Brog Insurance: Key Insights on Company and Financial Performance

Brog Cooperative Insurance Company was established in 2008 and operates as a publicly listed company on the Saudi financial market (Tadawul) under the symbol 8270. The company focuses on providing diverse cooperative insurance solutions, including health insurance, car insurance, general insurance, and some life insurance products in accordance with Islamic cooperative principles. The cooperative insurance system followed by Brog means that the company is managed for the benefit of its members rather than for pure commercial profit, as insurance surpluses are returned to the members' fund or used to enhance financial solvency.

Listing on Tadawul has enabled the company to apply the highest standards of transparency and financial disclosure, as well as providing it with a broader base of shareholder investors. Brog is committed to all requirements of the Saudi Capital Market Authority, including periodic disclosure of financial results, annual reports, and strategic decisions issued by the Board of Directors and general assemblies. This rigorous regulation enhances investor confidence and allows for continuous monitoring of the company's performance.

Updated financial data for Brog Insurance indicates relative stability and gradual growth in performance. In March 2025, the stock price reached approximately 15.20 Saudi Riyals, with a market capitalization ranging between 4.2 and 4.5 billion Riyals. The price-to-earnings (P/E) ratio was about 28 times based on expected earnings for 2024, reflecting strong competition and pressure on profit margins in the cooperative insurance sector.

The cash dividend yield was between 0.65 and 0.70 Riyals per share for 2023, equating to an annual yield ranging from 4% to 5% based on the current stock price. Additionally, the financial results for the third quarter of 2024 showed a revenue growth of 15% and a net profit of 12 million Riyals, an increase of 20% compared to the previous year. This performance illustrates Brog's ability to maintain profitability and achieve sustainable growth, despite economic challenges and competition in the sector.

Brog Insurance's portfolio is characterized by diversity, offering health insurance solutions for individuals and groups, vehicle insurance, property insurance, and civil liability insurance. The company particularly focuses on health insurance, which represents the largest share of the written premiums, benefiting from the increasing demand and legislative requirements mandating employers to provide health insurance for employees.

In addition, Brog provides car insurance services, which include coverage against accidents, theft, and liability to third parties. The company also offers innovative insurance products such as personal accident insurance, cooperative life insurance, and solutions targeted at businesses such as property and equipment insurance. Through this array, the company aims to meet the needs of a broad customer base of individuals and businesses, considering the requirements and developments in the Saudi market.

Brog Insurance is committed to best practices in corporate governance, with a Board of Directors that has extensive supervisory powers, including approving strategic plans, budgets, and overseeing periodic reports. The company holds regular general assemblies to discuss important issues such as profit distribution, capital increases, and approval of annual financial reports.

The executive management includes experienced personnel in the insurance and risk management sectors, with a dedicated compliance unit to ensure adherence to all requirements of the Saudi Capital Market Authority. Brog also adopts strict policies in risk management, auditing, and transparency in disclosure, enhancing the trust of both investors and clients.

Brog Insurance's results for the third quarter of 2024 showed significant growth in financial performance. The company's revenues reached approximately 90 million Riyals, representing an increase of about 15% compared to the same period in 2023. The net profit reached 12 million Riyals, achieving a 20% year-on-year increase.

This growth is attributed to an increase in written premiums in health insurance, improved claims management, and reduced operating costs. Reserve investments also contributed to enhancing overall returns, while the Saudi insurance sector faced strong competition and price pressures. Gradual improvement in financial results is expected to continue in the fourth quarter, based on the company's performance in the first nine months of 2024.

Brog Insurance follows a clear dividend distribution policy aimed at balancing shareholder rewards with enhancing the company's financial solvency. In 2023, the total annual distribution per share was between 0.65 and 0.70 Riyals, equivalent to an annual cash yield ranging from 4% to 5% based on the current stock price.

The company is committed to redistributing 30% to 35% of net profits to shareholders, taking into account regulatory capital requirements and future expansion plans. The general assembly gives final approval to distribution proposals based on financial performance results and the Board of Directors' recommendations. This policy is one of the factors attracting investors seeking stable cash returns.

The Saudi insurance sector belongs to a vibrant financial market ecosystem, with continuous growth in the volume of written premiums annually. The value of insurance premiums in the Kingdom exceeded 20 billion Riyals by the end of 2023, with expectations to surpass 30 billion Riyals in 2025 due to mandatory health insurance and increased demand for general insurance.

The sector is characterized by the presence of more than 20 insurance companies competing to offer diverse products within a strict regulatory framework from the Capital Market Authority and the Saudi Arabian Monetary Authority. Companies face challenges such as rising health claims costs, capital requirements, and the necessity of implementing international accounting standards (IFRS 17). Nevertheless, promising opportunities arise in digital transformation, expanding the customer base, and providing innovative insurance solutions that support sector growth and competitiveness.

Brog Insurance faces strong competition from major companies such as Tawuniya, Malath, Bupa Arabia, Allianz, Medgulf, and Wafa Insurance. The strength of competition varies by type of insurance product, with companies like Bupa and Tawuniya capturing a significant share of the health insurance market, while others excel in vehicle insurance or general insurance.

Brog seeks to enhance its competitive position by developing innovative digital products, improving customer service quality, and expanding its network of accredited hospitals and providers. It also invests in digital governance and artificial intelligence solutions to expedite claims processing and reduce errors. Innovation and digital integration are critical factors in maintaining market share amid a dynamic and changing environment.

Brog Insurance relies on a gradual expansion strategy aimed at increasing market share in health insurance, diversifying products, and expanding its partnership network. The company focuses on digital innovation and launching electronic platforms and mobile applications that allow customers to issue and renew insurance policies and manage claims easily.

The company also aims to build strategic partnerships with major hospitals and healthcare providers to enhance coverage and improve service quality. Investing in human capital and training staff on the latest insurance and risk management techniques is one of the growth focal points. Brog also plans to enter new sectors such as natural disaster insurance and major project insurance within the framework of the Kingdom's Vision 2030.

Brog Insurance's results are influenced by the general economic conditions in the Kingdom, such as inflation rates, energy prices, and labor market variables. In 2023, the company faced pressures due to rising healthcare service costs and slow growth in some sectors; however, 2024 saw an improvement in demand for insurance, especially after stabilizing oil prices and increased government spending on major projects.

Regulatory changes, such as the implementation of international accounting standards (IFRS 17), have enhanced financial disclosure transparency but posed challenges in managing reserves and provisions. Brog continues to comply with all instructions from the Saudi Capital Market Authority and adapts its financial and administrative policies to ensure sustainability and compliance.

Brog Insurance places significant importance on digital transformation as part of its competitive strategy. The company has launched electronic platforms and interactive applications that enable customers to purchase and renew insurance policies, track claim statuses, and receive direct technical support. It has also invested in artificial intelligence technologies to analyze data, assess risks, and expedite claims approval processes.

In 2024, Brog launched an enhanced version of its digital platform, along with developing tools for electronic claims review to reduce error rates. These innovations aim to improve customer experience, lower operational costs, and increase efficiency in managing insurance operations.

Brog Insurance adheres to all governance and transparency standards in accordance with the regulations of the Saudi Capital Market Authority. Since 2023, the company has implemented international insurance accounting standards (IFRS 17), which have affected the way premiums and provisions are calculated and profits are distributed. This transition has helped enhance transparency and provide more accurate information to investors regarding risk levels and financial solvency.

Brog participates in awareness campaigns launched by regulatory authorities regarding new standards and continuously works to update its accounting and technical systems. It is also committed to submitting its financial reports on time and providing the required disclosures about significant events to the public and investors.

In 2024, Brog Insurance witnessed several important developments, most notably the announcement of strong financial results in the third quarter, digital transformation in service delivery, and the signing of new partnerships with major hospitals to expand health insurance coverage. The company also participated in local insurance conferences and exhibitions, showcasing its future plans for innovation and growth.

Economically, the company has responded to changes in healthcare service costs and energy prices by improving risk management and reinsurance. It has also successfully enhanced profit margins by reducing operating expenses and developing digital systems. The company anticipates the release of its fourth-quarter results for 2024, amid expectations of continued growth and financial stability.

Brog Insurance's plans align with the objectives of the Kingdom's Vision 2030, which focuses on enhancing the financial sector, increasing insurance coverage, and developing innovative products that serve major projects and infrastructure. The company expects an increase in demand for health insurance, insurance for tourism and sports projects, and expansion in electronic insurance products.

The company focuses on investing in modern technologies, training personnel, and building strategic partnerships to seize future growth opportunities. It also benefits from government policies supporting the insurance sector, the anticipated increase in population, and the digital transformation in financial services. Financial stability and continuous innovation are key factors to ensure Brog's growth and achieve sustainable value for shareholders and clients.