the Supervisor of Insurance in the 2010 Act and has duly registered and certified the Company to carry on both General and Long term insurance business in Grenada for the 2015 calendar year. The companyâ&#x20AC;&#x2122;s Long term business commenced during the 2009 financial year. At the date of the Statement of Financial Position, the company employed thirty nine (39) persons (2014: Thirty eight (38) persons) including registered life agents.

REPORTING CURRENCY The financial statements are expressed in Eastern Caribbean dollars (EC$), which is the functional currency of the economies in which the company operates. The EC dollar is pegged to the United States (US) dollar at the rate of US$ 1.00= EC$ 2.70

SIGNIFICANT ACCOUNTING POLICIES a) Basis of Accounting: These financial Statements have been prepared in compliance with International Financial Reporting Standards (IFRS) and in accordance with the historical cost convention as modified for the revaluation of land indicated in note 9. The preparation of financial statements which conforms to IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgment in the process of applying the Companyâ&#x20AC;&#x2122;s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed separately. The accounting policies set out below have been applied consistently by the Company in the preparation of the adjoining financial statements.

WRA & Co.

b) Foreign Currencies: The Eastern Caribbean Dollar is the functional currency of measurement and presentation of the Companyâ&#x20AC;&#x2122;s financial statements. Foreign Currency transactions during the year have been recorded at the rates of exchange ruling at the dates of the transactions. Monetary amounts receivable or payable at year end in foreign currencies are translated to the functional currency at the rate of exchange ruling at that date. Profits or losses on translation of monetary items are reflected in Comprehensive income. Monetary items are units of currency held and assets and liabilities to be received or paid in a fixed or determinable number of units of currency. Non-monetary items carried at historical cost are reported using the exchange rate at the date of the transaction. Other non-monetary items which are carried at their fair values are reported at the exchange rate that existed when the fair value(s) were determined. When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss is also recognized in other comprehensive income. Conversely, when a gain or loss on a non-monetary item is recognized in Comprehensive income, any exchange component of that gain or loss is also recognized in Comprehensive income. Other comprehensive income comprises items of income and expense that are not recognized in comprehensive income, but rather in equity, such as changes in appraisal surplus, remeasurements on defined employee benefits plans, etc.

c) Financial Instruments: A financial instrument is defined as any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. A financial asset is a contractual right to receive cash in the future, while a financial liability is a contractual obligation to deliver cash in the future. A financial asset or a financial liability is recognized when the Company becomes a party to the contractual provisions of the instrument and in the case of a financial asset when control over the asset is transferred to the company.

The 2014 Financial information is based on a reporting period of fourteen (14) months

NEWIM Annual Report 2015

Notes to the Financial Statements for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

SIGNIFICANT ACCOUNTING POLICIES (continued...) c) Financial Instruments: (continued...) All financial assets and financial liabilities are recognised on the Statement of Financial Position or in the notes to the financial statements. Upon initial recognition, they are measured at cost, which is the fair value of the consideration given or received to acquire the financial asset or financial liability. Transaction costs are included in the initial measurement of all financial assets and liabilities. Subsequent to initial recognition, all financial assets are remeasured to fair value, except for the following:

(1) Loans and receivables originated by the Company and not held for trading.

WRA & Co.

At the date of the Statement of Financial Position, the carrying value of financial assets which are required to be remeasured are approximately equal to their fair value. Other financial assets are carried at amortised cost, less allowance for impairment in value. Financial liabilities, after acquisition, are measured at original recorded amount less principal repayments and amortisation. For financial assets and liabilities remeasured to fair value, differences arising on remeasurement are recognised in Comprehensive income for the period.

d) Loans- Long term Business

(2) Other fixed maturity investments, such as debt securities and mandatorily redeemable preferred shares that the Company intends and is able to hold to maturity; and

Policy Loans arise when the Company extends funds to the policyholder. Policy loans and accrued interest are fully secured by the cash surrender value of the policy. Automatic premium loans arise under the terms of a life insurance contract where premiums are past due. Only policies that have cash surrender values qualify for an automatic premium loan.

(3) Financial assets whose fair value cannot be reliably measured, such as some equity instruments (shares) with no quoted market price.

Policy Loans amounting to EC$ 3,686.00 were outstanding as at 31st December 2015. These loans bear interest of 7% per annum. (See note 12)

(i) Loans and Receivables These are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are carried at amortized cost, using the effective interest rate method less provision for impairment. A provision for impairment of loans and receivables is established when there is objective evidence that the company will not recover all amounts due according to the original terms.

(ii) Held-to-maturity Held to maturity financial assets are non-derivative assets with fixed or determinable payments and fixed maturities, other than those that meet the definition of loans and receivables that the Companyâ&#x20AC;&#x2122;s management has a positive intention and ability to hold to maturity. These instruments are recorded at amortized cost using the effective interest rate method, less impairment, with revenue recognized on an effective yield basis.

e) Revenue Recognition and Measurement In general, revenue is recognised when the outcome of a transaction can be estimated reliably and taking into consideration the probability of economic benefits flowing to the Company, the stage of completion of the transaction at the date of the Statement of financial position and the costs incurred on and to complete the transaction. Property and Casualty Business Premium income relates to both new and renewed insurance policies provided by the Company. Income is recognised when the Corporation has either collected from or billed customers in accordance with stipulated policy conditions. A provision is made for unearned premiums equivalent to the proportion of insurance premium received during the year which relate to periods of insurance subsequent to the date of the statement of financial position. Insurance Contracts Insurance contracts transfer significant insurance risk. It may also transfer financial risk. Financial risks includes credit risk, interest rate risk, liquidity and market risk.

The 2014 Financial information is based on a reporting period of fourteen (14) months

NEWIM Annual Report 2015

Notes to the Financial Statements for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

SIGNIFICANT ACCOUNTING POLICIES (continued...) e) Revenue Recognition and Measurement: (continued...) For the most part insurance contracts are classified based on the duration of the risk and whether or not the terms and conditions are fixed. Short term contracts Property and casualty insurance are in general one (1) year renewable contracts designed to provide insurance protection to property, motor and liability. Property insurance coverage provides compensation to policyholders for damages to their properties; including commercial properties and private dwellings (Homeowners). Customers may also be recompensed for the value of the properties in the event of a total loss. Casualty insurance offers coverage to the insured for risk resulting in bodily harm or financial loss to third parties in the normal course of business activities. Common types of casualty insurance include personal accident, employers’ liability, product liability and professional indemnity. Motor Vehicle insurance offers protection for damages or injuries to third parties arising from vehicle accidents caused by the negligence of the insured person. Motor insurance contracts provide indemnity coverage based on specified limits of liabilities in accordance with legislation. The Company also offers comprehensive protection to the insured for “own damage’’ loss. Short Term Contracts-Health Policies The Company also sells group and individual health and hospitalization contracts. These contracts protect policyholders against the consequence of events such as death, disability and sickness that would affect the ability of insured or his/her dependants to continue with their current lifestyle. Benefits are paid on the occurrence of an insured incident on a fixed basis or to the extent of the economic loss experienced by the policyholder. There are no maturity benefits or surrender benefits. Premium income is recognised when they are due on a monthly basis. Contracts which are billed quarterly, semiannually and yearly are recognized as earned revenue on a pro rata basis. The provision for unearned premiums is

WRA & Co.

recognized for the portion of the premium that relates to the unexpired terms of the coverage. Claims, benefits and loss adjustment are recorded in the Statement of Comprehensive Income as per note 23. The Corporation also offers Group Life, Creditors Life and other short duration life insurance contracts. These contracts provide benefits as a result of death; natural and accidental and disability. They are annually renewable contracts. Long Term Contracts These legally binding agreements insure events associated with human life (for example death, dismemberment and disability). Other benefits include accumulated cash values, policy loans and waiver of premium (WP) benefits. Premiums are recognised as earned when they become payable by the policyholder. Premiums are recorded before deduction of commission. If premiums remain unpaid after thirty one (31) days, the contract is either terminated or an automatic premium loan (APL) may settle the premiums. The company offers a range of life products including whole life, term life and endowment. Benefits and claims payable to beneficiaries are recorded as an expense in the relevant financial period. These are discussed further in note 23. Policy loans given to customers are recorded in the financial statements as loans and receivables. These are normally secured by the accumulated cash values of in-force policies. Reinsurance Long Term Business and Health The insurer may cede certain levels of risk to the reinsurers, in the normal course of business. This limits the exposure to loss on any single insured and also allows the Company to recoup benefits paid, by ceding premiums to reinsurers under quota share and excess of loss treaty contracts. The benefits to which the Company is entitled under reinsurance contracts held are acknowledged as reinsurance assets. These Reinsurance recoverable amounts are measured in accordance with the terms and conditions of the reinsurance contracts.

The 2014 Financial information is based on a reporting period of fourteen (14) months

NEWIM Annual Report 2015

Notes to the Financial Statements for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

SIGNIFICANT ACCOUNTING POLICIES (continued...) e) Revenue Recognition and Measurement: (continued...) Reinsurance liabilities consists of premiums payable for reinsurance coverage and are expensed in the relevant financial period. Any amount that remains unpaid for the current period is recorded in accounts payable and accruals as due to reinsurers.

f) Non-premium Revenue and Expense recognition Non-premium revenues and expenses are recognized on an accrual basis. Investment Income Interest income is included in the accounts using the effective interest rate method.

WRA & Co.

benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. Increases which results from the revaluation of Freehold land are credited to the revaluation surplus account in equity. Decreases that offset previous increases of the same asset are charged against the revaluation reserve directly in equity; all other decreases are charged to the Statement of Comprehensive Income. Assets are reviewed for impairment whenever there is objective evidence to indicate that the carrying amount of an asset is greater than its estimated recoverable amount and is written down immediately to its recoverable amount. The residual values and useful lives are reviewed, and adjusted where appropriate, at each Statement of financial position date.

i) Depreciation and Amortisation Dividend Income Dividends are recorded when the right to receive payment is established. Commissions Income Commission income is recognized on an accrual basis. This income relates to commissions received on reinsurance contracts and is calculated by a combination of a flat brokerage fee or a percentage of business ceded to the reinsurers. Finance Cost Finance cost is recognized in the Statement of Comprehensive Income as an expense in the period in which they are incurred.

g) Cash and Cash equivalents For cash flow purposes cash and cash equivalents include cash on hand, demand balances (short term) with the bank, bank term deposits and bank overdraft.

h) Property Plant & Equipment Except for land, Property, plant and equipment are stated at historical cost. Historical cost includes expenditure that is necessary and directly attributable to the acquisition of the assets. Expenditure that extends the useful lives or increases the value of assets are capitalized. Subsequent costs are included in the assetâ&#x20AC;&#x2122;s carrying value or recognized as a separate asset, as appropriate only when it is probable that future economic

Depreciation is provided on all depreciable assets on the straight line basis at rates sufficient to write off the cost or valuation of the assets over their useful lives. Repairs and maintenance are charged to current operations, whilst the costs of improvements are capitalized. The cost of property, plant & equipment sold, retired or otherwise disposed of and the accumulated depreciation thereon, are eliminated from the accounts and the resulting gain or loss reflected in current operations. The annual rates for depreciation are as follows: Asset Rate Furniture, Computer Equipment, Other electronics and Software 33.33% Furniture, Fixtures and other Equipment 10% Motor Vehicles 20% Leasehold Improvements 10%

j) Impairment of assets The Company at each statement of financial position date assesses whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset is said to be impaired if its carrying amount exceeds its recoverable amount. The amount of the impairment, for assets carried at amortized cost is calculated as the assets carrying amount less the present value of expected future cash flows discounted at the original effective interest rate of the financial instrument.

The 2014 Financial information is based on a reporting period of fourteen (14) months

NEWIM Annual Report 2015

Notes to the Financial Statements for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

SIGNIFICANT ACCOUNTING POLICIES (continued...)

WRA & Co.

the present value of the expected expenditure necessary to cover the obligation and consider the risks and uncertainties surrounding the obligation.

j) Impairment of assets (continued...) Where the Company expects a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain and the amount of the receivable can be reliably measured.

Objective evidence that a financial asset or group of financial assets is impaired consist of observable data that is brought to the attention of management as a result of one or more of the following events:

(i)

It is probable that the issuer or the debtor will enter bankruptcy or other financial reorganization

(ii) The issuer or the debtor is experiencing significant financial difficulties (iii) There is a breach of contract, such as a default or delinquency in payments (iv) There is no longer an active market for that financial asset due to financial difficulties (v) Data or information that indicates there is the likelihood of a decrease in the estimated future cash flow from the asset or group of assets since the initial recognition of those assets. Such data include: »» adverse changes in payment status of issuers or borrowers »» local or national economic conditions that is associated with defaults on the asset or group of assets. If in a subsequent period, the amount of the impairment reduces and the reduction can be objectively related to an event that transpired after the impairment was recognized, the previously recognized impairment is decreased and the decrease is recognized in the statement of comprehensive income.

k) Provisions Provisions are recognized when the company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be expected to settle the obligation and a reliable estimate of the obligation can be ascertained. The amount of the provision represents the best estimate of the consideration required to settle the present obligation as at the end of the reporting period. Provisions are measured at

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS IN APPLYING ACCOUNTING POLICIES In the application of the Company’s accounting policies, management is required to make judgments and assumptions that affect the value of assets, liabilities and comprehensive income. These critical estimates are based on historical data and expectations of future events. The Company continually evaluates the estimates and relies on consultation with experts including actuaries and legal counsel in ascertaining the values to be incorporated in the financial statements. Impairment of Loans and Receivables The Company makes an in depth assessment into the possible impairment of receivables resulting from insurance contracts. The determination of the provision for bad and doubtful debts is completed by reviewing the age of the receivable along with the credit worthiness of the debtor. Provision for Outstanding Claims The Company determines the provision for outstanding claims by estimating the value of the claims that are reported but not settled by the year end. The liability also considers Claims incurred but not reported (IBNR) by incorporating statistics based on historical data. Useful Lives of Property, Plant and Equipment The Company conducts a periodic review of the useful lives of its Property, Plant and Equipment. Factors such as technological development and changes in market conditions may negatively affect the estimated useful life of these assets. Any significant changes in the expected useful life, depreciation and amortization charges are adjusted prospectively.

The 2014 Financial information is based on a reporting period of fourteen (14) months

NEWIM Annual Report 2015

Notes to the Financial Statements for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

MANAGEMENT OF INSURANCE AND FINANCIAL RISK In the normal course of business, the Company issues insurance contracts which transfers insurance or financial risk or both. Insurance risk is concerned with the possibility that an insured event or peril occurs and the uncertainty of the amount of the resulting claim. Claims Risk The principal risk associated with insurance contracts is that the amounts incorporated in the provision for claims and benefits are inadequate as the actual claim experiences are greater than expected. This could occur in an insurance portfolio as insured events are difficult to predict and vary from year to year. More so, predicting the frequency and severity of claim events is not an exact science. The key financial risk areas are summarized as follows:

• Credit risk • Interest rate risk • Foreign Currency risk

WRA & Co.

The Company’s main reinsurers for its general and long term contracts carry at least an A-rating by Standards and Poors (S&P) and AM Best. Interest rate risk Interest rate risk is the risk that the value of a financial instrument may fluctuate based on the volatility of interest rates in the market. This risk has the potential to result in financial loss as fluctuations may lead to cash flows from assets and policy obligation being mismatched. Foreign Currency risk Foreign currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. Except for the US dollar savings account in note 13, and the liability to reinsurers stated in note 16, the Company has no financial instruments that are denominated in currencies other than the Eastern Caribbean (EC) dollar. Operational Risk Operational risk is the uncertainty occurring from larger than expected losses or damage to reputation arising from inadequate or failed internal processes, systems, people or from external events.

• Operational risk • Liquidity risk Credit risk Credit risk emerges when the counterparty is unable to fulfil its obligation to the company, which may result in a loss to the value of financial assets. Exposure to this type of loss revolves around the following areas:

• Amounts due from insurance intermediaries • Reinsurers’ share of Insurance Liabilities • Amounts due from reinsurers in respect of claims already paid • Term Deposits placed with the banks • Amounts due from policyholders The Company manages its credit risk by several means including but not limited to the following: Term deposits are placed with banks regulated by the Eastern Caribbean Central Bank (ECCB); which are selected after considering the past and expected financial performance, credit worthiness and ability to honour payment obligations when they fall due.

This risk is managed through sound internal control policies and procedures, internal audits and review by management and human resource training and development. Liquidity Risk Liquidity risk is the risk that the company may experience cash shortages thus failing to meet its obligation when they fall due. INSURANCE RISK- Long Term Business and Health Contracts With life and health contracts, insurers are exposed to insurance risk including product design, pricing, mortality, morbidity, lapse, expense, reinsurance and estimation of actuarial liability.

(1) Product Design Risk This is the risk associated with products that are inadequately designed or insufficiently priced, which can lead to financial loss and defamation to the company’s goodwill. In pricing a product, the Company considers the expenses and related taxes, prevailing and expected investment yield,

The 2014 Financial information is based on a reporting period of fourteen (14) months

NEWIM Annual Report 2015

Notes to the Financial Statements for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

WRA & Co.

MANAGEMENT OF INSURANCE AND FINANCIAL RISK (continued...)

The policy maintenance expenses include assumptions about long term inflation and a provision for adverse deviation.

the age of the insured or beneficiary and the guaranteed rates in determining the cash value of policies.

(5) Reinsurance Risk

Mortality risk is a measure of the sensitivity of the Company’s liability for the resultant higher mortality rates than charged for in the premiums.

Reinsurance assets and cash flows are accounted for on a policy by policy basis. These amounts are integrated into the accounts based on the terms and conditions of the reinsurance treaties in force. Critical factors considered include reinsurance allowances, reinsurance premiums and the reinsured portion of the Company’s portfolio. It is essential to note that the existence of reinsurance treaties do not absolve the Company for its liability as the company is ultimately responsible for the timely settlement of claims that are lodged.

Higher mortality rates would result in greater claims payout for policies which provide the death benefit. Essentially, the Company reviews its mortality assumptions on an annual basis to ensure that its life products are appropriately priced.

Reinsurance risk extend to the reinsurance market which lends to the possibility that financial losses may be brought to bear on the Company as a result of adverse changes in the reinsurance market such as:

The risk of under pricing or over pricing may arise due to lack of statistical data and the use of assumptions that may differ significantly from the actual experience.

(2) Mortality risk

The Company utilizes the mortality chart of the Canadian Institute of Actuaries (CIA), in the absence of a Caribbean Mortality table. For the most part the tables have been incorporated at 100%, except for Creditors life which were included at 125% of CIA 8692 Aggregate mortality table. As the Company is new to this market, the Provision for Adverse Deviation (PfAD) is at the higher end of the recommended range.

(3) Lapses If many policies lapse or are terminated, in the early years before the Company is able to recover the initial cost connected with the issuing and maintaining the policy, then the Company would experience losses on these lapsed policies.

(4) Policy Expense and inflation Expense risk is the possibility that the future expenses are higher than planned. This risk occurs mainly in products where the cost cannot be passed to the customer thus increasing the actuarial liability of the firm. The expense amounts that are included in the policy reserves are to provide for the future costs of administering the policy. These expenses include premium collection, adjudication and claims processing, policy communication and related indirect expenses and overhead.

• Increase in reinsurance cost on existing treaties • Discontinuance of current treaties by existing reinsurers • Shrinking of reinsurance capacity • Insolvency of participating reinsurers (6) Actuarial Valuation In addition to the above factors, the under mentioned assumptions are considered by the Appointed Actuary (AA) in determining the actuarial reserve for future policyholders’ benefits:

(a) Investment Yield In calculating the policy reserves, the net investment income on assets which support the reserve is taken into account along with the income expected to be earned or forgone on reinvestment. The volatility of interest rate returns and the uncertainties associated with asset defaults can lead to asset/liability mismatch and consequential losses to the Company. The interest rate is assumed at 4% per annum for the financial period.

(b) Margin for Adverse Deviation assumption (MfAD) The Actuarial Reserves for the Financial period ended

The 2014 Financial information is based on a reporting period of fourteen (14) months

NEWIM Annual Report 2015

Notes to the Financial Statements for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

MANAGEMENT OF INSURANCE AND FINANCIAL RISK (continued...)

WRA & Co.

The Company manages its Claim risk by applying rigorous Underwriting principles that allow premiums to reflect the risk accepted. In most instances, the Company is guided by additional information such as medical reports, reports obtained from loss adjusters and other external sources in order to indemnify its claimants.

December 31, 2015 were determined under The Policy Premium Method (PPM). The reserves represent the present value of expected benefits and the associated costs less the present value of future premium using best estimate hypothesis and adjusted by a provision for adverse deviation.

RISK MANAGEMENT OVERVIEW In addition to the Strategies employed above, the Board of Directors is charged with the responsibility of ensuring that the Company manages risk by operating within the defined parameters of its Reinsurance treaties and in accordance with the terms and conditions set forth in the Insurance Contracts offered to the general public.

The provision for adverse deviation allows for possible deterioration in the application of best practices by employing some sensitivity analysis while relying on the typical experience of other insurers in the Caribbean region. Long Term Contracts (Life)

The Company employs structures that would allow it to accomplish the following underlying principles:

Contracts which provide coverage in the event of death could be considerably impacted by lifestyle changes such as smoking, alcohol consumption, exercise habits and epidemics such as AIDS. The Company manages these risks through reinsurance arrangements, stringent underwriting procedures including mandatory medical examinations and testing. The Company aims to underwrite risk of diverse nature, type and level. In addition, maximum limits are set in respect of benefit payout to a single insured within a given year of coverage.

• Identify and categorize risk including emerging risk • Measure significant risk areas • Monitor and Control risk • Report and Communicate risk Capital Risk Management The Company designs its Capital Risk Protocol to ensure that it would be able to continue as a Going Concern, provide the flexibility in order to take advantage of growth opportunities, support the risk associated with the enterprise and to optimize the return to its shareholders.

Short Term Contracts Health Claims are affected by similar factors mentioned above. Property and Casualty Claims The exposure of the Company to substantive losses under these short term contracts can be greatly attributed to catastrophic events such as earthquakes, floods, collapse of major corporations (liability insurance cover) including banks, subsidence and windstorms. Actual losses may also overrun anticipated losses where fallacious claims are submitted. The monetary awards granted by the judicial courts for bodily injury to employees (employer’s Liability), and the members of the public (Public Liability) may exceed the anticipated values derived in the reserving of claims. In addition, the settlements (general damages) granted to injured passengers and pedestrians involved in motor vehicular accidents may be higher than expected.

The Capital Structure of the Company comprise of its liabilities, including long term loans, and equity. Equity is comprised of issued shares, reserves and retained earnings.

OPERATING SEGMENTS International Financial Reporting Standard 8 sets out the criteria that defines an operating segment. Having considered the products and services that are subject to similar risks and returns, the Company has identified the following reportable business segments:

• Property and Casualty – “P&C” (General Business) • Ordinary and Group Life (Long Term) • Individual and Group Health

The 2014 Financial information is based on a reporting period of fourteen (14) months

NEWIM Annual Report 2015

Notes to the Financial Statements

WRA & Co.

for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

OPERATING SEGMENTS (continued...) As at December 31, 2015, there were no distinguishable geographical segments, as the Company operates in ecological districts that are of similar political and economic conditions and subject to similar risks and returns. For the purpose of Segment reporting, direct expenses are allocated to the relevant business segment while general and administrative expenses are apportioned on the basis of number (and/or value) of policies underwritten by the respective segments.

OTHER POLICYHOLDERSâ&#x20AC;&#x2122; FUNDS Long Term Business Other Policyholdersâ&#x20AC;&#x2122; Funds relate to proposal deposits, prepaid premiums, unpaid claims and benefits and unearned premiums.

PROPERTY, PLANT & EQUIPMENT Cost/Valuation

Freehold Land

Balance at 31/12/14

1,816,260

1,332,793

860,302

294,666

4,304,021

Additions during the period

115,610

612

116,222

Revaluation

Disposal during the period

(395,000)

1,816,260

1,448,403

465,302

295,278

4,025,243

Balance at 31/12/14

1,215,038

522,305

192,199

1,929,542

Depreciation for the period

51,624

71,660

23,946

147,230

Elimination on disposal

(394,998)

Balance at 31/12/15

1,266,662

198,967

216,145

1,681,772

31/10/2014

1,816,260

117,755

337,997

102,467

2,374,479

31/12/2015

1,816,260

181,741

266,335

79,133

2,343,469

Balance at 31/12/15

Furniture & Equipment

Motor Vehicles

Leasehold Improvements

Total

Accumulated Depreciation

Written Down Value

Except for land at Marian and Grand Anse, property, plant and equipment are stated at historical cost. The residential land at Marian, comprising 10,627 square feet was revalued by qualified engineering firm Joseph John and Associates in October 2007. The valuation amounted to EC$ 86,000, resulting in a surplus of EC$ 47,328. The land at Grand Anse, comprising 25,445 square feet was revalued in October 2008 also by Joseph John and Associates Limited and again in July 2011 by engineer Nigel A. John. The valuation totalled EC$ 1,730,260 on which a surplus of EC$ 192,195 resulted. Depreciation expense of $147,230 (2014 : $96,921) has been charged to comprehensive income. If land were stated on a historical cost basis, the amounts would be as follows:

The 2014 Financial information is based on a reporting period of fourteen (14) months

NEWIM Annual Report 2015

Notes to the Financial Statements

WRA & Co.

for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

PROPERTY, PLANT & EQUIPMENT (continued...) DEC 2015

DEC 2014

At December 31 Cost

1,576,737

Accumulated depreciation

Net book amount

1,576,737

Bank borrowings are secured on land to a value of $1,150,000 (2014 : $1,150,000). See note 17.

10.

HELD-TO-MATURITY INVESTMENT DEC 2015

DEC 2014

INSTRUMENT Government of Grenada Bonds 6 % Bond - 1999/2000

71,000

8 % Bond - 2006/2007

125,000

196,000

225,000

300,000

277,500

292,500

100,000

798,500

888,500

Government of Antigua & Barbuda 5 Year Bond 7.25 % Bond - 2013/2018 Government of St. Lucia 10 Year Bond 7.50 % Amortized Bond - 2014/2024 Certificate of deposit- CCCU Term deposit â&#x20AC;&#x201C; 3 Years @ 4.25 % TOTAL

Government of Antigua & Barbuda 5 year Treasury bond The purchase of Government of Antigua & Barbuda Treasury Bond (T-Bond) was completed on 17th December 2013. The bond trades on the Eastern Caribbean Securities Exchange (ECSE) under the symbol AGG051218 at a return of 7.25% per annum, payable semi annually. This instrument matures on 17th December 2018 and the principal will be repaid by eight (8) semi-annual instalments commencing 17th June 2015. The bond is assigned to the Long term and Health business segment. Government of St. Lucia 10 year bond The Publicly traded Government of Saint Lucia Bond was secured on 20th May 2014. It is identified by the trading symbol LCG100524 and matures on May 20th 2024. The principal amount of the EC$ 300,000 bond is being amortized beginning November 20th 2014 to expire on May 20th 2024 by way of a bullet payment payable on the said date. To date, the St. Lucia Government has repaid EC$ 22,500 of the initial outlay. The bond carries an effective interest rate of 5.7 % over its ten (10) year tenure. The Bond is assigned to the Property and Casualty (PNC) business segment. Certificate of Deposit The Certificate of Deposit with The Communal Co-operative Credit Union commenced on 3rd June 2014. The Investment carries expected returns of 4.25% per annum and matures in three (3) years on 3rd June 2017. The maturity sum on Certificate 004164A is calculated as EC$ 113,299.56.

The 2014 Financial information is based on a reporting period of fourteen (14) months

NEWIM Annual Report 2015

Notes to the Financial Statements

WRA & Co.

for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

11.

STATUTORY DEPOSIT Dec 2015 Assets Pledged to GARFIN

P&C

Dec 2014

Life

Total

P&C

Life

Total

Investment Held –To- Maturity Trinidad & Tobago Zero Coupon Bonds (6 Years)

280,850

327,659

423,341

429,110

Government of Saint Lucia Treasury Notes (6.8%)

550,000

Grenada Co-operative Bank Ltd. Ordinary Shares

85,225

600,000

535,000

100,000

635,000

535,000

100,000

635,000

160,000

50,000

210,000

160,000

50,000

210,000

31,316

143,318

93,416

Mutual Funds Clico Investment Fund (CIF): 45,320 Units Shares and Bonds

Certificate of Deposit Republic Bank (G’da) Ltd. Term Deposit365 days (0.25 %) Cash Deposit (Government of Grenada) 5 % Cash Deposit Assets Held by GARFIN Cash Deposit Cash (Proceeds from Clico EFPA) Cash (Proceeds from GORTT Bonds) Interest on Cash Deposits

19,337

4,290

23,627

13,099

3,174

16,273

Certificate of Investment (with GARFIN)

500,000

Certificate of Investment (by GARFIN)

(500,000)

2,228,387

754,290

2,982,677

2,224,825

753,174

2,977,999

Total

Under the provisions of Section 22 (1) and Schedule VI of the Insurance Act 2010, the Company is required to maintain a deposit with the Supervisor of Insurance of at least EC$ 150,000 in respect of its long term business. For the general insurance business, the deposit requirement is EC$ 50,000 or 40% of its net premium income of the preceding year, whichever is greater. Government of Republic of Trinidad and Tobago Zero Coupon Bonds This investment replaced the US dollar Executive Flexible Premium Annuity which matured on 14th September, 2010. These bonds were issued to protect the interest of the policyholders of the CL Financial Group and each bond carries an issue date of 1st December 2011. Every year a bond matures on 30th November, for the next six (6) years. The final bond matures on 30th November, 2021. With effect from 5th November 2013, the bonds were pledged to the Grenada Authority for The Regulation of Financial Institutions by the Central Bank of Trinidad and Tobago. At the Statement of Financial Position Date, the total investment was valued at TT$ 684,000, the EC equivalent being $ 280,850. Clico Investment Fund The Clico Investment Fund (CIF) is a closed end Mutual Fund which assets consist of 70% of Republic Bank Limited Shares (“RBL”) in addition to Government Securities with a coupon of 4.25% for a term of 25 Years. NEWIM currently holds 45,320 units of this fund which The 2014 Financial information is based on a reporting period of fourteen (14) months

NEWIM Annual Report 2015

Notes to the Financial Statements

WRA & Co.

for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

11.

STATUTORY DEPOSIT (continued...) is traded on the Trinidad and Tobago Stock Exchange (TTSE). On 31st December 2015, the securities were recorded at a market value of EC$ 9.34 (TT$ 22.75) per unit as compared to EC $ 9.47 (TT$ 23.06) at the end of the previous financial period. The trading loss of EC$ 2,675 is included in the Statement of Comprehensive Income for the period ended 31st December, 2015 as per Fair Value through the Profit and Loss. The CIF Security was assigned to GARFIN with effect from December 16th 2013. Insurance Levy Effective 30th June 2013, the Company was required to remit to the Grenada Authority For the Regulation of Financial Institutions an Insurance Levy in accordance to Insurance (Amendment) no. 6 of 2013. The Act was passed in the House of Representatives and Senate on 18th and 24th April, 2013 respectfully and requires the following: Levy Payable ■ General Insurance Business (Property & Casualty Business) An insurer registered in Grenada would remit to GARFIN, a Levy of 1 % on Gross Premium Income, net of premium refunds. This levy is due and payable by the 21st day of the following month. The levy commenced on premiums collected from the month of June 2013 onwards. ■ Long Term Business The registered insurer will deposit the sum of EC$ 500,000 from its “Insurance Fund Investments” to the regulator in accordance with Section 2 (2) of the Insurance Act no. 6 of 2013. On September 9th 2013, the Company confirmed by Certificate of Investment the Insurance Levy deposit of EC$ 500,000 with the Supervisory body. On the said date, the Insurance regulator reinvested the above sum with NEWIM where the company guarantees an interest return of 5% per annum (EC$ 25,000.00) payable semi-annually to GARFIN on December 31st and June 30th.

12.

TRADE AND OTHER RECEIVABLES DEC 2015

DEC 2014

Property & Casualty (General Business) Term Deposit - 365 days (RBGL 0.25 % p.a)

551,375

Receivable- TTSE Premium Receivables Claims Recoverable Interest Receivables Other Receivables

550,000

46,808

3,177,528

3,279,866

856,156

897,189

2,307

50,250

263,884

307,946

4,898,058

5,132,059

(850,115)

(821,874)

4,047,943

4,310,185

Agents’ Financing & Recoveries

57,196

67,434

Premiums due from Policy Holders

42,819

36,457

3,686

3,146

103,701

107,037

4,151,644

4,417,222

Less Provision for doubtful debts Total Life and Health

Policy Loans

Note 3 (d)

Total Grand Total The 2014 Financial information is based on a reporting period of fourteen (14) months

NEWIM Annual Report 2015

Notes to the Financial Statements

WRA & Co.

for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

12.

TRADE AND OTHER RECEIVABLES (continued...) Property & Casualty Business Segment Term Deposit Term Deposit 63004449 was renewed with Republic Bank Grenada Limited for an additional period of one (1) year (365 days) commencing July 8th 2015. This instrument guarantees an interest return of 0.25 % per annum and is hypothecated to the value of EC$ 479,000.00. Receivable- TTSE The Receivable amount represents the matured sum of the Government of Trinidad and Tobago Zero Coupon bond numbered TTK00415K305. This bond became due and payable to GARFIN on behalf of NEWIM Life and General Assurance Company Limited on 30th November, 2015. The CBTT Draft in the amount of TT$ 114,000.00 (EC$ 46,808) is currently being negotiated by GARFIN with the Central Bank of Trinidad and Tobago. The Company’s statutory deposit (PNC segment) will be adjusted once funds are received by the regulatory authority. Premium Accounts Receivable Premium accounts receivable are included at amortized cost. The Company makes an assessment on whether its receivables arising out of insurance contracts are impaired. A Provision for doubtful debts is made based on specific identification of doubtful balances. As debts become uncollectible they are written off against the provision. Additions to the provision are charged to Comprehensive Income.

13.

CASH RESOURCES DEC 2015 P&C

DEC 2014

Life/Health

P&C

Life/Health

Cash in hand and at Bank Cash Float

850

600

850

600

Petty Cash

748

Un deposited Funds (Cash in transit) Bank Of Nova Scotia Republic Bank (G’da) Ltd. Republic Bank (G’da) Ltd. (Forex)

5,860

1,745

16,445

4,838

21,926

30,449

Chequing Account Bank of Nova Scotia Republic Bank (G’da) Limited

254,885

217,464

193,069

193,281

60,530

70,354

67,463

69,335

278,575

459,464

171,735

320,612

Savings Account & Deposits Republic Bank (G’da) Limited US $ Savings Account (Forex) Republic Bank (G’da) Limited (US$ 25,680/38,002) Total Bank Overdraft Republic Bank (G’da) Limited

(511,969)

(610,661)

Net Total (Per Business line)

(233,394)

459,464

(438,926)

320,612

Cash & Cash equivalent as per Cash Flow Statement

226,070

The 2014 Financial information is based on a reporting period of fourteen (14) months

(118,314)

NEWIM Annual Report 2015

Notes to the Financial Statements

WRA & Co.

for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

14.

DEFERRED EXPENSES DEC 2015

DEC 2014

Cost Actuarial Fees - Design of Long Term Products (31/10/2007)

122,804

Actuarial Fees - Valuation of Liabilities (31/10/2012)

69,390

Actuarial Fees - Valuation of Liabilities (31/10/2013)

76,508

76,507

Actuarial Fees - Valuation of Liabilities (31/12/2014)

209,739

478,441

268,701

Incurred during the year Actuarial Fees - Valuation of Liabilities Critical Illness - Product design

67,923

Mortgage Indemnity - Product design

Persistency Bonuses

32,231

Flexible Premium Annuity (FPA)

14,454

Universal Life

Platinum Health

57,348

66,806 57,395

28,325

209,739

Amortization Amortization Brought forward (B/F) Actuarial Fees - Design of Long Term Products Actuarial Fees - Critical Illness Actuarial Fees - FPA Actuarial Fees - Mortgage Indemnity Actuarial Fees - Universal Life Actuarial Fees - Platinum Health

(122,804)

(17,019)

(8,509)

(9,710)

(6,819)

(13,361)

(5,665)

Actuarial Fees - Persistency Bonuses

(10,744)

Actuarial Fees - Valuation of Liabilities

(92,030)

(278,152)

(46,260)

(184,392)

Amortization during the year Actuarial Fees - Design of Long Term Products

Actuarial Fees - Valuation of Liabilities

Amortization of Persistency Bonuses

(5,372)

(10,744)

Critical Illness - Product design

(4,259)

(8,509)

FPA- Product Design

(1,445)

(2,891)

Mortgage Indemnity - Product design

(3,410)

(6,819)

Universal Life - Product design

(6,681)

(13,361)

Platinum Health - Product design

(8,567)

(5,665)

Actuarial Valuation 2014 Balance Carried forward (C/F)

(11,321)

(41,055) 216,629

(45,771)

(93,760) 200,288

The above represents professional fees incurred in designing the products for the long term business and expenditure resulting from Actuarial Valuation. Costs relating to design of long term products such as Whole Life and Term Life contracts are amortized at the rate of twenty percent (20 %) per annum on cost. On the other hand, the costs associated with Actuarial Valuation are written off over three (3) years using the straight line method. The 2014 Financial information is based on a reporting period of fourteen (14) months

NEWIM Annual Report 2015

Notes to the Financial Statements

WRA & Co.

for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

14.

DEFERRED EXPENSES (continued...) During the financial period ended 31st December 2015, the Company incurred additional expenditure relating to the development and pricing of new health products . These costs are also amortized at a rate of twenty percent (20%) per annum. In accordance with the provisions of Section 40 of the Insurance Act of 2010, the management of the Company has adopted the policy of conducting a full scale evaluation of the Actuarial liabilities every three (3) years. The next valuation is due on 31st December, 2017.

15.

BANK OVERDRAFTS DEC 2015 Republic Bank (Grenada) Limited

DEC 2014

511,969

610,661

The Overdraft facilities at Republic Bank (Grenada) Limited are secured as follows:

(a) Guarantee dated June 20th 2005 by directors with a face value of EC$ 250,000; (b) Hypothecation of Certificate of deposit totaling EC$ 479,000 (note 12); Interest is at the rate of 8.25 % per annum, subject to change by the bank without notice and subject to an additional rate of 3.0 % per annum if the pre-arranged overdraft limit of EC$ 800,000 is exceeded. Premature repayment of this facility as well as the loans mentioned in note (17) will give rise to a penalty fee equivalent to three (3) monthâ&#x20AC;&#x2122;s interest.

16.

TRADE AND OTHER PAYABLES Notes

DEC 2015

DEC 2014

Property & Casualty Business Sundry Creditors

247,029

196,505

Amounts Due to Reinsurers

570,848

549,803

Provision for Taxation

307,639

263,934

1,125,516

1,010,242

Due to Reinsurers

67,923

Sundry Creditors

137,673

198,197

Total Long Term/Health Business

Provision for Taxation Other Policyholdersâ&#x20AC;&#x2122; Funds

Total Grand Total

The 2014 Financial information is based on a reporting period of fourteen (14) months

152,246

138,535

357,842

404,655

1,483,358

1,414,897

NEWIM Annual Report 2015

Notes to the Financial Statements for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

17.

WRA & Co.

BORROWINGS Net Long Term Borrowings Total

Due Within One Year

DEC 2015

DEC 2014

Long Term Loans 64039804

160,722

22,578

138,144

167,619

64039592

105,357

14,531

90,826

98,989

64016052

668,566

53,151

615,415

471,956

64020549

275,529

124,702

150,827

280,374

1,210,174

214,962

995,212

1,018,938

1,220,201

201,263

TOTAL 2014 Loan Balances

Loan 64039804- This Loan from Republic Bank (Grenada) Limited was negotiated on 8th September, 2014 for the purchase of a motor vehicle. The Loan amount of EC$ 187,000, which bears interest at rate of 8% per annum commenced on September 9th 2014. It is repayable by monthly instalments of EC$2,915 which comprises of principal and interest. The loan carries tenure of 84 months (Seven (7) years) and matures on August 31st 2021. Loan 64039592- This Loan was arranged for the purchase of a motor vehicle. It accumulates interest at 8% per annum and carries a seven (7) Year (84 months) term. The monthly instalment of EC$ 1,935 on the amount of EC$ 124,000 consist of both principal and interest. The loan commenced on 7th August 2014 and expires on 31st July 2021. Loan No. 64016052 – This loan commenced on 11th July, 2005 to meet working capital requirements following Hurricane Ivan. It was refinanced on the 1st March, 2012 for an additional sum of $631,743 and proceeds of this loan amounting to $600,000 was pledged to GARFIN as part of the company’s Statutory Deposit (note 11). On 19th October 2015, an additional $200,000 was negotiated to satisfy operational liquidity. The remaining loan balance on the said date was $ 478,065.42. The loan is repayable in monthly instalments of $9,592.00 and is due to expire on 15th February, 2024. The loan is secured by fresh guarantee face value of $660,000 by Chester John Agencies Limited supported by equity in mortgage over commercial property on Young Street, St. George’s to be upstamped by EC$ 660,000. Loan No. 64020549 – This loan was contracted for and used to purchase land measuring 25,445 sq. ft. situated in Grand Anse, St. George. It bears interest at the rate of 8.25% per annum and is repayable in ten (10) years which commenced January, 2008 at the rate of $12,226 per month which includes both principal and interest. Security is by way of a mortgage bill of sale on the asset purchased, stamped to secure $1,150,000. On 12th November 2014, the instalment was adjusted to EC$ 12,266 based on a review of the amortization schedule. The Loan will be repaid in full on January 12, 2018.

The 2014 Financial information is based on a reporting period of fourteen (14) months

NEWIM Annual Report 2015

Notes to the Financial Statements

WRA & Co.

for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

18.

INSURANCE LIABILITIES DEC 2015

DEC 2014

Property & Casualty Business - â&#x20AC;&#x153;P&Câ&#x20AC;? Provision for Outstanding Claims (& IBNR)

345,597

422,744

1,458,580

1,634,512

84,232

82,217

Provision for Death Claims

50,485

55,280

Provision for Health Claims

6,215

4,416

1,945,109

2,199,169

Reserve for unexpired premiums Due to policy holders Long Term Business

Grand Total

Property and Casualty Business As per Section 179 of the Insurance Act No. 5 of 2010, the Company is required to include as part of its liabilities, a provision in respect of unexpired premiums. Section 180 requires the Company to provide reserves for claims outstanding at the financial year end and claims which have been incurred but not reported (IBNR).

19.

ACTUARIAL LIABILITIES No. of Lives

Annualized Premium

Gross Premium Income

Gross face Amount

Gross Statutory Reserve

Reinsured Amount

Net Statutory Reserve

Term

140

261,851

231,254

37,018,000

324,545

146,045

178,500

Whole Life

749

1,026,701

923,385

81,396,000

488,931

136,901

352,030

12,163

11,828

180,000

623

897

1,300,715

1,166,467

118,594,000

814,099

282,946

531,153

Endowment Total Individual Ordinary Life Group Life Individual Health Group Health Total Health All Business

4,824

5,020

580,000

725

265

323,073

272,710

52,350,000

9,275

82,127

79,796

11,700,000

4,930

323

405,200

352,506

64,050,000

14,205

1,249

1,710,739

1,523,993

183,224,000

829,029

282,946

546,083

Individual Ordinary Life Business The policy reserves for the Individual Ordinary Life Business was calculated under the Policy Premium Method (PPM). The reserves represent the present value of expected policy benefits and related costs less the present value of future premiums using the best estimate assumptions and adjusted by margins for adverse deviation (MfAD). These amounts, coupled with future premiums and investment income will be required to settle future outstanding claims, benefits and expenses on all policies. In calculating the reserves, assumptions are made concerning factors such as mortality, morbidity, future investment yield, future expense (maintenance) levels, future lapses and surrender rates. As the probability of deviation from best estimates declines, the provision for adverse deviation (PfAD) will be embedded in future income to the extent they are not required. (See also note 5.6 b)

The 2014 Financial information is based on a reporting period of fourteen (14) months

NEWIM Annual Report 2015

Notes to the Financial Statements

WRA & Co.

for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

19.

ACTUARIAL LIABILITIES (continued...) Group Life Business The reserve for the Group Life Business was established through an Incurred But Not Reported (‘IBNR’) provision of one monthly premium. Individual and Group Health Business An Incurred But Not Reported Reserve (‘IBNR’) and an Unearned Premium Reserve (‘UPR’) was ascertained for the Individual and Group Health business. The IBNR reserve was computed using an incurred claims development methodology which contained 48 months of claims data. An Unpaid Claims Adjustment Expense of 5% of the reserve and a Margin for Adverse Deviation (‘MfAD’) of 5 % were added to the reserve. The Unearned Premium Reserve was calculated for policies with modal premiums exceeding one month. All Business The total number of persons insured at the Statement of Financial Position date totalled 1249. This represents an increase of 28% over the previous period, where 971 persons were covered. The Gross Face value increased to EC$ 183,224,000 up from EC$ 93,359,000. With the use of algorithms, management has estimated the Health and Life liabilities at $ 546,083 as at December 31, 2015 with Gross Statutory Reserves of EC$ 829,029. The liability attributed to the reinsurers is EC$ 282,946. The last actuarial valuation was completed for the period ended 31st December 2014. At that date, the Gross Statutory reserve totalled EC $ 738,011 of which the reinsurer’s share amounted EC$ 250,437. The Net Statutory Reserve was calculated as EC$ 487,574. Section 40 of the Insurance Act no. 5 of 2010 requires the Company to undertake an Actuarial Valuation of its insurance liabilities at least every three (3) years and submit a report to the Supervisor of Insurance. The next valuation is due on 31st December, 2017. Insurance Fund Section 28 of the Insurance Act no. 5 of 2010 requires the Company to maintain an insurance fund consisting of Assets equal in value to its Insurance liabilities, including actuarial liabilities, as stated above in notes (18) and (19), less the amounts held on deposit with the Insurance Regulatory body as stated in note (11) above. At the Statement of Financial Position date, the company’s insurance fund was in surplus of EC$ 491,485.

20.

SHARE CAPITAL DEC 2015

DEC 2014

5,000,000 Shares of no par Value Issued and Fully paid 4,000,000 (October 2014: 4,000,000) Shares of no par value

4,000,000

810,390

The Capital requirement under section 12 of the 2010 Insurance Act is EC$ 2,000,000.

21.

STATUTORY RESERVE Balance at the beginning of the year Appropriation for the year Balance at the end of the year

The 2014 Financial information is based on a reporting period of fourteen (14) months

NEWIM Annual Report 2015

Notes to the Financial Statements

WRA & Co.

for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

21.

STATUTORY RESERVE (continued...) This reserve is required by section 184 (1) of the Insurance Act no. 5 of 2010, which mandates that until the accumulated surplus and reserves of the company equates or exceeds the liability for unearned premiums, an amount of at least 25 % of annual profits must be appropriated to this special reserve. As disclosed in note 18, the liabilities for unearned premiums have been fully provided for in these financial statements and currently stands at $ 1,458,580. In addition as defined in section 184 (2), the accumulated surplus and reserves currently stands at $ 5,418,599 at the date of the Statement of Financial Position.

22.

COMMISSIONS Property & Casualty - â&#x20AC;&#x153;P&Câ&#x20AC;? Notes Commissions Paid Commissions Received Commissions Paid (Net)

23.

3 (f)

DEC 2015

DEC 2014

Life/Health DEC 2015

DEC 2014

507,355

604,699

425,232

483,259

(518,015)

(503,054)

(10,660)

101,645

425,232

483,259

CLAIMS DEC 2015

DEC 2014

Property & Casualty Claims Paid Motor

944,623

1,113,661

Property (including Fire)

131,681

215,859

Burglary

Marine

19,880

Liability

45,310

1,121,614

184,617

1,534,017

Claims Recovered: Property Liability Motor

(27,423)

(30,384)

(79,614)

(181,195)

(208,618)

(165,913)

(275,911)

Claims Recoveries: Opening Provision- Motor (Jan. 2015/Nov. 13) Closing Provision- Motor (Dec. 2015/14)

897,189 (856,156)

1,026,348 41,033

(897,189)

129,159

Claims Outstanding Provision Opening Claims Payable- Motor (Jan. 2015/Nov.13) Closing Claims Payable- Motor (Dec. 2015/14) Net Claims Paid

(422,744) 345,597

(508,771) (77,147) 876,882

The 2014 Financial information is based on a reporting period of fourteen (14) months

422,744

(86,027) 1,301,238

NEWIM Annual Report 2015

Notes to the Financial Statements for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

WRA & Co.

23. CLAIMS (Continued...) Claims on Property and Casualty contracts are recognized when they are reported to the Company. Claims that remain unpaid at the end of the reporting period are accounted for as Insurance Liabilities (note 18). This provision is derived from best estimates and information obtained from loss adjusters, medical reports and legal counsel. Life & Health DEC 2015

DEC 2014

Benefits and Claims Paid Health Claims Paid: Medical Care

65,375

40,069

Dental

19,720

26,559

Optical/Vision

12,974

9,879

5,100

2,445

Maternity Major Medical

70,812

173,981

89,494

168,446

14,927

79,291

(11,097)

(8,166)

Death Benefit Paid: Creditors Life Claims Recovered Reinsurance Share of Loss - Dental Benefit Reinsurance Share of Loss -Death Benefit Reinsurance Assets: Recoverable from Reinsurers -Major Medical Liabilities- Claims Payable Claims Provision Outstanding (Jan. 2015/Nov. 13) Claims Outstanding Provision (Dec.2015/14) Claims Paid (Net)

(59,696) 56,700

(107,593) (2,996) 174,815

59,696

(47,897) 191,674

As part of its overall risk management mechanism, the Company procures various reinsurance arrangements. These agreements allow a certain level of risk to be ceded (relinquished) to the reinsurer. However, the presence of the reinsurance treaties does not absolve the company from its liabilities. Therefore, significant losses may be experienced where claims are not honoured by the reinsurer. Reinsurance Assets represents amounts recoverable from the reinsurers and are acknowledged when the Company is virtually certain that the reinsured portion of the loss would be recouped.

The 2014 Financial information is based on a reporting period of fourteen (14) months

NEWIM Annual Report 2015

Notes to the Financial Statements

WRA & Co.

for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

24.

BUSINESS SEGMENTS The following are the main business segments. All other segments are deemed insignificant to the Companyâ&#x20AC;&#x2122;s operation.

Business segment for the year ended December 31, 2015

Property & Casualty

Ordinary & Group Life

Individual & Group Health

Total

INCOME Gross Premium Income Premium Refunds

6,243,019

1,171,487

352,506

7,767,012

(88,695)

6,154,324

1,171,487

352,506

7,678,317

(2,541,470)

(271,690)

(107,152)

(2,920,312)

(58,317)

(19,217)

(5,783)

(83,317)

Net Premium Income

3,554,537

880,580

239,571

4,674,688

Less Direct Expenses

(932,794)

(441,730)

(383,420)

(1,757,944)

(45,995)

(12,514)

(58,509)

175,931

2,797,674

392,855

(156,363)

3,034,166

Interest Income

86,759

17,396

4,733

108,888

Other Income

47,155

2,931,588

410,251

(151,630)

3,190,209

(2,278,011)

(358,141)

(97,436)

(2,733,588)

(124,147)

(18,146)

(4,937)

(147,230)

Gross Premiums Written Reinsurance Premiums ceded Insurance Levy

(Increase)/Decrease Actuarial Liability (Increase)/Decrease Unexp. Premium Underwriting Income (Loss)

OTHER EXPENSES Less: General & Admin. Expenses Depreciation Net fair value (gain)/loss on financial assets through profit & loss Finance Cost NET INCOME (LOSS) BEFORE TAX Deduct Provision for Income Tax Net Income after Taxation Less: Transfer to Statutory Reserve Net Income for the year after appropriation

(2,675)

(162,994)

(4,543)

(1,236)

(168,773)

363,761

29,421

(255,239)

137,943

(8,717)

355,044

29,421

(255,239)

129,266

355,044

29,421

(255,239)

129,266

The 2014 Financial information is based on a reporting period of fourteen (14) months

NEWIM Annual Report 2015

Notes to the Financial Statements

WRA & Co.

for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

24.

BUSINESS SEGMENTS (continued...) Business segment for the year ended December 31, 2014

Property & Casualty

Credit Life

7,315,782

482,636

Ordinary & Group Life

RRIA

Individual & Group Health

Total

INCOME Gross Premium Income Premium Refunds

17,358

974,983

283,044

9,073,803

(84,343)

7,231,439

482,636

17,358

974,983

283,044

8,989,460

(3,084,808)

(110,640)

(17,149)

(265,771)

(95,092)

(3,573,460)

(60,351)

(6,863)

(247)

(13,865)

(4,025)

(85,351)

Net Premium Income

4,086,280

365,133

(38)

695,347

183,927

5,330,649

Less Direct Expenses

(1,483,905)

(181,487)

(570,848)

(210,667)

(2,446,907)

795,161

80,192

(453,899)

(2,785)

418,669

(168,147)

2,434,228

978,807

80,154

(329,400)

(29,525)

3,134,264

133,848

9,554

18,192

4,812

166,406

3,288

3,291

2,571,364

988,361

80,154

(311,205)

(24,713)

3,303,961

(2,290,061)

(193,816)

(20)

(369,055)

(97,630)

(2,950,582)

(80,505)

(4,817)

(9,172)

(2,427)

(96,921)

27,527

(168,077)

(1,413)

(2,689)

(713)

(172,892)

60,248

788,315

80,134

(692,121)

(125,483)

111,093

60,248

788,315

80,134

(692,121)

(125,483)

111,093

60,248

788,315

80,134

(692,121)

(125,483)

111,093

Gross Premiums Written Reinsurance Premiums ceded Insurance Levy

(Increase)/Decrease Actuarial Liability (Increase)/Decrease Unexp. Premium Underwriting Income (Loss) Interest Income Other Income OTHER EXPENSES Less: General & Admin. Expenses Depreciation Net fair value (gain)/loss on financial assets through profit & loss Finance Cost NET INCOME (LOSS) BEFORE TAX Deduct Provision for Income Tax Net Income after Taxation Less: Transfer to Statutory Reserve Net Income for the year after appropriation

Direct expenses comprise of Commissions and claims expense for Property and Casualty business. It extends to medical fees and Stamp duty (Policy Contract) for the Long term (Life) and Health segment.

The 2014 Financial information is based on a reporting period of fourteen (14) months

NEWIM Annual Report 2015

Notes to the Financial Statements

WRA & Co.

for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

25.

PRIOR YEAR ADJUSTMENT Total DEC 2015 (6,443)

(9,538)

(Over)/Understatement of Commissions paid in 2015/2014

(8,493)

Over/(Understatement) of Accounts Receivable 2015/2014

39,110

31,507

(Over)/Understatement in due to policyholders

(2,168)

(Over)/Understatement of Commissions Payable

(2,621)

Over/(Understatement) of Rent Deposit 2015/2014

(1,000)

Over/(Understatement) in Life (Long Term) Income in 2015/2014

Over/(Understatement) of Legal Fees 2015/2014 TOTAL

26.

Total DEC 2014

6,866

39,533

7,687

GENERAL AND ADMINISTRATIVE EXPENSES P&C DEC 2015

P&C DEC 2014

Life/Health DEC 2015

Life/Health DEC 2014

Total DEC 2015

Total DEC 2014

98,535

120,743

7,147

1,900

105,682

122,643

175,453

87,938

175,453

87,938

Entertainment

36,719

43,920

212

36,719

44,132

Insurance

17,157

11,352

17,157

11,352

Motor Vehicle

27,800

53,487

27,800

53,487

119,111

136,686

17,741

26,609

136,852

163,295

Travel & Accommodation

91,595

86,304

8,314

350

99,909

86,654

Rates & Licences

21,077

20,423

20,500

20,000

41,577

40,423

Repairs & Maintenance

22,084

34,778

4,384

4,018

26,468

38,796

Annual Stamp Tax

46,892

36,633

11,596

8,828

58,488

45,461

Donation, Sponsorship & Subscription

25,283

25,261

750

25,283

26,011

Miscellaneous

13,552

1,892

13,552

1,892

Penalties & Interest Paid

15,587

25,678

(641)

15,587

25,037

Electronic Data Processing (EDP)

78,881

32,160

835

79,716

32,160

8,703

2,211

8,703

2,211

5,912

804,341

719,466

70,517

62,026

874,858

781,492

54,494

93,094

6,761

10,698

61,255

103,792

Telephone, Fax & Internet

131,759

171,876

450

131,759

172,326

Rent & Occupancy

190,600

233,800

60,000

84,000

250,600

317,800

TOTAL

376,853

498,770

66,761

95,148

443,614

593,918

Advertising, Marketing & Promotion Bad Debts

Printing, Stationery & Office Supplies

Security & Protection Annuity Payments Collection Agent Fees TOTAL Utilities & Amenities Electricity (Power)

The 2014 Financial information is based on a reporting period of fourteen (14) months

NEWIM Annual Report 2015

Notes to the Financial Statements

WRA & Co.

for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

26.

GENERAL AND ADMINISTRATIVE EXPENSES (continued...) P&C DEC 2015

P&C DEC 2014

Life/Health DEC 2015

Life/Health DEC 2014

Total DEC 2015

Total DEC 2014

Staff (Human Capital) 15,042

15,689

14,013

14,050

29,055

29,739

909,003

924,609

202,952

273,512

1,111,955

1,198,121

1,000

Training & Staff Development

15,411

25,894

4,051

10,318

19,462

36,212

National Insurance Contributions

30,982

30,504

25,840

29,224

56,822

59,728

971,438

997,696

246,856

327,104

1,218,294

1,324,800

15,000

7,000

22,000

Underwriting Consultation

12,066

56,177

12,066

56,177

Actuarial Fees

51,432

112,241

51,432

112,241

Legal Fees

25,089

5,130

25,089

5,130

Other Fees

28,416

1,325

825

28,416

2,150

TOTAL

68,505

21,455

70,498

176,243

139,003

197,698

Director Fees, Expenses & Emoluments

56,874

52,674

945

57,819

52,674

TOTAL

56,874

52,674

945

57,819

52,674

2,278,011

2,290,061

455,577

660,521

2,733,588

2,950,582

Loan Interest

97,269

112,364

97,269

112,364

Overdraft interest

42,634

40,358

42,634

40,358

Bank charges

23,091

15,355

5,779

4,815

28,870

20,170

162,994

168,077

5,779

4,815

168,773

172,892

Group Health Insurance Salaries, Wages & Stipend Work Permit

TOTAL Professional Fees Audit & Accounting Fees

Directors

GRAND TOTAL

27.

FINANCE COST

TOTAL

28.

INCOME TAX EXPENSE DEC 2015

DEC 2014

Current taxes on income for the reporting period

8,717

Income tax Expense

8,717

The 2014 Financial information is based on a reporting period of fourteen (14) months

NEWIM Annual Report 2015

Notes to the Financial Statements

WRA & Co.

for the year ended December 31, 2015 Expressed in Eastern Caribbean (EC) Dollars (continued...)

28.

INCOME TAX EXPENSE (continued...) Tax on the Companyâ&#x20AC;&#x2122;s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profile of the Company as follows: DEC 2015

DEC 2014

137,943

111,093

8,717

33,328

- Income not subject to tax

(33,328)

- Capital allowances on property, plant and equipment

- Tax losses for which no deferred income tax asset was recognised

8,717

Profit before income tax Tax calculated on profit before income tax- 30% Effects of:

Total

The weighted average applicable tax rate was 30% (2013 : 30%)

The 2014 Financial information is based on a reporting period of fourteen (14) months

NEWIM Annual Report 2015

Notes

NEWIM Annual Report 2015

Notes

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