MediGulf Trading: Comprehensive Guide to Insurance in Saudi Market

Al-Mutamid Insurance and Reinsurance Cooperative Company, known as MediGulf, is considered a pioneer in the insurance sector in the Kingdom of Saudi Arabia. The company was established to provide cooperative insurance services, including general insurance (property, accidents, liability, vehicles, medical insurance) and Sharia-compliant insurance. The listing of the company's stock on the Tadawul under the symbol (8030) has granted it greater transparency and made it a target for monitoring by investors and specialists. MediGulf is subject to the supervision of the Capital Market Authority and the Saudi Arabian Monetary Authority (SAMA), ensuring its compliance with governance and disclosure standards. The company has a long history of dealing with both government and private sectors and plays a pivotal role in developing the Saudi insurance market, especially with the accelerated growth of the sector in response to the requirements of Vision 2030 and increased insurance awareness among individuals and companies. Its services cover various sectors such as oil, energy, and industry, giving it a broad customer base and enhancing its position among the largest insurance companies in Saudi Arabia.

MediGulf's stock is listed on the Saudi financial market (Tadawul) under the symbol (8030) and is classified within the insurance sector, attracting significant interest from both individual and institutional investors. The stock is available for trading on the main market and is subject to fluctuations associated with the company's financial performance and the sector as a whole. During 2024 and 2025, the stock experienced notable volatility due to a sharp decline in the company's profits, dropping from levels close to SAR 13 to below SAR 12, stabilizing in mid-January 2025 at around SAR 11.88. These market movements reflect investors' reactions to the company's results and their expectations for its future, especially with the announcement of merger plans with Burooj Insurance Company. The stock is characterized by medium to high liquidity and is directly affected by periodic announcements of financial results, sector developments, and news of mergers and acquisitions. Evaluating the stock and monitoring its developments is a fundamental step for anyone looking to understand the dynamics of the Saudi insurance sector.

MediGulf's financial results during 2024 and 2025 showed a significant decline in profits. The company recorded a net profit of approximately SAR 102 million at the end of 2024, a decrease of nearly 49% compared to the previous year. The results for the fourth quarter of 2024 showed profits of only SAR 3 million, a sharp decline of 95% compared to the same period in 2023. In the first nine months of 2024, profits amounted to around SAR 99 million, down 30% from the same period last year. These declines are attributed to multiple factors, including increased insurance claims, changes in market trends, and non-recurring actuarial costs. At the beginning of 2025, the decline continued with first-quarter profits down 25% compared to the same period last year. These figures reflect the challenges facing the sector and regulatory changes, especially with the implementation of the new International Financial Reporting Standards (IFRS 17), which also impacted the stock's profitability and other financial indicators.

The financial indicators for MediGulf's stock depend on the company's performance and market conditions. The stock price in mid-January 2025 was approximately SAR 11.88. Assuming the number of shares is 150 million, the market capitalization is estimated at around SAR 1.8 billion. The price-to-earnings (P/E) ratio has increased due to declining profits, and with decreasing profitability, the P/E ratio becomes higher, potentially exceeding the usual rates in the sector (10-20) temporarily. Regarding dividends, the company has not announced any distributed profits for 2024 or early 2025, due to declining profits and the company's need for liquidity to implement merger and expansion plans. Analyzing these indicators is essential for understanding the company's position and comparing it with its competitors in the insurance sector, as well as reflecting the company's ability to achieve future returns and distribute profits to shareholders if its results stabilize.

The insurance sector is one of the most dynamic financial sectors in the Saudi economy, characterized by high competitiveness with more than 35 licensed companies. MediGulf stands out as one of the major companies in the sector, competing directly with companies such as Tawuniya, Walaa, Malath, and Bupa Arabia. The sector is influenced by regulatory policies imposed by the Capital Market Authority and SAMA, focusing on capital requirements and protecting policyholders' rights. The increasing importance of mandatory insurance (medical and vehicle) has contributed to the growth of the market and the revenues of companies. The sector is also witnessing a significant digital transformation, with companies investing in electronic services and expanding digital distribution channels. MediGulf, for its part, seeks to keep pace with this transformation by developing modern products and expanding its customer base, giving it greater flexibility to face market challenges.

MediGulf faces fierce competition from other major insurance companies such as Tawuniya (the largest in terms of market share), Walaa Insurance, Malath, Bupa Arabia (specializing in health insurance), and Gulf Union. Competition in the sector is characterized by a concentrated market share held by a limited number of companies, while the remaining share is distributed among smaller or specialized companies. Competition is intense in traditional products such as health and auto insurance and is escalating with the evolution of digital products and cooperative insurance. Mergers and acquisitions play a pivotal role in changing the balance of power in the sector, as the merger between MediGulf and Burooj is expected to enhance its competitive capabilities, provide a broader customer base, and increase the diversity of insurance products offered.

MediGulf announced a plan to merge with Burooj Insurance Company in 2025 and obtained approval from the Capital Market Authority to raise its capital to SAR 300 million to complete the merger. This step aims to strengthen the financial power of the merged company, expand the customer base, and achieve economies of scale. The merger will contribute to reducing some operational costs and expanding the insurance portfolio, especially in engineering and construction sectors. It is expected that Burooj shareholders will contribute about 25% of the new capital. Although the merger may impose temporary costs and impact profitability in the short term, it could lead to improved financial position and increased market share for MediGulf in the medium to long term, enhancing its standing against competitors in the Saudi insurance sector.

MediGulf has witnessed several significant developments over the past two years, most notably the announcement of the commencement of the creditor objection period regarding its merger with Burooj and the approval of the Capital Market Authority to increase capital. The company has also signed new insurance contracts with government and industrial entities as part of its strategy to diversify income sources and increase revenues. Conversely, negative news focused on the decline in profits in 2024 and challenges related to claims costs and regulatory changes. The company also faced pressure from the application of the new IFRS 17 standards, which affected its financial results. On the other hand, these developments are expected to yield significant performance improvements in the medium term if the merger succeeds and the digital and financial transformation is completed.

Cooperative insurance companies in Saudi Arabia typically distribute a portion of their profits to shareholders when they achieve positive and stable financial results. For MediGulf, no dividends have been announced for 2024 or early 2025 due to declining profits and the need to retain liquidity to support merger and expansion plans. In years when the company achieves stable profits, the general assembly approves the distribution of a portion of the profits after the board's approval. Future distribution decisions will depend on the recovery of profits after the completion of the merger with Burooj and the improvement of operational results. Shareholders should monitor the company's official announcements regarding distributions, knowing that the distribution policy is subject to market variables and the company's financial needs.

MediGulf has several opportunities, the most prominent being the increase in market share after the merger, improving operational efficiency due to economies of scale, and benefiting from the growing demand for insurance in the Kingdom due to Vision 2030. Additionally, the ongoing digitization of services may enhance the company's competitiveness and reduce operational costs. Challenges include continued pressure from insurance claims, ongoing regulatory changes, the potential increase in required reserves, and heightened competition in core products. Furthermore, the merger process with Burooj carries some risks, such as consolidation costs and transition periods, which may temporarily affect profitability and liquidity. The company's ability to overcome these challenges depends on management efficiency and responsiveness to sector changes.

MediGulf's financial performance directly influences investor trends in the Saudi financial market. The sharp decline in profits in 2024 and the stock's volatility prompted some investors to reassess their positions in the stock. Conversely, others see the merger plan and the expansion of the customer base as an opportunity for performance improvement in the medium term. Investors' decisions depend on monitoring quarterly reports, company announcements, and analyzing risks and opportunities. MediGulf's commitment to transparency and disclosure, along with its future strategy, plays a role in restoring market confidence and enhancing the stock's attractiveness. Investors should always consult a licensed financial advisor before making any decisions related to buying or selling stocks.

The Saudi Capital Market Authority (CMA) and the Saudi Arabian Monetary Authority (SAMA) oversee the regulation of the insurance sector, imposing strict standards on insurance companies to ensure the protection of policyholders' rights and achieve financial stability. These regulations include capital requirements, periodic disclosures, the application of international accounting standards, and governance policies. The sector has witnessed the implementation of IFRS 17, leading to changes in the way profits and reserves are calculated, imposing greater transparency on financial results. The authority also encourages mergers and acquisitions to strengthen the sector's robustness, which is reflected in MediGulf's merger with Burooj. These regulations play a crucial role in enhancing market efficiency and reducing systemic risks.

According to data announced until January 2025, the price of MediGulf stock was around SAR 11.88. The company's market capitalization is estimated at approximately SAR 1.8 billion (based on 150 million shares). The company's net profit for 2024 was around SAR 102 million, while the P/E ratio declined due to the drop in profits and may exceed 17-18 under current conditions. No dividends have been announced for 2024, and that remains contingent on performance improvement. The company's revenues have fluctuated with declining profits, reflecting on the stock's performance on Tadawul. These indicators highlight the importance of continuously monitoring the company's financial developments to understand the stock's dynamics in the market.

MediGulf aims to strengthen its position in the Saudi market by completing its merger with Burooj Insurance, developing its insurance products, and expanding its customer network. The company also focuses on investing in digital transformation to facilitate services and reduce costs. Among its goals are increasing market share in health and vehicle insurance, improving operational efficiency, and raising reserves and assets. The company is also exploring new expansion opportunities, whether through partnerships or innovative products. Its distribution plans depend on performance results, with a commitment to disclosure and governance policies. The success of the merger and achieving financial stability are essential conditions for the company to return to a growth path and provide rewarding dividends to shareholders in the future.