Arab Shield Insurance: Comprehensive Analysis of Performance and Prospects in

Arab Shield Insurance Company was established in the Kingdom of Saudi Arabia as one of the joint-stock companies listed on the Saudi stock market (Tadawul), providing cooperative insurance services for individuals and businesses. The company's portfolio includes health insurance, vehicle insurance, engineering insurance, fire and multi-risk insurance, and property insurance. The company is committed to applying the regulations issued by the Saudi Capital Market Authority and the Insurance Supervision Authority, ensuring compliance with local legislation and disclosure and governance requirements. Its commitment to regulatory standards is one of the factors that enhance customer and investor confidence in its services. Arab Shield operates in a highly competitive environment, competing with a large number of local insurance companies, and is keen to develop its products and improve customer services to achieve larger market shares. With the accelerating digital transformation in the Kingdom, the company has expanded its offerings of digital insurance solutions to meet changing customer needs, enhancing its ability to reach broader segments of the Saudi market.

Arab Shield Insurance has shown significant improvement in its financial performance during the years 2024 and 2025. The last recorded price of the company's stock was approximately 18.50 SAR, with a market capitalization of about 2.78 billion SAR based on the outstanding shares of 150 million. The price-to-earnings (P/E) ratio was around 13 times based on the expected earnings for 2025, placing the company within the sector's average in terms of valuation. The cash dividend yield reached 3.5%, with distributions of 0.65 SAR per share for the year 2024. In terms of operational performance, the company's revenues increased by about 10% in 2024 compared to the previous year, while net profits grew by 15%, supported by improved profit margins and cost management. The total written insurance premiums for the fourth quarter of 2024 reached 210 million SAR, an increase of 8% compared to the same period last year. These figures reflect Arab Shield's ability to capitalize on sector growth and improve operational efficiency.

The Saudi cooperative insurance sector is one of the vital sectors that has witnessed increasing growth in recent years, supported by government policies such as Vision 2030, rising insurance awareness in society, and the expansion of national infrastructure projects. Among the key growth drivers in the sector are: mandatory health insurance for all workers, mandatory third-party insurance for vehicle owners, and digital transformation in providing insurance services. Major projects such as NEOM and Qiddiya have also contributed to increased demand for engineering insurance and property insurance. On the regulatory front, the Insurance Supervision Authority has introduced international standards such as IFRS 17, enhancing financial transparency and governance. The challenges facing the sector include intense competition, controlling loss ratios, medical cost pressures, and the ongoing need for digital development and improving customer experience. In this context, companies like Arab Shield strive to diversify their products and adopt digital technologies to enhance their competitiveness.

Arab Shield Insurance's stock is traded within the insurance sector on the Saudi financial market (Tadawul), and the stock has seen relative stability in its value during 2024-2025, fluctuating around 18.50 SAR. This stability reflects investor confidence in the company's ability to achieve sustainable profit growth, especially in light of good financial performance and stable cash distributions. However, the stock prices of insurance companies are influenced by several factors such as quarterly business results, regulatory changes, and the level of competition in the market. The Tadawul platform allows investors to track stock movements, view key indicators such as the P/E ratio and dividend value, and analyze the company's performance compared to its competitors in the sector. It is important to note that market fluctuations are normal and depend on economic and sectoral conditions, so it is always advisable to analyze financial data and review official disclosures before making any investment decision.

The financial results for Arab Shield Insurance during the third and fourth quarters of 2024 showed clear growth in revenues and net profits. The total written insurance premiums during the fourth quarter reached 210 million SAR, an increase of 8% compared to the same quarter of 2023. The net profit before zakat recorded about 22 million SAR, with a growth exceeding 12%. This growth is attributed to the company's effective management of its premium portfolio, improved pricing policies in line with actual risks, as well as cost control and improved claims management. The application of IFRS 17 standards has also positively impacted the quality of financial disclosure and transparency of results. These indicators demonstrate the company's ability to achieve sustainable growth in the current competitive environment while maintaining good profit margins compared to the sector.

Arab Shield Insurance competes with several leading companies in the Saudi insurance sector such as Bupa Arabia, Tawuniya, Walaa, Malath, and Brol. These companies differ in asset size, product diversity, and market share. For example, Bupa Arabia excels in health insurance, while Tawuniya stands out in comprehensive insurance. Arab Shield enjoys a conservative dividend distribution structure and a P/E ratio within the sector's average. In terms of profit growth, the company showed positive indicators in 2024, but it remains smaller than some of the larger competitors. Arab Shield's strengths lie in digital transformation and new product development, while challenges include expanding the customer base and increasing market share amid strong competition. Financial comparisons such as P/E ratio, price-to-book value, and dividend yield provide investors with a clear view of the company's relative position in the sector.

Regulations issued by the Capital Market Authority and the Insurance Supervision Authority play a crucial role in determining the performance of insurance companies in Saudi Arabia. In 2024, the application of the International Financial Reporting Standard IFRS 17 was enforced, leading to adjustments in the way revenues and insurance reserves are calculated, increasing the transparency of financial statements. The authority also raised the minimum capital and liquidity requirements for cooperative insurance, enhancing the robustness of companies and reducing systemic risks in the sector. For Arab Shield, the company adhered to these standards and updated its accounting policies, contributing to enhancing investor confidence and improving the quality of financial disclosures. On the other hand, regulatory changes impose a continuous commitment to internal development and updating governance systems, which presents both a challenge and an opportunity to improve operational efficiency and competitiveness.

With the rapid pace of digital transformation in the Kingdom, insurance companies, including Arab Shield, have begun adopting modern technological solutions to facilitate underwriting processes and claims management. The company has launched mobile applications and electronic platforms for instant insurance document issuance, especially for vehicle and truck insurance products. Digitization has improved customer experience, accelerated sales cycles, and reduced operational costs. Digital tools have also enabled the development of new products such as microinsurance and insurance for goods through e-commerce. This transformation aligns with the aspirations of the new generation of customers who prefer fast and transparent digital services. Digital transformation represents a strategic pillar for Arab Shield to achieve growth and increase financial inclusion in the Saudi market.

Arab Shield Insurance follows a conservative dividend distribution policy, with a cash dividend yield of approximately 3.5% for 2024, distributing 0.65 SAR per share. This yield represents a balance between providing regular income to shareholders and retaining a portion of profits to support growth and expansion. It is worth noting that the average dividend yield in the Saudi insurance sector ranges between 3% and 5%. The distribution policy depends on business results, capital requirements, and economic conditions. The company aims to achieve a balance between the attractiveness of the stock to investors and the sustainability of operational growth. Quarterly and annual disclosures allow investors to regularly monitor the distribution policy and analyze its impact on the overall investment return.

Risk management is a core element in the operations of insurance companies, as Arab Shield faces challenges related to claims volatility, investment risks, and regulatory changes. The company relies on advanced underwriting models to price products accurately and control loss ratios. It also places significant importance on monitoring loss ratios and operational ratios to ensure appropriate profit margins. The company also aims to diversify its premium portfolio and distribute risks across different sectors (health, vehicles, property, engineering). Additionally, Arab Shield is committed to capital and liquidity management standards, ensuring the fulfillment of future obligations to clients and shareholders. Reinsurance plays an important role in enhancing the company's ability to handle large claims, especially in cases of disasters or major accidents.

The insurance sector in Saudi Arabia continues to grow, driven by government policies, expansion in the national economy, and increasing societal awareness of the importance of insurance. Among the most prominent future opportunities are: the expansion of health insurance products, engineering insurance related to mega projects, and the launch of digital insurance products that meet changing market needs. On the other hand, challenges such as intense competition, controlling loss ratios, and evolving regulatory frameworks are prominent. Companies also face challenges regarding mergers and strategic alliances, especially amid changes in capital and solvency requirements. For Arab Shield, continuing digital development, enhancing customer service, and diversifying products are key success factors to ensure sustainability and growth in a changing competitive environment.

The ownership of Arab Shield Insurance is subject to disclosures from the Capital Market Authority, with shareholders distributed among investment institutions, government and private funds, and individual local investors. There are usually significant stakes held by pension funds or cooperative banks, alongside individual investors. The ownership structure is published periodically through the company's disclosures and Tadawul market reports, allowing investors to identify major shareholders and their changes. The company is also committed to transparency standards in disclosing any significant changes in the shareholder structure. The diversity of the shareholder base supports the stability of the stock and its attractiveness in the market, contributing to enhancing the confidence of existing and new investors.

The Saudi insurance sector witnessed several important developments during 2024-2025, including profit growth for most companies due to increased demand for health and property insurance and enhanced digitization in service delivery. Arab Shield launched electronic applications to facilitate the issuance of insurance documents and claims management, and the company also implemented IFRS 17 standards that enhanced the quality of financial disclosure. On the other hand, the market experienced strong competition for government and private contracts, with some companies continuing to distribute additional dividends or increase capital. Investors are anticipating the first-quarter results of 2025 to determine growth trends, especially amid concerns about the impact of inflation and healthcare costs on sector results. Competition and innovation in digital products are expected to remain key factors shaping the market in the coming years.

Investors and followers of the Saudi insurance sector often ask questions about Arab Shield's performance, its distribution policy, competitive position, and future prospects. In the next section of the article, we will review the most prominent of these questions with detailed answers to help understand the essential aspects related to the company and its stock in the Saudi financial market.