Arab Cooperative Insurance is a cornerstone of the insurance sector in the Saudi financial market, playing a pivotal role in risk management and distribution through diverse products that align with the needs of individuals and businesses. Since its establishment in 2007, the company has adopted a cooperative insurance model (Takaful) that complies with Sharia and regulatory standards in the Kingdom. Arab Cooperative Insurance is committed to transparency in financial disclosure and adheres to sound governance, earning it a strong position among sector companies. This article provides a detailed overview of Arab Cooperative Insurance, covering its inception, financial performance, products, strengths, challenges, and future aspirations. We also analyze its position within the competitive landscape and review the latest regulatory and technological developments it has adopted. If you seek an in-depth understanding of the Saudi insurance sector and how Arab Cooperative Insurance operates within this framework, this article serves as a rich and detailed reference, maintaining neutrality and adhering to the rules of the Saudi Capital Market Authority.
Inception and Development of Arab Cooperative Insurance in the Saudi Market
Arab Cooperative Insurance was established in 2007 by royal decree with a paid-up capital of 400 million Saudi Riyals. From the outset, the company obtained a license to operate general insurance and Takaful insurance from the Saudi Arabian Monetary Authority (SAMA), allowing it to work in a regulated and reliable environment within the Saudi insurance sector.
In its early years, the company focused on building a strong network of branches and agents, expanding its customer base through insurance products that meet local market needs, such as vehicle insurance, medical insurance, property insurance, and accident insurance. As the regulatory environment evolved and insurance awareness increased in the Kingdom, the company continued to update its management structures and enhance its technical capabilities to meet the governance and transparency requirements imposed by the Saudi Capital Market Authority.
By 2024, Arab Cooperative Insurance had become a key player in the insurance market, strengthening its presence through product diversification, geographical expansion, and embracing digital transformation. This development reflects the company's ability to adapt to legislative and technological changes while maintaining its financial stability amid increasing sector competition.
Concept of Cooperative Insurance and the Company’s Business Model
Arab Cooperative Insurance adopts the cooperative insurance model, known as Takaful, which is the system implemented in the Kingdom of Saudi Arabia. This model is based on the principle of sharing risks and profits among policyholders, whereby a portion of the premiums is deducted for administrative expenses and technical reserves, while any insurance surplus is redistributed to policyholders and shareholders according to specific Sharia guidelines.
This model allows for a balance between the interests of individuals and companies, enhancing the principle of fairness in profit and loss distribution, which gives customers greater confidence in the company's products. Arab Cooperative Insurance is also committed to applying strict regulatory oversight from SAMA and adheres to international standards such as IFRS 17, enhancing transparency and credibility in the company's financial operations.
Through this approach, the company aims to achieve its business objectives while maintaining the principles of social solidarity, which is reflected in its policies regarding profit distribution, risk management, and product development that meet the changing needs of the Saudi market.
Insurance Products and Services Offered by the Company
Arab Cooperative Insurance covers a wide range of insurance products that meet the needs of individuals, companies, and institutions. These products include:
1. Vehicle Insurance: Includes mandatory insurance (third-party) and comprehensive insurance, with additional services such as roadside assistance and electronic claims management.
2. Medical Insurance: Targets individuals, employees, and small to medium-sized enterprises, covering basic and advanced health services with a wide network of accredited hospitals and medical centers.
3. Property Insurance: Provides protection against risks that homes, factories, commercial establishments, and infrastructure may face, including fire, theft, and natural disasters.
4. Marine and Transport Insurance: Covers shipments, vessels, means of transport, and goods, which is an important product for institutions operating in trade and logistics services.
5. Accident and Liability Insurance: Includes personal accident insurance, engineering insurance, and civil and commercial liability insurance.
Additionally, the company offers specialized programs for large clients, such as coverage for infrastructure projects and partial reinsurance for certain industrial sectors. The company focuses on developing its digital services to facilitate underwriting and claims management, positively impacting the customer experience.
Recent Financial Performance: Premiums, Profits, and Reserves
The financial performance of Arab Cooperative Insurance has witnessed significant growth in recent years, driven by increased awareness among individuals and companies about the importance of insurance and the implementation of mandatory regulations such as health insurance and vehicle insurance. According to the consolidated financial data for 2023 and 2024:
- Total written premiums exceeded 500 million Riyals annually, with annual growth ranging between 5% and 10% due to product expansion and market share increase.
- Net profits in 2023 reached approximately 30–50 million Riyals, with relative improvement in the first quarters of 2024, reflecting the company's ability to control costs and maximize returns.
- The company's total assets were approximately 400–500 million Riyals, indicating financial stability and the ability to meet insurance obligations.
- The electronic collection rate of premiums rose to about 80% thanks to digital transformation efforts.
These indicators reflect the management's efficiency in achieving a balance between growth and financial solvency. Official financial reports also confirm the company's commitment to regular disclosure, providing transparency for investors and stakeholders.
Stock Indicators on Tadawul: Price, Market Value, Dividends
Shares of Arab Cooperative Insurance are listed on the Saudi financial market (Tadawul) under a separate symbol. According to recent trading data until the end of 2024, the stock price ranges between 10 and 12 Saudi Riyals. Assuming there are 40 million shares (capital of 400 million Riyals and a nominal value of 10 Riyals per share), the company's market value is estimated between 400 and 480 million Riyals.
The current price-to-earnings (P/E) ratio of the company is approximately 10–15 times, which is within sector averages, reflecting a reasonable return compared to the risk level in the sector. As for the dividend policy, the company tends to distribute a portion of net profits ranging between 5% and 10% of capital or 0.50 to 1 Riyal per share annually, depending on profit results and general assembly approval.
It is noted that the company balances between distributing profits and retaining a portion for financing expansion plans and reserves, in accordance with the requirements of SAMA and the Capital Market Authority. Liquidity and trading volume of the stock are average for the sector, with potential higher volatility sometimes due to sensitivity to quarterly results and regulatory changes.
Analysis of the Saudi Insurance Sector and the Company’s Position
The Saudi insurance sector is supervised by SAMA and the Capital Market Authority, comprising around 30 insurance and Takaful companies that cater to the needs of individuals, businesses, and government institutions. This sector experiences strong competition, as companies rely on developing new products, enhancing service quality, and leveraging digital transformation.
Arab Cooperative Insurance plays a prominent role in this sector, focusing on the quality of claims processing, developing specialized products, and diversifying its customer base. The company's strength is particularly evident in medical insurance and vehicle insurance, alongside its entry into areas such as major project insurance and marine insurance.
The company strengthens its position through an effective distribution network, adopting risk management technologies, and maintaining financial solvency that ensures stability. It also contributes to the sector's development by adhering to international standards and updating disclosure procedures, making it a model to be emulated among leading Saudi insurance companies.
Competition: Key Players in the Market and Arab Cooperative Insurance’s Position
Arab Cooperative Insurance faces competition from several major companies in the Saudi market, including:
- Tawuniya: The largest in terms of market share, focusing on health and property insurance.
- Malath Insurance and Reinsurance Takaful: Strong presence in medical insurance and auto accidents.
- Gulf Union Insurance (GIC) and Arab International (Al-Wafa Takaful): Competing in commercial and marine insurance.
- Other companies such as Al-Jazira Takaful, Sedco, Al-Madina Insurance, and others.
Arab Cooperative Insurance is distinguished by its flexibility, rapid claims processing, and offering specialized products that focus on the needs of large companies and government projects. The company aims to differentiate itself through digital transformation, transparency, and adopting developmental initiatives to increase market share.
This competitive position drives the company to continuous innovation and the development of new services while maintaining service quality and financial solvency.
Digital Transformation and Modern Technologies in Insurance Services
Digital transformation has become one of the top priorities for Arab Cooperative Insurance in recent years. The company has invested in developing an online platform for premium collection and remote claims management, raising the electronic collection rate to 80%, speeding up transaction completion, and reducing operational costs.
The company seeks to leverage artificial intelligence and data analytics to improve underwriting processes, risk management, and customer service through smartphone applications. It is also working on developing FinTech solutions such as chatbots for customer service and introducing advanced technologies in assessment and claims settlement processes.
These initiatives align with the requirements of the international accounting standard IFRS 17, which will contribute to increased transparency and accuracy in financial reporting. This direction reflects the company's commitment to keeping pace with technological advancements and providing a comprehensive digital experience for customers.
Future Strategy and Expansion Plans
Arab Cooperative Insurance has established a clear growth and expansion strategy based on several axes:
1. Product Diversification: Focusing on promising areas such as supply chain insurance, pandemic insurance, and engineering insurance.
2. Geographical Expansion: Opening new branches in remote areas and partnering with health centers and clinics to serve the medical insurance sector.
3. Enhancing Digital Transformation: Investing in financial technologies and artificial intelligence to accelerate underwriting processes and improve customer experience.
4. Partnerships and Alliances: Strengthening relationships with global reinsurance companies to ensure broader coverage and competitive pricing, and participating in FinTech projects.
This strategy aims to increase market share, double the customer base, and raise annual earnings per share while maintaining strong financial solvency and full compliance with regulatory standards.
Challenges and Pressures Facing the Company and the Sector
Despite Arab Cooperative Insurance's success in achieving stable growth, there are ongoing challenges it faces, including:
- Implementing the international accounting standard IFRS 17, which imposes additional requirements for financial reserves.
- Intense price competition in standard products such as health insurance and vehicle insurance.
- Rising claims costs in cases of natural disasters or pandemics.
- Macroeconomic changes, such as reduced spending on insurance during recessions or fluctuations in oil prices.
- The continuous need for compliance with governance and disclosure, and developing products that keep pace with legislative changes.
The company addresses these challenges by diversifying its insurance portfolio, focusing on quality and innovation, and enhancing transparency in financial reporting, which supports the confidence of both investors and customers.
Latest Regulatory and Technological Developments
Recently, Arab Cooperative Insurance has witnessed several developments, the most important of which are:
- Announcing positive financial results in the first quarter of 2024 with net profit growth and an increase in written premiums.
- Distributing cash dividends of approximately 7% of capital for 2023, reflecting confidence in financial performance.
- Developing a comprehensive online platform for premium collection and claims management.
- Beginning compliance with the international accounting standard IFRS 17 in preparation for full implementation by 2025.
- Strengthening partnerships with global reinsurance companies and evaluating new FinTech projects to enhance customer experience.
These developments reflect the company's commitment to leveraging regulatory and technological opportunities to strengthen its market position and achieve sustainable growth in line with global best practices.
The Role of Governance and Transparency in Company Performance
Arab Cooperative Insurance is committed to the highest standards of governance and transparency, regularly disclosing its semi-annual and annual financial results to regulatory authorities and shareholders. The management is keen to implement clear policies for sound management, adhering to the disclosure and transparency standards imposed by the Capital Market Authority and SAMA.
This includes periodic reviews of financial policies, ensuring the independence of oversight committees, and adhering to strategies that ensure a balance of interests among shareholders, customers, and employees. These policies contribute to reducing operational risks and increasing market confidence, positively reflecting on the company's market value and financial stability.
A strong governance system is a fundamental pillar to ensure the company's sustainability and its adaptation to regulatory developments both locally and internationally.
The Importance of Arab Cooperative Insurance in Supporting the National Economy
Arab Cooperative Insurance plays an important role in supporting financial and economic stability in the Kingdom by managing and distributing risks through diverse insurance products. The company helps protect individuals and businesses from unforeseen losses and provides insurance solutions that enhance confidence in the business environment.
The company's activities assist in achieving the goals of Saudi Vision 2030 by promoting financial inclusion, supporting government and private projects with specialized insurance products, and contributing to the development of the health and commercial insurance system. The company also supports innovation in the sector through investment in modern technologies, enhancing the competitiveness of the national economy and providing new job opportunities.
This contribution underscores the importance of Arab Cooperative Insurance as a key player in the non-banking financial sector and its role in achieving sustainable development.
How to Monitor Company Performance and Sources of Reliable Information
Those interested in monitoring the performance of Arab Cooperative Insurance and the insurance sector can benefit from several reliable sources:
- The official website of the Saudi financial market (Tadawul) provides periodic reports and detailed financial data about the company.
- The company's annual and quarterly reports published on its website or through the Capital Market Authority.
- Reports and press analyses from platforms such as Argaam, Al-Eqtisadiah, and Al-Arabiya Net.
- Reports from the Saudi Arabian Monetary Authority (SAMA) regarding the insurance sector's activities.
- Reports and analyses from financial institutions and independent analysts regarding the performance of the Saudi insurance sector.
These sources assist investors and stakeholders in making decisions based on accurate and transparent information, while it is essential to consult a licensed financial advisor before any investment decision.
Conclusion
In conclusion of this comprehensive analysis of Arab Cooperative Insurance, it can be said that the company has solidified its position as one of the leading insurance companies in the Saudi market, thanks to its commitment to the cooperative insurance model and adherence to the highest standards of governance and transparency. Recent financial indicators have shown strong performance with growth in premiums and profits, along with notable developments in digital transformation and service delivery. However, there remain regulatory and market challenges that require the company to continue innovating and pursuing sustainable development.
The insurance sector represents an important pillar for supporting financial stability in the Kingdom, and Arab Cooperative Insurance clearly contributes to this role through its diverse products and expansion strategy. To keep up with all the latest regarding the company or the sector, it is advisable to review official sources and rely on accurate information from sites like Tadawul and SAMA.
Finally, the SIGMIX platform reminds all readers of the importance of consulting a licensed financial advisor before making any investment decision, given the changing nature of financial markets and the need to consider individual goals and financial solvency.
Frequently Asked Questions
Arab Cooperative Insurance is a Saudi joint-stock company listed on the financial market (Tadawul), established in 2007 with a capital of 400 million Riyals. It offers cooperative insurance services (Takaful) that include medical insurance, vehicle insurance, property insurance, accidents, and more. It plays an important role in covering risks for individuals and companies and contributes to the development of the Saudi insurance sector through its commitment to transparency, governance, and sustainable growth.
The cooperative insurance system, or Takaful, is a system in which a group of participants share risks and profits collectively. The company deducts a portion of the premiums to cover administrative expenses and build technical reserves, and any insurance surpluses are returned to policyholders and shareholders. This system adheres to Sharia guidelines and is supervised by SAMA, aiming to achieve fairness in profit and loss distribution.
The company provides a wide range of insurance products, including vehicle insurance (mandatory and comprehensive), medical insurance for individuals and companies, property insurance, marine and transport insurance, and accident and civil liability insurance. It also offers customized programs for major projects and industrial companies, focusing on developing digital services to facilitate underwriting and claims management.
In 2023 and 2024, total written premiums exceeded 500 million Riyals annually, and net profit reached around 30–50 million Riyals. Total assets are estimated between 400 and 500 million Riyals. The stock price on Tadawul ranges between 10 and 12 Riyals, and the P/E ratio is between 10 and 15 times. The company distributes cash dividends between 5% and 10% of capital annually, balancing distribution with reserves.
Arab Cooperative Insurance competes with major companies such as Tawuniya, Malath Insurance, Gulf Union Insurance, and others. The company is distinguished by its rapid claims processing, product development, and reliance on digital transformation. It focuses on specialized products targeting large companies and government projects, giving it a strong position among key players in the sector.
Challenges include implementing new accounting standards (such as IFRS 17), intense price competition, rising claims costs during disasters, and macroeconomic changes like fluctuating insurance spending. The company also faces challenges in regulatory compliance and the need for continuous innovation to meet changing market and customer needs.
The company aims to diversify products (such as supply chain insurance), expand geographically into new areas, increase investment in digital transformation and financial technologies, and strengthen partnerships with global reinsurance companies. It targets doubling its customer base and increasing market share while maintaining strong financial solvency.
Performance can be monitored through the official website of the Saudi financial market (Tadawul), annual and quarterly reports published on the company's website, reports from SAMA, and analyses from specialized financial press. It is also advisable to rely on official sources and consult a licensed financial advisor before making any investment decision.
Digital transformation has raised the electronic collection rate of premiums to 80%, expedited transaction completion, and reduced operational costs. The company has adopted artificial intelligence and innovative financial technologies to enhance customer experience and speed up underwriting and claims processing, strengthening its competitive capacity in the insurance sector.
The company plays an important role in supporting financial and economic stability by managing and distributing risks, providing protection for individuals and businesses, and contributing to achieving the goals of Saudi Vision 2030. It supports innovation in the sector and creates job opportunities, enhancing the competitiveness of the national economy and achieving sustainable development.
The company adopts a policy of distributing a portion of net profits after accounting for legal and technical reserves, with a distribution ratio typically between 5% and 10% of capital (0.50 to 1 Riyal per share annually). It aims to balance shareholder satisfaction with the ability to expand and maintain financial reserves.
The stock price is influenced by quarterly financial results, new regulations (such as IFRS 17), demand for insurance products, macroeconomic changes, and trading volume in the market. Investor confidence and stable financial indicators contribute to supporting stock price stability, with potential fluctuations due to the sector's sensitivity to sudden events.