United Cooperative Insurance Company: Detailed Financial and Operational

United Cooperative Insurance Company was established as a Saudi joint-stock company specializing in providing cooperative insurance services, also known as Takaful, within a regulatory framework supervised by the Capital Market Authority and the Saudi Arabian Monetary Authority (SAMA). The company is distinguished by offering a diverse range of insurance products, including car insurance, cooperative health insurance, property insurance, and liability insurance. United Cooperative Insurance Company adheres to Islamic principles through the concept of solidarity among participants, where surplus insurance is distributed according to approved regulations. The company's headquarters is located in the Kingdom of Saudi Arabia, and it complies with all disclosure and governance requirements imposed by regulatory authorities. United Cooperative Insurance Company is keen to keep pace with developments in the insurance sector and works to enhance its position among competing companies by developing products that align with the changing needs of the Saudi market.

The insurance sector is one of the vital sectors in the Saudi economy, especially after the listing of several insurance companies in the Saudi financial market (Tadawul). The sector has witnessed significant growth driven by the Kingdom's Vision 2030, which aims to increase the private sector's contribution and improve the regulatory environment for financial activities. Cooperative insurance, which represents the core system of United Cooperative Insurance Company, relies on distributing risks among participants and sharing surplus, aligning with Islamic values and local community requirements. In recent years, the Saudi Arabian Monetary Authority and the Capital Market Authority have imposed stringent capital and regulatory requirements to ensure the sustainability of insurance companies and protect the rights of investors and clients. Despite the growth environment, the sector faces challenges such as market saturation, intense competition, and rising insurance claims, which directly affect the performance of companies like United Cooperative Insurance Company.

The announced financial data for United Cooperative Insurance Company during 2024 and 2025 indicate ongoing operational and financial challenges. The stock price at the end of 2024 was approximately 5.28 Saudi Riyals, which is relatively low compared to some competing companies. The company's market capitalization is estimated in the hundreds of millions of Saudi Riyals, based on the number of outstanding shares and the stock price. Regarding profitability, quarterly reports show continued net losses, with the company recording an operational deficit in the third and fourth quarters of 2024. The company did not announce any cash distributions during that period, leaving the cash distribution yield at zero. Revenue growth has stagnated or slightly declined due to decreased insurance premiums and increased claims and costs. These indicators reflect a financial situation that requires restructuring and strategic reforms to ensure sustainability.

One of the key aspects of interest for those monitoring the performance of United Cooperative Insurance Company is the analysis of profitability and revenues. During 2024, the company did not achieve profit growth but continued to record operational losses. This is attributed to several factors, primarily the decline in revenues from insurance premiums and the high claims ratio paid to participants. Additionally, the increase in general and administrative expenses has reduced the operating margin. Under these circumstances, the company's price-to-earnings (P/E) ratio remained undefined or negative, reflecting a lack of positive earnings. Reports indicate that the company is focusing on controlling expenses and improving claims management processes, but it is evident that price competition and regulatory pressures directly impact its ability to generate sustainable profits.

The stock of United Cooperative Insurance Company experienced notable fluctuations during 2024 and 2025, stabilizing at relatively low levels compared to previous periods and other insurance companies. The stock price at the end of 2024 was approximately 5.28 Saudi Riyals, which reflected on the company's overall market capitalization. These levels indicate a state of negative stability resulting from modest financial performance and continued losses. It is worth noting that stock prices in insurance companies are often influenced by claims rates, underwriting results, and regulatory changes, in addition to investor sentiment in the Saudi financial market. Despite not distributing dividends in recent years, investors are closely monitoring any developments that may affect market capitalization, such as plans for capital increases or corporate restructuring.

United Cooperative Insurance Company faces strong competition from several cooperative and traditional insurance companies in the Saudi market, such as Walaa Insurance Company, Gulf Union Cooperative Insurance, and Medgulf Insurance, in addition to specialized health insurance companies like Bupa Arabia. Competition in this sector is characterized by a high number of companies and product diversity, leading to price pressures and difficulties in maintaining market share. Competing companies rely on product innovation, service improvement, and expanding distribution channels to enhance their positions. For United Cooperative Insurance Company, this reality poses a challenge that requires improving its offerings, focusing on specialized sectors, and developing risk management capabilities, especially as regulatory authorities seek to enhance operational efficiency and governance.

United Cooperative Insurance Company faces a range of challenges impacting its performance and sustainability. Among the most significant challenges are: ongoing intense competition from larger and better-funded companies, relative saturation in certain insurance sectors such as vehicles, and rising insurance claim costs. Additionally, stringent solvency requirements impose pressures on capital, especially in light of accumulated losses. The company also needs to improve its operational processes and reduce general expenses while adhering to governance and disclosure standards imposed by the Capital Market Authority and SAMA. All these factors place the company in a position where financial and strategic restructuring is necessary, possibly considering options such as capital increases or entering into new partnerships.

The insurance sector in Saudi Arabia is subject to joint supervision by the Saudi Arabian Monetary Authority (SAMA) and the Capital Market Authority, focusing on enhancing transparency, operational efficiency, and financial solvency of companies. United Cooperative Insurance Company is committed to providing detailed quarterly and annual financial reports and complying with strict disclosure requirements. The regulatory framework also includes governance requirements, such as separating executive management from the board of directors and forming independent internal audit committees. In recent years, regulatory authorities have emphasized the importance of raising capital and reserves to address risks and improve the protection of policyholders' and shareholders' rights. These requirements compel the company to continuously improve its financial and administrative performance to maintain its license and position in the market.

In 2024 and 2025, several significant developments emerged in the journey of United Cooperative Insurance Company. The company was included in the list of companies with high accumulated losses, prompting the board of directors to consider options such as capital increases and restructuring operational processes. The company held general assembly meetings to discuss plans to reform its financial situation in response to the requirements of the Capital Market Authority. The company did not announce any new products or substantial expansions in recent times but focused its efforts on improving operational efficiency and reducing costs. Meanwhile, regulatory authorities continued to monitor solvency indicators, imposing timelines on companies that do not comply with capital requirements. These developments reflect a dynamic environment that requires flexibility and rapid strategic responses from the company's management.

United Cooperative Insurance Company contributes to achieving the objectives of the Kingdom's Vision 2030 by enhancing financial inclusion, protecting individuals and properties, and providing insurance solutions compliant with Sharia. The insurance sector is one of the pillars supporting the Saudi economy, providing financial stability for individuals and businesses and contributing to reducing risks in commercial and investment activities. The company is committed to offering products that meet the needs of diverse segments of society, focusing on vital sectors such as health insurance and vehicle insurance. With ongoing regulatory reforms, the company is expected to play a larger role in empowering the private sector, supporting small and medium enterprises, and enhancing insurance culture among citizens and residents.

United Cooperative Insurance Company seeks to face current challenges through several strategies, including improving risk management, developing insurance products, and adopting digital transformation in services. The company focuses on controlling expenses, improving underwriting processes, and enhancing operational efficiency to ensure business sustainability. The company is also exploring options for strategic alliances or capital increases in response to SAMA and Capital Market Authority requirements. The management aims to enhance service quality and increase customer satisfaction while fully complying with transparency and disclosure standards. The company relies on its ability to adapt to regulatory changes and meet the evolving market needs to achieve stability and long-term growth.

When comparing United Cooperative Insurance Company with its key competitors such as Walaa Insurance, Medgulf, and Gulf Union, significant differences in financial performance, market share, and product growth become evident. Some competing companies feature greater financial capabilities and broader product diversification, in addition to investments in modern technologies and customer service. In contrast, United Cooperative Insurance Company focuses on specific sectors and faces challenges in maximizing profitability. The company's ability to compete in the future will depend on its success in developing innovative products, improving its distribution network, and increasing the efficiency of risk management compared to its peers in the sector. This reality requires the company to enhance its flexibility and make well-considered strategic decisions to maintain its market share.

The insurance sector in Saudi Arabia is expected to witness significant transformations in the coming years, driven by technological advancements, tightening regulatory requirements, and increased community awareness of the importance of insurance. Regulatory authorities are putting plans in place to enhance market efficiency, regulate competition, and stimulate innovation in products and services. For United Cooperative Insurance Company, its ability to continue and grow will depend on its success in improving its financial performance, enhancing capital, and responding swiftly to SAMA and Capital Market Authority requirements. Additionally, developing partnerships and strategic alliances, and adopting digital insurance solutions can contribute to improving the company's competitive position. However, the sector remains susceptible to economic and regulatory fluctuations that necessitate periodic reviews and continuous updates of strategies.