Union Cooperative Insurance Company: Comprehensive Financial Analysis

Union Cooperative Insurance Company officially launched in 2007, following the approval of the Saudi Cabinet and the issuance of Royal Decree No. (M/25) granting it a license to operate in the local market. The company's roots trace back to one of the companies in the Commercial Coalition Group, providing it with accumulated expertise in traditional insurance before transitioning to the cooperative system adopted in the Kingdom. Since its inception, the company has committed to applying best practices in governance and transparency, expanding its insurance solutions for individuals and institutions, benefiting from the rising demand for insurance amid economic and legislative developments in the Kingdom. The strict regulatory environment imposed by SAMA and the Capital Market Authority has helped build customer and investor trust in the company's performance and sustainability.

Union Cooperative Insurance Company offers a wide range of insurance products, including car insurance, property insurance, health insurance for individuals and businesses, and life and civil liability insurance. The company aims to meet the needs of all segments of society, from individuals to small and medium enterprises and large institutions. In recent years, Union Insurance has focused on developing specialized products such as professional liability insurance, medical travel insurance, and digital insurance products that facilitate subscription and claims management online. The company has also expanded its partnerships with healthcare providers to offer broader medical services and greater geographical coverage. It is committed to complying with cooperative insurance standards, managing its operations based on the principle of sharing surpluses or deficits among policyholders and shareholders.

Union Cooperative Insurance Company is under the supervision of the Saudi Arabian Monetary Authority (SAMA) and the Capital Market Authority, which imposes strict compliance with corporate governance and financial transparency standards. The company adopts International Financial Reporting Standards (IFRS 17) and issues detailed quarterly and annual reports on its financial performance. It also adheres to internal risk management policies, quality financial auditing, and applies anti-money laundering regulations and customer rights protection. The company regularly participates in workshops and regulatory initiatives aimed at developing the insurance sector and enhancing investor confidence. This regulatory framework has contributed to the company recently receiving a high credit rating from Moody's, reflecting its strong financial position and ability to meet future obligations.

According to the latest data from Tadawul, the share price of Union Cooperative Insurance Company at the end of July 2025 was approximately 12.47 Riyals, bringing the market capitalization to around 624 million Riyals. The results for the first quarter of 2025 showed a significant improvement in revenues, with the company recording growth in total written premiums ranging between 3% and 5% compared to the same period last year. Net profit also increased by an estimated 5% to 8%. The price-to-earnings ratio (P/E) fluctuated between 10 and 12, reflecting a balance between the share price and the company's profitability, although this requires periodic review with the issuance of new financial data. Regarding cash distributions, the company did not record significant distributions during 2024, as management preferred to strengthen reserves to face challenges and maximize growth opportunities.

The stock of Union Cooperative Insurance (8170) represents one of the active stocks in the Saudi insurance sector and is under continuous monitoring by investors. Key financial indicators include the current share price (12.47 Riyals), market capitalization (~624 million Riyals), and an estimated P/E ratio of around 10–12. It is noteworthy that the company's dividend yield is relatively low at present, as it has not announced significant distributions in recent periods. The fluctuation of these indicators reflects the company's exposure to sector factors such as competition, claims development, and changes in regulatory laws. Investors closely monitor the company's quarterly reports to detect any improvement or decline in financial performance, keeping in mind that all stock investments require careful and unhurried consideration.

The Saudi insurance sector is witnessing continuous growth amid economic transformation under Vision 2030. Supportive regulations, such as mandatory health insurance and vehicle insurance, play a significant role in increasing the volume of written premiums among local companies. Additionally, the shift towards digitization and innovation in products and services enhances companies' ability to attract new customers and improve profitability. However, the sector faces ongoing challenges, such as rising claims costs in health insurance, intense competition among companies, and changes in interest rates. In this context, Union Cooperative Insurance Company seeks to strengthen its position by developing specialized products, investing in digital transformation, and applying best risk management practices to keep pace with rapid market changes.

Union Cooperative Insurance Company competes with several prominent entities in the sector, including Tawuniya Insurance Company, Malath Cooperative Insurance Company, Waf (formerly Medgulf), Gulf Insurance Company, and Al-Durra Insurance Company. These companies hold significant shares in the Saudi insurance market and compete with each other on service quality, product diversity, and digital innovation. Union Insurance's competition is concentrated in the health insurance and vehicle insurance sectors, where it aims to enhance its market share by offering distinctive offerings and expanding its service provider network. The company continuously monitors competitor movements and leverages financial and marketing analytics to develop its strategies.

In May 2025, Union Cooperative Insurance Company received an 'A3' credit rating with a stable outlook from Moody's. This rating reflects the company's strong ability to meet its financial obligations and the stability of its operational conditions. It also gives the company a competitive advantage in negotiations with global reinsurance companies and lowers financing costs if it wishes to expand its activities or implement new projects. A high rating is evidence of effective risk management, quality governance, and financial information transparency, which enhances the level of trust among investors and customers alike.

In its ongoing efforts to develop its business, Union Cooperative Insurance Company focused during 2024–2025 on developing health and travel insurance products and expanding partnerships with healthcare providers. It also participated in regulatory initiatives such as workshops on corporate governance and technological innovation in insurance, in collaboration with SAMA and the Capital Market Authority. With the adoption of International Financial Reporting Standards (IFRS 17), the company has enhanced the quality of financial disclosure and transparency. The company's future plans target a focus on digital transformation, improving customer experience, and expanding the geographical customer base within the Kingdom.

The paid capital of Union Cooperative Insurance Company is 400 million Saudi Riyals, distributed over 40 million shares with a nominal value of 10 Riyals per share. This financial structure reflects stability in the shareholder base and the availability of resources necessary to support business expansion. With the stock trading at a price higher than its nominal value, the company's market capitalization exceeds its paid capital, reflecting market confidence in the company's future and financial capabilities. Transparency in the ownership structure and monitoring of Tadawul data allow investors to track stock developments and analyze the company's financial strength indicators.

Union Cooperative Insurance Company places special importance on sustainability and social responsibility, implementing environmental and social policies aligned with the Kingdom's direction towards a green economy. The company participates in community awareness initiatives about the importance of insurance and supports financial inclusion and health insurance programs for low-income families. It is also committed to applying environmental, social, and governance (ESG) standards and works to reduce the environmental impact of its activities by adopting digital solutions and reducing reliance on paper. These efforts are part of the company's strategy to enhance community and customer trust and achieve sustainable development in the Saudi insurance sector.

Like other companies in the sector, Union Cooperative Insurance faces a range of challenges, including rapid changes in regulations, increasing competition, and fluctuations in claims costs, especially in health insurance. Macroeconomic changes, such as inflation or interest rate volatility, can also affect the company's business results and its ability to achieve sustainable profit margins. The company is addressing these challenges by diversifying its product portfolio, investing in digitization and data management, and applying more flexible pricing models that adapt to market changes. It also places special emphasis on operational risk management and enhancing team efficiency and continuous training.

Investors and followers can access all financial results and developments of Union Cooperative Insurance Company through the official Tadawul website, where the company publishes detailed quarterly and annual reports, in addition to urgent announcements regarding any significant changes or strategic developments. The company also provides annual disclosure reports and approved financial statements on its official website. Platforms such as Argaam and Trends provide real-time market data and results. It is always important to refer to official and reliable sources for accurate and updated information regarding the company's performance.