Al-Jazira Takaful: Comprehensive Analysis of Financial and Market Performance

Al-Jazira Takaful Cooperative is a licensed Saudi joint-stock company operating in the field of Islamic cooperative insurance, established under Cabinet Decision No. (137) of 2010. The company operates within the framework of Islamic Sharia, managing its operations based on the concept of Takaful, which relies on cooperation among participants to collectively cover risks. Al-Jazira Takaful is listed on the Saudi financial market (Tadawul) under the symbol 8012 and benefits from the support of Al-Jazira Bank Group, enhancing its brand strength and customer base. The company offers services across various insurance fields: vehicles, health, life, property, and more, adhering to the regulations of the Saudi Arabian Monetary Authority (SAMA) and the Sharia authority. The company derives its position from combining transparency and credibility, investing in technology to develop digital insurance services, making it an important player in the Saudi financial sector.

The ownership structure of Al-Jazira Takaful reflects its close ties with Al-Jazira Bank Group, providing the company with financial stability and institutional support. The board of directors includes banking professionals and insurance experts, with the chairman and vice-chairman representing the top executive leadership. The company has seen changes in senior positions during 2025 to enhance strategic directions. The company relies on subcommittees for governance, such as the newly formed internal audit committee, and risk management and compliance committees, to ensure compliance with regulatory standards and enhance transparency in operational processes. Management is keen on updating internal systems and adopting global governance standards, aligning with the requirements of the Saudi Capital Market Authority and enhancing investor and customer confidence.

Al-Jazira Takaful offers a diverse range of products including vehicle insurance (mandatory and comprehensive), health insurance for individuals and companies, property insurance, personal accident insurance, life insurance, and engineering and professional liability insurance. All products comply with Sharia regulations, with surplus insurance distributed among participants according to Takaful mechanisms. The company also provides modern digital solutions such as electronic document issuance portals and mobile applications for managing claims and tracking policies. The company focuses on meeting the needs of individuals and small and medium-sized enterprises, developing tailored products for the transportation, shipping, and contracting sectors, supported by marketing campaigns to enhance outreach and acquire new customers.

According to data from the Saudi stock market (Tadawul), the last closing price of Al-Jazira Takaful stock was SAR 12.13, with a market value of approximately SAR 801 million. The price-to-book (P/B) ratio stands at around 0.8, indicating that the stock is trading below its book value, while the price-to-earnings (P/E) ratio is about 16.5 times based on recent earnings. The company recorded operational revenues of approximately SAR 350 million and a net profit of SAR 40 million in the fourth quarter of 2024, with an annual revenue growth of nearly 10% and profits around 15%. The cash distribution yield is approximately 3% annually, noting that these indicators may change based on quarterly results, and it is essential to refer to periodic official data for accuracy.

The Saudi insurance sector is regulated by the Saudi Arabian Monetary Authority (SAMA) and has witnessed significant annual growth driven by increased demand for health and vehicle insurance. Sector growth relies on factors such as population expansion, regulatory mandates for insurance, and the evolution of digital services. Companies apply IFRS 17 and IFRS 9 standards, which have affected revenue and cost recognition methods, enhancing sector transparency. Despite intense competition among major companies, Takaful companies like Al-Jazira Takaful are capable of achieving reasonable profit margins due to their cooperative model and low monopoly ratios. Official reports indicate that the volume of written insurance premiums in Saudi Arabia is increasing annually, supporting the sustainability of the sector.

Al-Jazira Takaful competes with prominent companies such as Cooperative Insurance, Bupa Arabia, Walaa Insurance, Malath Insurance, and Medgulf. These companies vary in market share, capital, and service distribution. While companies like Cooperative and Bupa lead the health and vehicle insurance markets, Al-Jazira Takaful focuses on Islamic Takaful and benefits from the support of Al-Jazira Bank and its customer base. The company offers flexibility in products and targets specialized sectors, but it remains smaller in size compared to some larger competitors. Competition compels Al-Jazira Takaful to invest in modern technologies and develop digital distribution channels to maintain its competitive edge.

Al-Jazira Takaful's performance is influenced by several factors: First, local and global economic changes (such as fluctuations in oil prices) affect the volume of insurance premiums. Second, SAMA regulations and international accounting standards influence revenue recognition methods. Third, intense competition in the sector requires continuous product development and service improvement. Fourth, accident rates and insurance claims impact profit margins. Fifth, technological changes and digital transformation compel the company to invest in digital infrastructure. Additionally, management and governance quality play a pivotal role in achieving sustainability and reducing operational risks.

Al-Jazira Takaful witnessed several significant developments during 2024 and 2025: the appointment of a new chairman and executive vice-chairman, the formation of an internal audit committee to regulate financial policies, and the release of the first half of 2025 results, which showed continued operational growth. The company also held its extraordinary general assembly to review and approve the budget and distributions, and launched technical development initiatives for digital transformation, such as adopting Telematics solutions and improving electronic document issuance portals. These actions reflect management's commitment to regulatory compliance and enhancing transparency and operational quality.

Al-Jazira Takaful follows a moderate dividend distribution policy, with the annual percentage determined by the general assembly based on financial results. In recent years, distributions have ranged between 2% to 4% of capital, with an annual yield of approximately 3% based on the stock price. The distribution policy relies on achieving net profits and maintaining necessary reserves, reflecting the company's commitment to enhancing shareholder returns while maintaining a strong financial position. It is essential to monitor the company's official announcements for accurate information on annual distribution percentages.

Al-Jazira Takaful places significant importance on technology and digital transformation, working on developing electronic portals for issuing insurance documents and managing claims, and adopting Telematics solutions in vehicle insurance to improve risk management. Digital transformation enables the company to enhance customer experience, accelerate processes, and reduce operational costs. The company also seeks to build partnerships with technology service providers to enhance its innovation capabilities and keep pace with changing market demands.

The strengths of Al-Jazira Takaful include the support of Al-Jazira Bank Group, strict adherence to Sharia standards, product diversity, and rapid digital transformation. Weaknesses include the company's medium size compared to market leaders, reliance on the Saudi market without geographical diversification, and profit sensitivity to fluctuations in insurance claims or sudden economic changes. The company is keen to address weaknesses by developing products, investing in technology, and enhancing risk management efficiency.

Al-Jazira Takaful's performance can be monitored through official sources such as the Tadawul website (www.saudiexchange.sa), which provides real-time data and quarterly reports, company announcements regarding administrative and financial developments, reports from the Capital Market Authority, and the company's official website if available. It is advisable to track stock indicators (P/E, P/B, dividends), quarterly financial statements, and news in the insurance sector to understand regulatory and economic changes impacting performance. Credit rating agency evaluations, if available, should also be monitored, along with analyses from economic press.

Investments in stocks, especially in the insurance sector, are subject to various factors including market risks, regulatory changes, and economic fluctuations. Therefore, it is essential for any investor or interested party in the Takaful insurance sector or Al-Jazira Takaful stock to consult a licensed financial advisor before making any financial or investment decisions. This allows investors to assess the suitability of investments with their financial goals and understand the inherent risks in the sector. Additionally, it is important to ensure that the latest official data and financial reports are followed to form an accurate picture of the company's performance.