SAND: Comprehensive Overview of SAND Cooperative Insurance

SAND Cooperative Insurance is a Saudi company that was previously listed on the Saudi financial market (Tadawul) under the symbol 8090. SAND was established to provide Islamic cooperative insurance (Takaful) services in accordance with Sharia principles, where participants share risks and profits and losses according to the Takaful system. The company is headquartered in Riyadh and covers a wide range of commercial insurance services such as general insurance (property, liability, transportation, marine insurance, etc.) in addition to reinsurance services. Since its inception, SAND has focused on the corporate and institutional sector, diversifying its insurance portfolios to include industrial and commercial products. SAND is supervised by the Saudi Capital Market Authority and complies with the requirements of the Saudi Arabian Monetary Authority (SAMA) and financial solvency and governance standards.

SAND Cooperative Insurance covers a wide range of insurance products, including general insurance: property insurance (against fire and disasters), liability insurance, transportation and shipping insurance, marine insurance, and contractor and engineering project insurance. The company also provides reinsurance services, redistributing part of its risks to local and global reinsurance companies. Its model is based on Islamic cooperative principles, where any insurance surplus (if any) is distributed among participants after deducting expenses and claims. SAND primarily targets clients from the commercial and industrial sectors, with tailored services for medium and large projects.

SAND Cooperative Insurance operates through a board of directors comprising a select group of experts in the financial and insurance sectors, alongside an executive team specialized in managing insurance operations, risks, claims, and finance. The company relies on internal policies based on governance systems imposed by the Capital Market Authority and SAMA, with a commitment to transparency and disclosure standards. Its operations are subject to periodic reviews by external auditors and Sharia auditors to ensure compliance with Islamic law and the regulations governing cooperative insurance in the Kingdom.

SAND experienced fluctuating financial performance during 2024 and 2025. The stock price in the last reliable session was approximately 18.78 SAR, down from its peak (28.40 SAR in January 2025) and above its lowest point (18.01 SAR in mid-2025). The company's market capitalization was estimated between 2 and 2.5 billion SAR. The price-to-earnings (P/E) ratio was high or undefined in several periods due to declining or negative earnings, reaching sometimes over 50 or turning negative. The company did not announce any cash dividends in 2024 and 2025, resulting in a zero dividend yield. Revenue growth was approximately below 5% annually, with fluctuations in net profit, occasionally turning to losses due to rising claims and changes in accounting standards (IFRS 17).

In December 2025, the Saudi Capital Market Authority announced the decision to delist SAND’s shares from the financial market after reviewing the company's status and finding it did not meet the requirements for continued listing. The decision was based on protecting investors and regulating the sector, leading to SAND's shares being removed from trading by the end of 2025. This decision sparked discussions about the company's future and the possibilities of restructuring or acquisition. The delisting is a regulatory measure aimed at achieving stability in the insurance sector, especially amid the regulatory changes and challenges faced by the company in achieving sustainable profits in recent years.

Saudi insurance companies, including SAND, began implementing the new international accounting standard IFRS 17 starting in 2023. This change altered the way revenues are recognized and insurance reserves are recorded, directly affecting the company's profits. In SAND's case, reserve burdens increased and led to reduced profits or losses in some periods. The new standards also imposed the necessity to enhance financial solvency, prompting SAND to retain profits and not distribute them to meet capital and reserve requirements. This contributed to a rise in the P/E ratio and the absence of dividends from the company in 2024-2025.

The insurance sector in the Kingdom of Saudi Arabia is one of the vital sectors experiencing gradual growth, supported by Vision 2030 initiatives. The sector includes over 30 insurance companies, ranging from major companies like Cooperative Insurance, Malath, and Arab Shield to medium and small companies like SAND. SAND competes in the medium-sized company category, primarily covering commercial and industrial products. The sector is characterized by a highly competitive environment, with pressure on profit margins due to rising claims and evolving regulatory frameworks. Growth opportunities remain, especially with the mandatory expansion of insurance (health, vehicles, cyber insurance), but profitability is subject to market challenges and ongoing regulatory adjustments.

The performance of SAND shares fluctuated between increases and decreases over the past two years, reaching its highest level at the beginning of 2025 (28.40 SAR), before declining to 18.78 SAR by the end of 2025. These fluctuations reflected the challenges faced by the company regarding profit growth, rising claims, and the implementation of new accounting standards. The stock was also affected by the delisting decision, as it became outside official trading by the end of 2025. From a financial market perspective, SAND's shares are classified among medium-sized companies in the insurance sector and have undergone price fluctuations linked to financial results and regulatory news in the sector.

SAND's Q4 2024 results showed a slight improvement in total written premiums by 3-5% compared to the same quarter in 2023, supported by expansion in marine and engineering insurance. However, operating margins remained under pressure due to rising claims and reinsurance costs, leading to continued net losses or limited profits. Annual revenue growth was around 4-6%, while net profit declined by 20-30% compared to the previous year. This was primarily attributed to the implementation of IFRS 17 and intensified competition in the sector, affecting the company's profitability and ability to distribute dividends.

SAND competes with leading companies in the Saudi insurance sector, including Cooperative Insurance (symbol 8010), United Cooperative Insurance (1140), Malath Insurance (8030), Arab Shield (8250), and Salama. These companies often excel in premium volume, product diversity, and financial capacity. While SAND focuses on specific products such as marine and industrial insurance, larger companies expand across all types of insurance, including health and vehicles. The sector is characterized by close financial performance among companies, but each company retains unique competitive advantages based on its market strategy and risk management experience.

In 2024, SAND did not experience significant changes in ownership structure or major mergers, unlike some other companies in the sector. However, media reports indicated the possibility of mergers or acquisitions of medium and small companies by larger firms to improve operational efficiency and financial solvency. Following the delisting decision, SAND may consider restructuring or being acquired by larger entities, especially as the sector moves towards enhancing competitiveness and capital efficiency. These possibilities remain subject to regulatory authority decisions and shareholder approvals.

The Saudi insurance sector is subject to dual supervision by the Capital Market Authority (CMA) and the Saudi Arabian Monetary Authority (SAMA). Regulatory authorities have imposed strict rules on financial solvency, transparency, and governance, along with the implementation of IFRS 17 from 2023. These regulations aim to protect the rights of clients and investors and ensure the sustainability of companies. Capital and reserve requirements have also been strengthened, impacting companies' dividend distribution policies. In recent years, the authority has encouraged mergers and acquisitions among small and medium companies to improve efficiency and strengthen the sector.

SAND faces several challenges, the most prominent being profitability pressures resulting from rising claims, intensified competition, and regulatory changes. The delisting decision necessitates a reevaluation of the business model and the potential for restructuring or merging. Nevertheless, there are still growth opportunities in specialized insurance sectors such as marine and industrial insurance and leveraging digital transformation in providing insurance services. The company's continued presence in the market depends on its ability to enhance financial solvency, improve risk management, and meet regulatory requirements. Its future as a private company or part of a larger entity is linked to the decisions of owners and regulatory authorities.

SAND is committed to the principles of Islamic cooperative insurance, where participants share risks and distribute any insurance surplus (if any) according to Takaful systems. The company seeks to develop Sharia-compliant products and provide a transparent and fair financial environment for shareholders and clients. A Sharia supervisor reviews contracts and products to ensure compliance with Sharia provisions. SAND has contributed to promoting the concept of cooperative insurance in the Saudi market, alongside raising financial awareness about the importance of insurance in protecting individuals and institutions from commercial and industrial risks.