Buruj Cooperative Insurance Company: In-Depth Performance Analysis

Buruj Cooperative Insurance Company was established amid a regulatory boom witnessed by the Saudi insurance sector following the issuance of the first comprehensive insurance regulation in 2005. Buruj emerged as a result of a partnership between Saudi investors and Gulf Insurance Group, one of the leading regional groups in the insurance and reinsurance industry. The company officially launched in the late 2000s, responding to the local market's need for insurance companies capable of providing Sharia-compliant solutions and the cooperative insurance model mandated by Saudi regulations. The company is headquartered in Riyadh and has been keen since its inception to build a solid capital base of 150 million Saudi Riyals, distributed over 15 million nominal shares valued at 10 Riyals each. Buruj has distinguished itself since its inception with a focus on governance and transparency, as it was listed on the Saudi financial market (Tadawul), and trading on its shares began under the symbol 8270, which provided it with the opportunity to reach a broader investor base and enabled it to comply with the required disclosure and oversight standards in the Saudi market. During its early years, Buruj invested in developing its technical and human capabilities, benefiting from the technical and managerial expertise of Gulf Insurance Group in pricing, risk management, and reinsurance. The company expanded by opening branches in key regions of the Kingdom and began offering a comprehensive range of insurance products, including health insurance, vehicle insurance, property insurance, engineering insurance, and liability insurance, focusing on meeting the needs of individuals and small and medium-sized enterprises. As the sector evolved and competition intensified, Buruj turned to invest in digital transformation and adopt advanced technological solutions to facilitate policy sales and customer service, enhancing its operational efficiency and contributing to increased customer satisfaction. It can be said that Buruj's institutional development was a direct reflection of the regulatory and economic changes in the Saudi market, as the company managed to adapt to new capital requirements and successfully built a good reputation in claims management and compliance with solvency standards. These pillars formed the foundation that enabled Buruj to enter into strategic alliances, the latest being the merger with Medgulf, a step aimed at enhancing its competitive position and expanding its customer base in the local and regional market.

The organizational structure of Buruj Cooperative Insurance Company relies on a strict governance model that aligns with the requirements of the Saudi Central Bank (SAMA) and the regulations of the Saudi financial market (Tadawul). The company's board of directors consists of Saudi and Kuwaiti experts with extensive experience in insurance and financial services, where its strategic partner, Gulf Insurance Group, represents one of the main pillars in the ownership structure. Gulf Insurance Group holds a significant stake in Buruj's capital and plays an active role in shaping strategic policies and providing technical and administrative support, giving the company a competitive advantage in pricing, risk management, and reinsurance. Alongside Gulf Insurance Group, the shareholder structure includes local investors from both the public and private sectors, reflecting the confidence of the Saudi investment community in the company's ability to achieve sustainable growth and its commitment to sound governance standards. Under the board of directors, specialized committees such as the Audit Committee, Risk Committee, and Nominations and Remuneration Committee are responsible for monitoring performance, controlling risks, and ensuring compliance with internal and regulatory policies. The company places great importance on developing its human resources, investing in continuous training and development programs to ensure employees keep up with the latest developments in the insurance industry. This robust structure has enabled Buruj to activate effective communication channels between the executive management, shareholders, and customers, enhancing its ability to respond quickly to regulatory and market changes. Additionally, Buruj benefits from Gulf Insurance Group's regional network, allowing it to enter into effective reinsurance agreements and exchange expertise with sister insurance companies in the Gulf and North Africa. These strategic partnerships extend beyond technical aspects to support digital transformation initiatives and adopt best global practices in document management, claims, and customer service. Under this integrated structure, Buruj has managed to achieve a balance between expansion ambitions and risk control, making it a trusted choice for a wide range of clients in both the individual and corporate sectors.

Buruj Cooperative Insurance Company, along with all insurance companies operating in the Kingdom, is subject to a strict regulatory framework overseen by the Saudi Arabian Monetary Authority (SAMA), which is now the Saudi Central Bank. This framework governs several laws and regulations aimed at enhancing transparency, market efficiency, protecting the rights of policyholders and shareholders, and ensuring the stability of the financial sector as a whole. Among the most important of these regulations is the cooperative insurance system, which mandates companies to operate under a participatory model that distributes part of the profits among shareholders and policyholders and emphasizes the necessity of maintaining sufficient financial reserves to meet claims and unexpected fluctuations. Regulations also require insurance companies to apply modern international accounting standards such as IFRS 17 and IFRS 9, necessitating companies to develop their financial and regulatory systems to meet new disclosure and governance requirements. SAMA imposes a minimum capital requirement on companies, conducting periodic tests of capital adequacy and liquidity, and controlling insurance reserve ratios to ensure the solvency of companies and their ability to meet their obligations to clients. Furthermore, regulations require the existence of independent oversight committees such as the Audit Committee and the Risk Management Committee, and impose restrictions on profit distribution, ensuring that at least 5% of capital is distributed in case of profits, while allowing companies to retain part of the profits to support reserves. Companies are also required to disclose their financial performance and material announcements periodically through the Saudi financial market (Tadawul), enhancing sector transparency and providing investors and observers with a clear picture of each company's performance. The regulations keep pace with technological developments by supporting digital transformation and facilitating the electronic sale of policies while imposing strict standards on information security and customer data protection. This evolving regulatory environment aims to enhance confidence in the Saudi insurance sector and make the market more attractive for local and foreign investment while protecting the interests of all stakeholders. The insurance sector today faces challenges in implementing new international standards and increasing capital requirements, prompting companies like Buruj to focus on operational efficiency and smart expansion to ensure sustainability amid increasing competition.

Buruj Cooperative Insurance Company offers a diverse range of insurance products targeting both individuals and businesses, enabling it to meet the needs of a wide customer base in the Saudi market. Among the most prominent of these products is vehicle insurance, which includes comprehensive insurance, third-party insurance, and vehicle transport insurance, contributing to meeting the growing demand resulting from the mandatory vehicle insurance in the Kingdom. Additionally, medical and health insurance products stand out, covering individuals, families, and institutions, providing solutions compliant with the mandatory health insurance requirements imposed by regulatory authorities on all private sector employees. Moreover, Buruj offers property and facility insurance, which protects properties and warehouses from fire, earthquakes, and natural disasters, also including compensation for goods and fixed assets. In the engineering sector, Buruj plays a significant role through insurance for construction projects, heavy equipment, and factory installations, supporting contracting companies and major projects in the Kingdom. The product portfolio also includes marine and aviation insurance, covering the transport of goods, ships, and aircraft, which is increasingly important with the expansion of Saudi mega-projects such as NEOM and the Red Sea Project. Liability insurance encompasses civil and professional liability and errors and omissions insurance, providing legal protection for companies and individuals against lawsuits and compensations. Buruj continuously works on developing specialized products such as electronic device insurance, cyber risk insurance, and energy insurance to keep pace with the economic and technological transformations in the Kingdom. The company relies on a network of agents, branches, and advanced electronic services to distribute its products, focusing on facilitating underwriting processes and claims settlement, enhancing customer satisfaction. Buruj is keen to update its insurance documents in line with international standards and regulatory requirements, enabling it to compete in a rapidly changing market with increasing demand for innovative and flexible insurance solutions.

Buruj Cooperative Insurance Company witnessed stable and resilient financial performance during 2024 and 2025 despite economic challenges and competitive pressures in the Saudi insurance sector. The total written premiums of the company increased moderately compared to the previous year, due to increased insurance coverage in the vehicle and health categories, which are among the most demanded lines of insurance in the local market. According to published financial data, Buruj maintained annual net profits in the range of tens of millions of Riyals, a level close to what it achieved in 2023, reflecting effective cost management and underwriting risk control. The company's paid capital reached 150 million Saudi Riyals distributed over 15 million shares, while the estimated market value reached approximately 2 billion Riyals by mid-2025. This means that the company's stock was trading at around 19 Riyals during that period, with a price-to-earnings (P/E) ratio ranging between 12 and 15 times, a rate considered moderate in the Saudi insurance sector. Buruj adopted a conservative dividend distribution policy, distributing no less than 5% of the capital annually, in compliance with the requirements of the Saudi Central Bank, which constituted a modest annual return for shareholders. It is noted that the company retains part of its profits to bolster capital and reserves, ensuring its financial solvency and ability to meet future claims. Despite limited dividends compared to some major companies, Buruj's financial stability has enabled it to continue its operations efficiently and develop its products and services. In the first half of 2025, financial performance showed a slight improvement in profitability due to reduced administrative expenses and increased investment income, indicating the company's ability to adapt to economic changes and regulatory transformations such as the implementation of IFRS 17 standards. These moderate financial indicators reflect the operational strength of Buruj's management and its commitment to achieving a balance between growth and sustainability in a competitive work environment.

Buruj Cooperative Insurance Company represents one of the companies listed in the insurance sector of the Saudi financial market (Tadawul), where its shares are traded under the symbol 8270. By mid-2025, the stock price reached approximately 19 Riyals, reflecting a total market value estimated at around 2 billion Riyals, considering the paid capital of 150 million Riyals distributed over 15 million shares. The performance of Buruj's stock is characterized by relative stability compared to many other insurance companies, maintaining a moderate trading range despite some fluctuations experienced in the market during periods of recession or recovery. The stock's price-to-earnings (P/E) ratio is around 12 to 15 times, a reasonable rate reflecting average profitability and future growth expectations in the sector. Buruj features relatively low trading liquidity, with approximately 30% of the capital being traded, which may pose a challenge for investors wishing to enter or exit the stock quickly. Nevertheless, the financial stability and conservative dividend policies have made the stock a preferred choice for investors seeking relative stability and moderate returns in the insurance sector. The stock movement is influenced by several factors, including the company's quarterly results, dividend announcements, and sector developments such as the implementation of new international accounting standards or announcements of strategic merger deals. The announcement of the merger agreement with Medgulf has reflected on the stock trading, witnessing notable activity due to increased investor interest and expectations for improved operational efficiency and enhanced competitive strength of the merged entity. It is important to emphasize that investing in Buruj's stock, as with all stocks, is subject to general market factors, the company's financial performance, and its future policies, and it is advisable to stay updated with the company's official reports and announcements through the Tadawul platform to ensure informed decision-making based on accurate and updated information.

The analysis of Buruj Cooperative Insurance Company's financial indicators reflects its stable financial position and balanced growth compared to the sector average. The company's paid capital stands at 150 million Saudi Riyals distributed over 15 million shares, providing it with a solid capital base that complies with the minimum capital requirements in the Saudi insurance sector. According to mid-2025 data, the estimated market value of the company reached approximately 2 billion Riyals, meaning that the stock trades in the range of 19 Riyals per share. The price-to-earnings (P/E) ratio ranges from 12 to 15 times based on the annual net profits that reached tens of millions of Riyals in 2024, a moderate rate reflecting the company's size and the level of risks in the sector. Buruj adopts a conservative dividend distribution policy, committing to distribute no less than 5% of the capital annually in case of profits, in compliance with the requirements of the Saudi Central Bank, often slightly exceeding this minimum when profits allow. Annual dividends reached approximately 7.5 million Riyals, representing a cash return in the single digits percentage of the stock price. The company focuses on retaining a significant portion of its profits to support reserves and enhance financial solvency, reflecting its commitment to sustainability amid regulatory challenges and increased capital requirements resulting from the implementation of IFRS 17 and IFRS 9 standards. Additionally, Buruj maintains capital adequacy and liquidity ratios exceeding the standard threshold, enabling it to meet claims and unexpected market fluctuations. The return on equity (ROE) and return on assets (ROA) exhibit relative stability, reflecting the company's ability to achieve stable profits without risking capital. These financial indicators reflect a balanced policy aimed at achieving sustainable growth while maintaining a low-risk level, making Buruj an attractive option for a specific segment of investors in the Saudi insurance sector.

The insurance sector in the Kingdom of Saudi Arabia operates in an increasingly competitive environment characterized by product diversity, high demand for health and mandatory insurance, and rising regulatory challenges. The sector includes major local and regional companies such as Tawuniya, Bupa Arabia, Medgulf, Wafa, and Al-Saqr, competing for an increasing market share due to heightened insurance awareness and the expansion of mandatory vehicle and health insurance coverage. Buruj Cooperative Insurance Company occupies a medium to small position compared to major competitors, but it stands out for its flexibility and ability to adapt to regulatory and economic changes. Among its main competitors is Tawuniya, the largest cooperative insurance company in Saudi Arabia with a massive market share and an extensive branch network, in addition to Medgulf, with which Buruj seeks to merge to enhance its competitive position. Buruj faces significant challenges in terms of capital size and geographical spread compared to larger companies, yet it compensates for this through operational efficiency, a focus on innovative products, and leveraging the expertise of Gulf Insurance Group in risk management and reinsurance. The planned merger with Medgulf is a strategic step aimed at consolidating the capital base, expanding the customer list, and exploiting economies of scale to reduce administrative and operational costs. The sector benefits from stable revenues generated by mandatory insurance, with additional growth opportunities in health insurance, major project insurance, and specialized insurance such as cyber and energy insurance. Conversely, it faces challenges such as intense price competition, rising claims costs (especially medical), and tightening regulatory oversight due to the implementation of new accounting standards and increased capital requirements. In this context, Buruj benefits from its flexibility and quick decision-making, but its future success largely depends on its ability to execute its merger strategy with Medgulf, develop digital products, and expand its customer base to keep pace with rapid changes in the sector.

The merger of Buruj Cooperative Insurance Company with Medgulf is one of the most significant strategic transformations in the Saudi insurance sector in recent years. The mandatory merger agreement between the two companies was announced in August 2025, as part of their efforts to form a larger and more competitive entity in the local market. This merger aims to unify the capital base and integrate assets and operational expertise, with expectations that the combined capital of the new entity will exceed 500 million Saudi Riyals, along with an expanded customer base and diversified insurance products. This larger size will provide greater capacity to cover major government projects, enhance regulatory confidence, and increase negotiating power with reinsurance providers. Operationally, the merger is expected to reduce administrative expenses by eliminating redundancy in functions and agencies, achieving economies of scale that enable improved profit margins in the long term. Buruj will also benefit from knowledge transfer and leverage modern information systems from Medgulf, enhancing its digital and operational capabilities. However, the merger carries challenges related to integrating work culture, restructuring operational systems, and unifying underwriting and customer service policies, which may cause temporary fluctuations in performance during the transition period. Completing all regulatory procedures and obtaining the necessary approvals from relevant authorities such as the Saudi Central Bank and the Capital Market Authority is required. The final procedures are expected to be completed in 2026, announcing the birth of a new insurance entity with greater financial resources, a broader customer base, and competitive advantages that enhance its growth potential in a rapidly transforming market. Overall, this merger is likely to contribute to improving Buruj's ability to achieve sustainable growth, expand its market share, and increase its attractiveness to local and international investors.

Buruj Cooperative Insurance Company, like other insurance companies in the Kingdom, faces a mix of challenges and strategic opportunities amid rapid economic and regulatory transformations. Among the most prominent challenges are the rising costs of medical claims due to increasing inflation in healthcare service prices, as well as strong price competition from larger companies that have extensive branch networks and greater negotiating power with healthcare providers. The implementation of international financial reporting standards (IFRS 17 and IFRS 9) poses an additional challenge, requiring the company to strengthen its financial reserves and develop its accounting systems to comply with the new global standards. Buruj also suffers from low stock liquidity in the market, with a trading ratio of only about 30% of capital, which may limit the stock's attractiveness to individual and institutional investors. At the governance level, there is a need to enhance operational efficiency and develop digital capabilities to keep pace with the digital transformation in the sector. Despite these challenges, the Saudi market opens wide growth prospects, especially with the expansion of mandatory vehicle and health insurance coverage and increased insurance awareness among individuals and businesses. Additionally, major government projects such as NEOM and the Red Sea Project provide opportunities for offering specialized insurance products in construction, energy, and infrastructure projects. InsurTech also emerges as a golden opportunity for Buruj to provide innovative digital insurance solutions through mobile applications and online platforms, enhancing its ability to reach new customer segments. The anticipated merger with Medgulf further enhances the company's expansion opportunities, cost reduction, and competitive strength. Overall, Buruj's ability to capitalize on these opportunities depends on its strategic flexibility, product development capabilities, and management efficiency in adapting to regulatory and market changes.

Buruj Cooperative Insurance Company has recognized for years the importance of digital transformation in developing its business and enhancing its competitiveness in the rapidly changing Saudi insurance market. The company has invested in developing advanced digital infrastructure, including launching online platforms for selling policies, managing claims, and providing customer services through online and smart applications. This digital transformation has enabled Buruj to accelerate underwriting processes, simplify claims procedures, and provide a seamless and quick experience for customers, increasing their satisfaction and loyalty to the brand. The company has also employed artificial intelligence and data analytics to improve pricing and risk management, helping it reduce loss ratios and improve profit margins. In terms of innovation, Buruj has focused on developing specialized insurance products that meet changing market needs, such as cyber insurance, electronic device insurance, and natural disaster insurance, benefiting from Gulf Insurance Group's expertise in providing innovative solutions in multiple markets. The company has been keen to adapt its insurance documents to comply with new regulatory requirements and global disclosure standards, enhancing its ability to meet the needs of customers and large enterprises. Additionally, digital transformation has been a crucial factor in improving internal control processes, combating fraud, and ensuring compliance with regulatory policies, as digital systems provide the ability to track and analyze all operations in real-time. Buruj plans to continue investing in smart solutions, such as offering insurance services via mobile phones, developing platforms for managing smart insurance documents, and expanding the use of Internet of Things (IoT) technologies to monitor insured assets and analyze risks more accurately. This digital and innovative approach enhances Buruj's ability to expand its customer base, attract new market segments, and achieve sustainable growth amid increasing competition and technological transformations in the sector.

Buruj Cooperative Insurance Company plays an important role in supporting the Saudi national economy by providing integrated insurance solutions that stabilize businesses and protect individuals and companies from potential financial risks. The company contributes to enhancing the mandatory health insurance system, supporting government efforts to develop the healthcare sector and expand insurance coverage to include all private sector employees. Buruj also provides specialized insurance products to support major projects in the Kingdom, such as infrastructure, energy, transportation, and construction projects, offering insurance coverage for contractors, heavy equipment, construction projects, and engineering risk insurance. The importance of marine and aviation insurance products is highlighted in supporting trade and import/export activities, especially as the Kingdom expands its massive logistics projects. The company is keen to collaborate with both the public and private sectors to design insurance solutions that meet the requirements of major national projects such as NEOM, the Red Sea Project, and new housing projects, contributing to reducing financial risks and ensuring business continuity. Through its dividend distribution policy and commitment to solvency standards, Buruj helps enhance investor confidence in the Saudi insurance sector and attract new capital to support the growth of the national financial sector. The company also supports localization programs and the employment of Saudi talents by providing training and professional development opportunities for local cadres, enhancing its contribution to achieving the goals of Saudi Vision 2030 in building a diverse and sustainable economy. Buruj is committed to participating in social responsibility initiatives and supporting innovation in the sector, making it an active partner in achieving economic and social development in the Kingdom.

Buruj Cooperative Insurance Company adopts a conservative dividend distribution policy that complies with the requirements of the Saudi Central Bank (SAMA) and the regulatory provisions of the cooperative insurance sector. The regulations stipulate the necessity of distributing at least 5% of the capital in case of annual profits, which the company has adhered to in recent years, with average annual dividends of approximately 7.5 million Riyals (from a capital of 150 million Riyals). Buruj is keen to maintain a significant portion of retained earnings to support financial reserves and enhance capital adequacy, enabling it to meet large claims or sudden market fluctuations. This policy arises from the company's recognition of the importance of complying with the new capital adequacy standards imposed by international financial reporting standards (IFRS 17 and IFRS 9), which require insurance companies to retain sufficient financial reserves to ensure their ability to meet obligations to policyholders and shareholders. Although dividend distributions are relatively limited compared to some large companies, this policy reflects the company's commitment to financial sustainability and maintaining a strong financial position amid regulatory challenges and intense competition in the sector. This policy also provides Buruj with greater flexibility in financing future expansions, developing new products, and investing in digital transformation without the need to resort to external financing or frequent capital increases. The company is keen to periodically review its distribution policy to ensure a balance between shareholder interests and the company's operational and investment needs.

Buruj Cooperative Insurance Company is committed to the highest standards of governance and regulatory compliance, in accordance with the regulations of the Saudi Central Bank (SAMA) and the requirements of the Saudi Capital Market Authority (Tadawul). The company's board of directors consists of members with extensive experience in the insurance and financial management sectors, and the company operates through specialized committees such as the Audit Committee, Risk Management Committee, and Nominations and Remuneration Committee to ensure effective oversight of operations and compliance with internal and external policies. Buruj adopts strict risk management policies that include identifying, assessing, and monitoring all types of operational, financial, and insurance risks, focusing on underwriting risk management and evaluating the company's ability to meet its obligations under all circumstances. The company is committed to applying international financial reporting standards (IFRS 17 and IFRS 9), and it works to update its accounting systems to comply with these standards, enhancing the transparency of financial disclosures and the accuracy of reports submitted to shareholders and regulatory authorities. Buruj also adheres to anti-money laundering and counter-terrorism financing policies, providing ongoing training programs for employees to ensure compliance with the latest regulatory requirements. The company places great importance on information security and customer data protection, implementing strict cybersecurity measures and regularly updating digital systems. Buruj is keen to foster a culture of compliance and transparency at all organizational levels through effective communication channels between executive management, the board of directors, and shareholders, ensuring a swift response to any regulatory changes or market developments. These policies reflect in the company's financial stability and positive reputation in the sector, making it a reliable choice for both customers and investors alike.

Continuous monitoring of Buruj Cooperative Insurance Company's performance is particularly important for investors and customers due to the changing nature of the insurance sector and the diversity of factors influencing the company's results. The company provides periodic quarterly and annual financial reports published through the Saudi financial market (Tadawul), which include detailed data on revenues, profits, expenses, liquidity, and financial reserves, along with clarifications on the most important operational and strategic developments. The company also issues official announcements when significant events occur, such as signing merger deals, changes in the board of directors, or adopting new dividend distribution policies, providing investors with a clear picture of the company's future trends. Local financial media and specialized sites such as Argaam, Al-Eqtisadiah, and News 24 cover the most important company updates, with analyses from financial experts regarding stock performance and sector forecasts. Buruj's official disclosures also include data on regulatory challenges, compliance procedures, and developments in digital transformation projects, helping investors assess the company's ability to adapt to changes in the regulatory and market environment. Investors are advised to always refer to official sources and verify report dates to ensure obtaining the latest information regarding the company's performance, as relying on outdated data or unreliable sources may lead to investment decisions not based on sound foundations. Buruj also provides direct communication channels with investors and customers through its website and customer service, facilitating inquiries regarding products, claims, or stock performance. In light of this, continuous monitoring of official reports and company announcements is a fundamental element in forming a realistic vision of Buruj Cooperative Insurance Company, especially amid the significant transformations currently taking place in the sector.