Al-Jazira Takaful: Comprehensive Analysis of Company Performance

Al-Jazira Takaful Cooperative Company operates within the framework of cooperative insurance, a type of Islamic insurance based on the principle of mutual assistance and cooperation among participants. The company's activity involves collecting insurance premiums from clients into a common fund, from which compensations are paid to beneficiaries in the event of covered risks, in a manner that adheres to Sharia principles and avoids usury and prohibited practices. The company was established with the support of Al-Jazira Bank and local partners, providing it with a solid capital base and banking expertise, facilitating the marketing of its products through the bank's extensive network.

Al-Jazira Takaful is subject to the supervision of the Capital Market Authority (CMA) and relevant regulatory bodies, complying with all laws and regulations related to cooperative insurance in the Kingdom. Its market position is reflected in its listing on the insurance sector index on Tadawul under the symbol (8012), where all its operations and announcements are monitored periodically. Its presence on the list of listed companies indicates its commitment to transparency and financial disclosure, enhancing the confidence of both investors and clients.

The company offers a diverse range of insurance products, including cooperative health insurance for individuals and businesses, vehicle insurance against accidents and theft, property insurance, as well as liability insurance and work-related accidents. It benefits from Al-Jazira Bank's network to reach a wide range of clients, alongside developing modern digital channels to serve participants. The company also commits, through its Sharia board, to ensure that all its activities align with Islamic values, making it a preferred choice for a diverse segment of the Saudi community seeking Sharia-compliant insurance services.

Al-Jazira Takaful witnessed significant financial developments in 2024 and 2025, reflecting the company's resilience in an increasingly competitive insurance market. According to aggregated data from the Saudi financial market and financial analysis platforms, the price of Al-Jazira Takaful's share in the second half of 2025 ranged from approximately 12.0 to 12.5 Saudi Riyals, indicating a relative stability compared to some previous periods of volatility. This price stability is linked to balanced growth in the company's insurance portfolio and achieving moderate operating profits despite challenges.

In terms of market capitalization, assuming the company has around 200 million shares (with a par value of 10 Riyals), the total market capitalization approaches 2.4 billion Saudi Riyals, placing the company within the mid-tier segment of insurance companies in the Kingdom. As for the price-to-earnings (P/E) ratio, although recent official data is unavailable, similar companies in the sector typically trade at a P/E ratio ranging from 15 to 25 times, suggesting that Al-Jazira Takaful's P/E ratio falls within this range. This indicator is crucial in assessing the stock's attractiveness from a long-term investment perspective.

Regarding cash distributions, Al-Jazira Takaful had not announced any dividends for shareholders by mid-2025, a common trend among insurance companies aiming to bolster their financial capacity by reinvesting profits into reserves and supporting future expansion. Quarterly reports reveal that the company experienced modest growth in written premiums, with a relative control over administrative expenses and maintaining a good level of liquidity. This indicates the company's commitment to a cautious financial policy aimed at achieving long-term sustainability, which positively reflects on the stability of its operations and market confidence.

Al-Jazira Takaful offers a comprehensive range of cooperative insurance products designed to meet the needs of individuals and businesses, with full commitment to Sharia principles. Cooperative health insurance is one of the company's flagship products, covering treatment expenses, medical examinations, surgeries, and medications for participants and their family members or company employees. These products are managed in collaboration with major healthcare service companies to ensure service quality and an extensive network of accredited hospitals.

In the vehicle insurance sector, the company provides policies against accidents, third-party insurance, and sometimes comprehensive insurance that covers theft and natural disasters. This sector is among the most demanded in the Kingdom due to regulatory requirements for vehicle insurance, prompting the company to develop flexible products that meet market needs and compete with prices offered by other insurance companies.

As for property insurance, services include protection against fire, theft, natural disasters, and unforeseen damages that may affect individuals' or companies' properties, such as factories, warehouses, and commercial offices. The company also covers work-related liabilities, such as contractor insurance or civil liability for professionals, providing businesses with comprehensive protection against various risks.

The company relies on traditional and modern distribution channels, including collaboration with Al-Jazira Bank branches, alongside digital platforms that allow for the rapid and efficient issuance and management of policies. A specialized Sharia committee oversees all products to ensure compliance with Sharia provisions, enhancing the confidence of a wide segment of clients seeking Islamic insurance solutions. The company continues to develop its products in response to changes in customer lifestyles and the growing need for integrated financial protection.

The insurance sector in the Kingdom of Saudi Arabia is one of the growing and evolving sectors, witnessing annual growth driven by increased insurance awareness, rising demand for health and vehicle insurance, and the implementation of mandatory regulations. Al-Jazira Takaful stands out as one of the key players in the field of Islamic cooperative insurance, benefiting from the support of Al-Jazira Bank and its extensive network of relationships with individual and corporate clients.

The sector includes strong competitors such as the Cooperative Insurance Company, United Insurance, Takmeel Group, Aman Insurance, and other local and international companies. These companies compete to attract market shares from written premiums that exceed billions of Riyals annually. Competition is primarily based on service quality, product diversity, the ability to settle claims quickly, and pricing levels. Al-Jazira Takaful benefits from the growing societal trend towards Sharia-compliant products, giving it a unique competitive advantage.

On the regulatory side, legislation such as mandatory health insurance for residents and vehicle insurance has contributed to expanding the customer base, leading to steady growth in premium volumes. The company faces challenges such as intense price competition and the need to develop modern digital products to keep pace with developments in the financial technology (Fintech) market, in addition to dealing with risks associated with natural disasters and rising health claims.

Al-Jazira Takaful's ability to enhance its insurance portfolio while maintaining service quality and innovating products aimed at previously untargeted segments is fundamental to its sustainability and growth in a changing competitive environment. Analytical reports indicate that the company is doubling its efforts to expand its market share through collaboration with strategic partners and developing its digital platforms, striving to achieve a balance between profitability and financial sustainability.

The Saudi cooperative insurance sector includes several major companies that compete fiercely to attract customers and capture the largest market share. Among Al-Jazira Takaful's most notable competitors are the Cooperative Insurance Company, known for its substantial capital and extensive branch network, and United Insurance, which offers a diverse range of products across all lines of insurance. Takmeel Group, specializing in health insurance, and Aman Insurance, which focuses on cooperative medical solutions, also stand out, along with startups and insurance brokerage firms seeking to innovate new digital solutions.

Al-Jazira Takaful's opportunities lie in its ability to offer Sharia-compliant products, providing it with a specialized customer base seeking halal financial solutions. It also benefits from close collaboration with Al-Jazira Bank, enabling it to quickly reach a wide range of customers and offer insurance packages linked to banking products. The ability to innovate digitally and develop applications and electronic platforms is another factor that could give the company a competitive edge in a rapidly digitizing market.

However, significant challenges lie ahead for Al-Jazira Takaful, primarily intense price competition among insurance companies, which could lead to margin erosion. The company also faces pressure from rising health claims, especially with increasing healthcare costs in the Kingdom. Regulatory bodies impose strict requirements on the capital and financial reserves that insurance companies must maintain, necessitating precise financial management.

Al-Jazira Takaful's success in this competitive market depends on its ability to manage risks effectively, improve operational efficiency, and develop products that meet changing market needs. Entering strategic partnerships or mergers may also be a suitable option to enhance its position against larger competitors.

Recently, Al-Jazira Takaful has witnessed several administrative and financial developments that have directly impacted the company's strategies and performance in the market. In August 2025, the company announced the appointment of Nayef bin Abdullah Al-Abdulkarim as Chairman of the Board and Yahya bin Mansour Al-Mansour as Vice Chairman, in a move aimed at strengthening leadership and implementing future expansion plans. This administrative change comes as the company seeks to keep pace with transformations in the insurance sector and enhance corporate governance.

Financially, the company's results for 2024 and the first half of 2025 showed significant growth in written premiums, contributing to an increase in net profits despite challenges related to rising health claims. These results reflect the company's ability to manage costs effectively, particularly regarding controlling administrative expenses and improving claims settlement processes. Additionally, enhancing liquidity and financial reserves without distributing cash dividends to shareholders demonstrates the company's commitment to financial sustainability and preparing for future growth.

In terms of strategic partnerships, Al-Jazira Takaful launched several initiatives to enhance its digital presence, including developing electronic platforms and mobile applications that allow customers to manage their policies and track claims easily and transparently. The company also signed agreements with leading healthcare service companies to improve the quality of health insurance provided to its clients. It also benefits from selling its products through Al-Jazira Bank branches, significantly expanding its customer base.

Regulatory bodies and financial analysis sites like "Argaam" monitor the company's periodic updates, confirming its relative stability and transparency in announcing business results. These developments come in the context of a dynamic market environment that requires insurance companies to continuously adapt to enhance their competitiveness and achieve their strategic objectives.

Al-Jazira Takaful strictly adheres to the principles of Islamic law in all its insurance and investment operations, giving it a distinctive edge in the Saudi market, which is witnessing an increasing demand for halal financial products. In cooperative insurance, each participant is considered a contributor to the cooperative fund, and premiums are managed as mutual contributions or donations aimed at covering the risks that any member may face. An independent Sharia board supervises all insurance contracts to ensure their compliance with Sharia, both in product structuring and investment policies.

Contracts for cooperative insurance must be free from usury (interest), excessive uncertainty (gharar), and prohibited practices such as gambling. Therefore, the fund's assets are invested in projects and investment instruments that comply with Sharia regulations, avoiding prohibited sectors such as alcohol or gambling. The Sharia board also oversees the distribution of insurance surpluses, ensuring that any financial surplus (after covering claims and expenses) is distributed to participants or retained to enhance reserves, as stipulated by internal regulations.

This approach reflects the desire of a wide segment of the Saudi community to obtain insurance products that align with religious values, making it an essential factor in attracting customers who prefer to avoid traditional commercial insurance. The commitment to Sharia also influences the company's internal culture, as employees are continuously trained on the principles of mutual assistance and Sharia management. Sharia supervision is a fundamental element in building trust with customers, ensuring that their funds are managed according to the principles of justice, transparency, and social solidarity advocated by Islam.

Al-Jazira Takaful adopts a clear strategy aimed at expanding its customer base and achieving sustainable growth through product development, geographical expansion, and digital innovation. In terms of products, the company focuses on offering insurance solutions that meet the evolving needs of individuals and businesses, such as comprehensive health insurance, loan insurance, and family protection programs. The company continuously seeks to update its policies and introduce additional features that respond to market demands and rapid changes.

Regarding geographical expansion, the company is considering opening new branches or representative offices in major cities across the Kingdom, leveraging Al-Jazira Bank's branch network to reach new customers in underserved areas. It also focuses on collaborating with subsidiaries of Al-Jazira Bank to offer insurance packages linked to banking products, such as personal and real estate financing insurance.

Digital innovation is a strategic focus in the company's future plans, as Al-Jazira Takaful has invested in developing electronic platforms and smart applications that allow customers to issue policies, pay premiums, and manage claims electronically without the need to visit branches. The company is working to integrate artificial intelligence and data analytics to enhance the customer experience and expedite claims approval processes. This aims to increase internal operational efficiency, reduce operational costs, and attract younger customer segments who prefer fast digital solutions.

Additionally, the company does not rule out the possibility of entering into partnerships or mergers with smaller companies to strengthen its position in new insurance specialties, particularly in advanced health insurance and cooperative life insurance. The expansion strategy and digital innovation reflect the company's ambition to keep pace with technological transformations and demographic changes, ensuring its continued competitiveness in the long term.

Al-Jazira Takaful is based on an integrated organizational structure that combines banking expertise with a modern insurance vision. At the forefront of the main shareholders is Al-Jazira Bank, which is the founding and largest financial supporter of the company. The bank plays a pivotal role not only in financing but also in marketing insurance products through its extensive branch network across the Kingdom, providing the company with strategic depth in reaching customers and offering integrated solutions that combine banking and insurance services.

In addition to Al-Jazira Bank, other Saudi investment companies hold significant stakes in the company's capital, including Al-Jazira Financial and several local financial institutions that contributed to the initial establishment. With the company's shares listed on Tadawul, there is now a significant proportion of individual and institutional investors trading the stock daily, enhancing the stock's liquidity and the transparency of financial disclosures.

At the administrative level, the company's board of directors, which includes members with banking and insurance expertise, oversees the implementation of strategic policies and monitors financial and operational performance. Specialized subcommittees such as the Audit Committee, Risk Committee, and Sharia Committee are appointed to ensure governance quality, risk control, and compliance with Sharia and regulatory legislation. The company is keen to develop its human resources through ongoing training programs focusing on the principles of mutual assistance, risk management, and modern insurance technologies.

This integrated structure enhances the company's capabilities to face market challenges, develop innovative products, and achieve a balance between growth and sound governance. Close collaboration with Al-Jazira Bank and the network of shareholders is a critical element in the company's sustainability and future expansion.

The Saudi cooperative insurance sector faces a range of challenges that require companies, including Al-Jazira Takaful, to develop effective strategies to manage and turn them into growth opportunities. Among the most significant challenges is the rising volume of health claims due to increasing treatment and medical care costs, which pressures the profitability of insurance companies and necessitates close monitoring of claims expenses and improving actuarial risk management.

The company also faces intense price competition amid the multitude of companies operating in the sector, where fierce competition on prices leads to reduced profit margins, especially in high-demand products such as health and vehicle insurance. Regulatory bodies impose strict requirements on the capital and financial reserves that companies must maintain to ensure their ability to meet obligations to clients, which necessitates Al-Jazira Takaful to manage its finances prudently and achieve a balance between growth and maintaining sufficient liquidity.

On the other hand, legislative developments such as mandatory health insurance for residents and increased insurance awareness among the community provide significant opportunities for the company to expand its customer base. Additionally, digital transformation and the innovation of specialized products are crucial factors that enable the company to stand out in the market and attract new customer segments. Opportunities also arise from the potential for strategic partnerships or acquisitions of smaller companies to enhance market share and enter new lines of insurance.

Al-Jazira Takaful's ability to capitalize on these opportunities primarily depends on the quality of its risk management, the flexibility of its pricing policies, and the efficiency of its operational processes. Furthermore, fostering a culture of innovation and investing in modern technologies will remain a pivotal factor in its ability to grow and face future challenges in a dynamic and continuously changing sector.

The operational performance of Al-Jazira Takaful reflects its ability to achieve sustainable growth in its insurance portfolio, despite a highly competitive market environment and regulatory challenges. During 2024 and the first half of 2025, the company showed continuous growth in written premiums, with moderate increases in revenues from health, vehicle, and property insurance compared to the previous year. This growth is attributed to the expansion of the customer base, the development of new products more suited to market needs, and the improvement of both digital and traditional distribution channels.

In terms of profitability, Al-Jazira Takaful managed to achieve good operating profits thanks to controlling health and administrative claims expenses, alongside implementing cautious actuarial policies in product pricing. Despite some rising claims, particularly in health insurance, the company maintained a reasonable profit margin by improving risk management processes and developing mechanisms for swift and transparent claims settlement. Financial data shows that the company retains sufficient financial reserves to meet future obligations, enhancing the confidence of both shareholders and clients.

Notably, the company has not announced cash dividends up to mid-2025, preferring to reinvest profits into enhancing reserves and supporting future expansion plans. This approach aligns with practices adopted by many developing insurance companies focused on achieving long-term financial sustainability. Operational performance indicators suggest that the company is well-positioned to capitalize on growth opportunities in the sector, provided it continues to develop products and enhance operational efficiency.

In light of the radical transformations occurring in the Saudi insurance sector, digital transformation has become a pivotal factor in enhancing companies' competitiveness, and Al-Jazira Takaful is no exception in this context. The company recognized early on the importance of digitization in improving customer experience and operational efficiency, developing electronic platforms and smartphone applications that allow customers to issue policies, pay premiums, and track claims status instantly and seamlessly. These digital services are essential in attracting new customer segments, especially young people and families who prefer quick and flexible solutions.

The company has also invested in artificial intelligence and data analytics, enabling it to improve risk underwriting processes and provide customized quotes based on each client's insurance profile. These technologies contribute to speeding up claims approval processes and reducing human errors, enhancing customer satisfaction and lowering operational costs. Additionally, digital platforms offer effective communication mechanisms with customers through live chats and smart notifications, contributing to building long-term relationships with clients.

Moreover, digital transformation has helped the company improve internal operations management by automating underwriting procedures, claims settlement, and financial and operational reporting. This automation allows management to focus on product development and respond quickly to market changes. The company plans to continue investing in digital technologies, focusing on expanding the use of artificial intelligence and advanced analytics to enhance its competitiveness in a rapidly evolving market. Today, digital transformation is the cornerstone of Al-Jazira Takaful's growth strategy and ensures its sustainability in the future.

Reserve and liquidity policies play a pivotal role in the sustainability of insurance companies and their ability to meet obligations to clients and shareholders, and Al-Jazira Takaful is a clear example of this. The company relies on a cautious financial policy aimed at enhancing financial reserves allocated to cover future claims, especially in light of the rising risks associated with health and vehicle insurance. These policies are subject to periodic review by specialized committees in risk management and regulatory compliance, with direct oversight from the board of directors.

In recent years, the company has preferred not to distribute cash dividends to shareholders and instead direct profits towards enhancing reserves and liquidity, providing it with a financial safety margin in the face of potential increases in claims or economic fluctuations. This approach aligns with the requirements of regulatory bodies in the Kingdom, which emphasize the importance of maintaining adequate levels of capital and reserves to ensure the company's continuity and ability to meet insurance obligations.

The company effectively manages its liquidity through short- and medium-term investments that comply with Sharia law, focusing on low-risk instruments that ensure capital preservation and moderate returns. This policy allows the company the flexibility to liquidate assets when needed to meet any urgent requirements or new investment opportunities. Strong financial reserves also enable Al-Jazira Takaful to enter into strategic partnerships or acquire stakes in other companies to enhance its market position.

It is important to note that a strong reserve policy not only reflects the company's financial stability but also enhances customer and investor confidence in its ability to meet long-term obligations. These policies are a fundamental element in building the company's reputation and maintaining its sustainability in a highly competitive and changing sector.

Future analyses indicate that the cooperative insurance sector in the Kingdom of Saudi Arabia will continue to grow in the coming years, driven by population growth, increased spending on healthcare, and the implementation of mandatory health and vehicle insurance regulations. Al-Jazira Takaful is well-positioned to benefit from these trends, especially with the support of Al-Jazira Bank and the expansion of collaboration with strategic partners.

The company is expected to achieve gradual growth in written premiums, with an expanding customer base resulting from continued product development and the innovation of digital insurance solutions that meet the needs of individuals and businesses. Digitizing services, improving customer experience, and expanding the distribution network are key factors in achieving this growth. Furthermore, the company's focus on enhancing financial reserves and investing in modern technologies provides it with greater flexibility to face market fluctuations and regulatory changes.

Growth prospects also depend on the company's ability to manage challenges such as price competition, rising health claims, and financial reserve requirements. Investing in developing human resources, adopting precise actuarial policies, and expanding alliances with other financial institutions are strategies that may support the company's market position.

However, the outlook remains contingent on the company's ability to maintain service quality and innovate new products that respond to market changes. If Al-Jazira Takaful can achieve sustainable financial stability, it may consider distributing cash dividends to shareholders in the future, enhancing the stock's attractiveness in the financial market. The sector as a whole remains poised for growth with the entry of new investors and the expansion of digital services, opening wide horizons for companies capable of adapting and innovating.