Saudi United Cooperative Insurance Company: Comprehensive Performance Analysis

The Saudi United Cooperative Insurance Company was established in May 2008 and officially commenced its operations in January 2009. Its establishment was a response to developments in the Saudi insurance market, where the Kingdom witnessed qualitative transformations in the regulatory and economic environment, paving the way for the growth of cooperative insurance companies and the modernization of business models. The company inherited its operational portfolio and expertise from its previous main shareholder, UCA Insurance, which had a presence in the Saudi market for over 35 years, providing the new entity with a strong base of knowledge and ready operations.

Since its inception, the company has focused on meeting local market needs by offering innovative insurance solutions compliant with Sharia guidelines, in line with the cooperative insurance system adopted in the Kingdom. Over the past decade, the company has undergone several regulatory updates and changes in capital requirements, impacting its growth and expansion strategies. With the implementation of policies from the Saudi Arabian Monetary Authority and the Insurance Supervision Authority, the company has had to keep pace with changes such as the application of International Financial Reporting Standards (IFRS 17), adapting its accounting and administrative operations to ensure transparency and full compliance.

Key milestones in the company's development include obtaining the necessary licenses to market various insurance products, expanding its branch network, and developing digital infrastructure and customer services. It has faced challenges related to regulatory compliance at times, which has sometimes reflected on its financial performance or its ability to issue certain policies. However, the company has managed to maintain a stable capital structure of 400 million Saudi Riyals distributed over 40 million shares, indicating its relative stability despite changes in the sector.

This historical background highlights the company's importance in the Saudi cooperative insurance landscape and its role in transferring accumulated expertise to a sector characterized by dynamism and fierce competition. Today, the company is one of the recognized players, though not the largest, it possesses a diverse record and rich experience in dealing with local market demands and regulatory challenges.

The authorized and paid capital of Saudi United Cooperative Insurance Company is a cornerstone of its financial stability and ability to meet regulatory requirements. The current capital stands at 400 million Saudi Riyals, distributed over 40 million shares with a nominal value of 10 Riyals per share, a structure that has remained unchanged since its establishment according to the latest official disclosures up to 2025. This stability in capital reflects the company's cautious strategy in managing financial resources, especially within an insurance sector characterized by profit volatility due to changing claims and unstable investments.

The main shareholder at the time of establishment was UCA Insurance, which transferred its expertise and portfolio to the new company, providing it with an early customer base and operational strength. Although the company has not recently announced the presence of new strategic shareholders with stakes exceeding 5%, its shareholder base includes individual investors, institutions, and various investment funds. The composition of shareholders is subject to periodic oversight by the Capital Market Authority to ensure transparency and compliance with regulations.

The capital structure is particularly significant in light of the requirements of the Monetary Authority and the Insurance Authority, which require companies to maintain minimum capital and reserves to support their ability to pay claims and ensure sustainability. Maintaining adequate capital provides the company with the flexibility to expand or face market shocks, especially with changes in regulations such as the application of IFRS 17 or updates to solvency requirements.

Despite the stability of the capital structure, the company faces challenges in increasing or changing its capital in the future if it merges with other companies or regulatory requirements necessitate it. Any change in the shareholder composition or capital usually has a direct impact on the company's market valuation and analysts' expectations for its future performance. Thus, it appears that the company builds its financial strategy on discipline and continuity, while monitoring opportunities for alliances or expansion when necessary.

Saudi United Cooperative Insurance Company offers a comprehensive range of insurance products that cover most needs of individuals and businesses, excluding life and savings insurance products. The company's focus is on general insurance, health insurance, and specialized insurance such as engineering, marine, and energy insurance, granting it flexibility in targeting a wide range of customers and meeting the requirements of different economic sectors.

The company's services include property insurance against fire, theft, and natural disasters, accident and personal injury insurance, liability insurance (such as professional, medical, and industrial liability), as well as group and individual health insurance for individuals and institutions, marine insurance for shipments and vessels, air transport insurance, and engineering insurance covering construction and infrastructure projects. The company also offers specialized insurance for the energy and electricity sector, which is a competitive advantage, especially given the expansion of energy projects in the Kingdom.

The delivery of these products is managed through a network of branches spread across major cities, supported by a team of qualified staff with experience in marketing insurance services and providing customer support. The company has also developed modern technological solutions to facilitate underwriting processes and claims submission, contributing to enhancing the customer experience and improving operational efficiency.

Insurance products are designed in accordance with the regulations of the Monetary Authority and the Insurance Authority to ensure compliance with Sharia and regulatory guidelines. All documents are subject to periodic review and updates to keep pace with market requirements and customer expectations. Although the company does not offer protection and savings insurance, its focus on general insurance allows it greater flexibility in managing risks and adapting to market changes. This wide range of products enables the company to target various sectors, from individuals to large corporations, enhancing its position within the Saudi insurance sector.

The headquarters of Saudi United Cooperative Insurance Company is strategically located in Riyadh, the capital of the Kingdom, to manage its operations. Riyadh is the heart of the financial and insurance industry in the Kingdom, providing the company with the advantage of proximity to regulatory and supervisory authorities, as well as ease of communication with major clients from government and private institutions.

The company has not limited itself to the capital but has worked since its establishment to expand its branch network to cover most major cities in the Kingdom such as Jeddah, Dammam, Khobar, Mecca, Medina, and Qassim, in addition to other densely populated or economically significant areas. This geographical spread allows the company to serve a diverse customer base, facilitate timely insurance services and claims, and respond to local needs professionally and effectively.

The company's success in geographical expansion relies on developing technological infrastructure and training human resources to provide the best insurance solutions across all branches. The company relies on advanced call centers and an electronic document and claims management system, ensuring speed and efficiency in dealing with customers from various parts of the Kingdom.

The branch network is a crucial factor in enhancing the company's relationship with its clients, enabling it to build long-term relationships with government and private institutions and individuals, and provide tailored insurance solutions that meet local needs. Additionally, the geographical spread contributes to increasing the company's market share and facing intense competition in the Saudi insurance sector.

Thanks to this spread, the company has become capable of competing in government tenders and major projects that require a physical presence in several regions, while also enhancing its ability to respond quickly to market developments or local disasters, reflecting the company's flexibility and strong field presence.

The success of Saudi United Cooperative Insurance Company relies on a comprehensive organizational structure that ensures efficient management of operations and directs resources towards achieving strategic goals. The administrative structure consists of a board of directors overseeing general policies and monitoring executive performance, along with specialized committees such as the Risk Committee, Audit Committee, and Nomination and Remuneration Committee, all of which are subject to oversight by regulatory authorities and comply with modern governance standards.

On the executive management side, the company is led by a management team with extensive experience in the local and international insurance sector, including directors specialized in underwriting, risk management, claims, information technology, human resources, and finance. Recently, the company has witnessed changes in leadership, including the resignation of the CEO in 2024, prompting the board to manage the transitional phase and directly oversee operational activities until a new leadership is appointed. Such changes represent a challenge for companies, but they also provide an opportunity to restructure strategies and enhance operational efficiency.

The company places utmost importance on governance and transparency, committing to accurate disclosure of significant administrative decisions and changes in leadership positions, in accordance with the regulations of the Capital Market Authority. The executive management also seeks to enhance a culture of performance and professional motivation among employees through training and development programs, aimed at improving the efficiency of staff and fostering innovation in service delivery.

The management faces challenges such as updating accounting systems to align with international standards (IFRS 17), improving risk management processes, and ensuring full compliance with regulatory requirements. A strong and flexible management team is a key element in the company's ability to adapt to rapid changes in the Saudi insurance sector and ensure business sustainability while achieving long-term strategic goals.

The Saudi insurance sector, in general, and the Saudi United Cooperative Insurance Company, in particular, are subject to strict supervision by two main institutions: the Saudi Arabian Monetary Authority (SAMA) and the Insurance Supervision Authority. These entities aim to ensure the safety of the financial sector, protect the rights of policyholders, and apply the best international standards in governance and transparency.

The cooperative insurance system in Saudi Arabia is limited to offering products compliant with Sharia guidelines, requiring companies to manage premium funds collectively, where surpluses are used to support reserves rather than as dividends for shareholders. This imposes strict standards on companies regarding risk management and reserve allocation, with a necessity to maintain an adequate solvency ratio to meet claims.

The regulatory environment has witnessed notable developments in recent years, most notably the implementation of International Financial Reporting Standards (IFRS 17), which requires high transparency in presenting revenues, reserves, and risks. This step has imposed accounting and administrative challenges on companies, especially small and medium-sized ones, as it necessitated updating systems and practices and reassessing accounting policies. Regulatory compliance procedures have also been enhanced, with penalties or temporary suspensions imposed on issuing certain documents upon discovering violations or deficiencies in compliance.

The regulatory environment also includes periodic disclosure requirements, where companies must publish detailed quarterly and annual financial reports, including financial performance, risks, and significant developments. The law requires companies to obtain prior approvals when introducing new products or changing capital structures. This strict regulatory framework contributes to the stability of the sector and protects customer rights, but at the same time poses an ongoing operational challenge for companies seeking growth or expansion.

This regulatory environment has a direct impact on the strategy of Saudi United Cooperative Insurance Company, which continuously seeks full compliance and updates its operations to keep pace with the regulations of the Monetary Authority and the Insurance Authority.

The financial performance of Saudi United Cooperative Insurance Company reflects the nature of the insurance sector in the Kingdom, characterized by fluctuations in revenues and profits due to various operational and market factors. According to preliminary financial data for the period ending March 31, 2024, the company experienced revenue fluctuations compared to the previous year, attributed to changes in healthcare costs, an expanding customer base, and changes in insurance portfolios.

The authorized and paid capital is 400 million Saudi Riyals, distributed over 40 million shares. Based on the current share price of 4.33 Riyals, the company's market capitalization is estimated at approximately 174 million Saudi Riyals, which is relatively low compared to major insurance companies in the market. The company has not announced regular dividend distributions in 2024 and 2025, as it tends to direct any surplus to meet solvency requirements and enhance reserves to address future claims.

Reports for the first half of 2025 indicate continued fluctuations in financial performance, with an increase in total written premiums due to the rise in the number of issued policies. However, the reserve-to-premium ratio remained high, reflecting challenges in controlling claims or changes in the insurance portfolio. The price-to-earnings ratio (P/E) is often inaccurate or negative during certain periods due to recording losses or unstable profits, making it difficult to rely on as a key indicator for stock valuation.

Overall, financial analysis shows that the company faces difficulties in achieving sustainable net profit due to high claims and operating costs, in addition to intense competition in the sector. However, the stability of capital and commitment to regulatory requirements provide the company with the ability to continue operations with the potential for performance improvement if operational and administrative challenges are addressed. The evaluation of the company's financial performance remains linked to its ability to control claims, improve risk management, and capitalize on growth opportunities in the sector.

The stock price of Saudi United Cooperative Insurance Company (stock symbol: 8190) is an important indicator of the company's position in the Saudi financial market and investor sentiment regarding its performance. In the latest closing data, the stock is trading around 4.33 Saudi Riyals, which is relatively low compared to shares of major insurance companies in the market. This price, along with a fixed capital of 40 million shares, reflects a total market capitalization of approximately 174 million Saudi Riyals.

This market capitalization represents a small portion of the total Saudi insurance market, indicating that the company falls within the small to medium-sized company segment in the sector. The stock price is influenced by several factors, including quarterly financial performance results, regulatory disclosures, and business developments (such as mergers or temporary suspensions of document issuance). The stock has experienced notable fluctuations during 2024 and 2025 due to disclosures about volatile financial results, temporary regulatory decisions, and announcements of potential partnerships or mergers.

It is noteworthy that the price-to-earnings (P/E) ratio is often unstable or negative due to the company recording losses or unstable profits. The company has also not announced regular cash dividends in recent years, as any surplus is directed to enhance reserves and support financial solvency. This approach affects the attractiveness of the stock to investors seeking periodic returns.

Investors closely monitor any significant developments in the company, such as merger announcements or regulatory compliance resolutions, as they have a direct impact on stock price and market confidence. The stock valuation remains contingent on the company's ability to improve financial performance, ensure regulatory compliance, and seize growth opportunities in the expanding insurance market in the Kingdom. Investors are always advised to review financial data and official disclosures before making any investment decisions.

The cooperative insurance sector in the Kingdom of Saudi Arabia constitutes one of the pillars of the non-banking financial system, characterized by steady growth driven by economic reforms and national transformation programs. This sector includes over 30 joint-stock companies competing to offer a variety of products including health insurance, vehicle insurance, general insurance, marine and engineering insurance, and energy insurance. All companies are subject to strict oversight from the Saudi Arabian Monetary Authority and the Insurance Supervision Authority.

Saudi United Cooperative Insurance Company competes in this sector alongside major companies such as Waqaya Insurance, Al-Muwasat Insurance, Brol Insurance, Alinma Tokio Marine, and National Insurance. Each of these companies has a varying market share and specializes in certain products or sectors. For instance, Waqaya and Al-Muwasat excel in health insurance, while Brol is known for property and major project insurance, and Alinma Tokio Marine excels in specialized insurance.

Companies face common challenges, most notably the implementation of International Financial Reporting Standards (IFRS 17), rising capital and reserve requirements, increased regulatory compliance scrutiny, and price competition pressures. The sector is also affected by fluctuations in the Saudi economy, government spending, infrastructure projects, and the growing demand for mandatory health insurance.

This competitive environment places pressure on small and medium-sized companies like Saudi United, which must improve operational efficiency, control costs, and develop products to attract customers. Additionally, mergers and strategic alliances can present opportunities to enhance market share and increase operational efficiency. Conversely, any failure in regulatory compliance or a decline in financial performance may lead to a loss of market confidence and a decrease in market capitalization.

Thanks to this competition, the Saudi insurance sector has become more mature and transparent, with an increasing focus on digital innovation and service development to meet the aspirations of corporate and individual customers.

During the period from 2024 to 2025, Saudi United Cooperative Insurance Company witnessed a series of significant developments that impacted its performance and market position. Among the most notable events was the company's announcement of signing a memorandum of understanding with the Arab Cooperative Insurance Company to study the feasibility of a potential merger between the two entities. This step aims to unify resources, enhance market share, and improve operational efficiency, representing a strategic move that could reshape the competitive landscape in the sector if completed.

Conversely, the company received a letter from the Insurance Supervision Authority at one point to suspend the issuance or renewal of certain mandatory insurance documents, such as health insurance for certain categories and vehicle insurance, due to regulatory violations. The company quickly moved to address these violations and cooperate with regulatory authorities to regain compliance, reflecting its commitment to correcting its course and maintaining its reputation in the market.

The company also experienced changes at the executive management level, with the announcement of the CEO's resignation without an immediate replacement, prompting the board to directly oversee operational activities during the transitional phase. Such changes may create a temporary state of uncertainty, but management has confirmed its commitment to business continuity and continuous improvement.

On the financial performance front, preliminary results for the first quarter of 2024 and the first half of 2025 showed fluctuations in revenues and an increase in total written premiums, amid ongoing challenges related to high claims and operating costs. These developments indicate a dynamic working environment that requires a swift and effective response from management to ensure sustainability and adapt to regulatory and market transformations.

Overall, these events place the company under scrutiny and motivate it to make strategic decisions to improve performance, whether through alliances or addressing regulatory shortcomings, keeping investors and analysts on alert for any future developments.

Like other insurance companies in the Kingdom, Saudi United Cooperative Insurance Company faces significant challenges due to regulatory transformations and the implementation of International Financial Reporting Standards (IFRS 17). This new standard, which recently came into effect, imposes fundamental changes on insurance companies regarding revenue recognition, liability assessment, reserve presentation, and financial reporting.

IFRS 17 requires greater transparency in disclosing insurance contracts, necessitating the separation of premium revenues from actual profits and determining reserves based on contract risks rather than merely written premiums. This shift has placed pressure on accounting operations, forcing the company to update its digital systems, train employees, and contract with accounting experts to align reports with the new standards. Additionally, IFRS 17 poses challenges in interpreting financial results for investors, as the figures have become more complex and less straightforward than before.

Moreover, regulatory requirements mandate companies to maintain high solvency ratios and increase reserves to address unexpected claims. Sometimes, increased regulatory scrutiny can lead to a temporary suspension of issuing certain products or require the company to rectify its situation before resuming activity, which has indeed happened to Saudi United at previous times.

These challenges affect the company's flexibility in launching new products or rapid expansion, forcing management to adopt more conservative financial policies. While IFRS 17 enhances market confidence and protects customer rights in the long term, the costs of transformation and the temporary impacts on financial results may exert pressure on small and medium-sized companies. Conversely, companies that successfully adapt to these regulatory requirements gain a competitive advantage and become more capable of attracting both investors and customers.

Digital transformation has become a strategic necessity for insurance companies in Saudi Arabia, including Saudi United Cooperative Insurance Company, to keep pace with customer requirements and market developments. In recent years, the company has invested in developing its digital infrastructure, enhancing document and claims management systems, and providing electronic services through its official website and mobile applications. These initiatives aim to accelerate underwriting processes, facilitate claims submission, and improve the customer experience.

The company relies on advanced information systems to manage customer data, product pricing, and claims monitoring, contributing to reducing errors and improving operational efficiency. It also provides an electronic portal that allows customers to purchase policies, view insurance details, and submit claims electronically without the need to visit branches. This digital transformation has helped the company maintain business continuity during pandemic periods and meet the growing demand for digital services.

The company faces challenges in this path, most notably the need to continuously update systems to keep pace with cybersecurity developments and ensure the protection of customer data from breaches or leaks. It also requires training human resources to utilize new technologies and developing innovative solutions to compete with large companies that heavily invest in modern technologies.

The importance of digital transformation also lies in the ability to analyze big data and leverage it to develop customized products and accurately assess risks. The company is expected to continue enhancing its technological investments in line with Vision 2030, which emphasizes digital transformation in the financial sector. This approach enhances the company's ability to grow, improve customer satisfaction, and increase market share in a sector witnessing increasing competition from emerging digital insurance companies.

Despite the operational and regulatory challenges facing Saudi United Cooperative Insurance Company, there are promising growth opportunities amid the economic and demographic changes in the Kingdom. With the implementation of mandatory health insurance and the expansion of infrastructure and energy projects, the demand for specialized insurance products is increasing, providing the company with room to enhance its market share through the development of new products or the expansion of existing services.

Potential growth strategies include entering into partnerships and alliances with other insurance companies, as seen with the memorandum of understanding signed with the Arab Cooperative Insurance Company. Such mergers can raise capital, enhance operational efficiency, and allow for the provision of broader product packages to customers. Additionally, investing in digital technologies and data analysis gives the company a competitive edge in product pricing and risk management efficiency.

The company also aims to target small and medium-sized business sectors, which represent a growing segment in the Saudi economy and require flexible and tailored insurance solutions. Furthermore, the company can benefit from government incentive programs, such as initiatives supporting health insurance and major project insurance, which create increasing demand for cooperative insurance products.

It is recommended that the company continue to focus on developing human resources, enhancing governance and regulatory compliance, and expanding digital distribution channels to reach more customers. Improving risk management and controlling claims are key to achieving sustainable profits. Amid these opportunities, the company remains in need of a flexible strategy that can swiftly respond to market and regulatory changes to ensure sustainability and long-term growth.

Risk management and financial reserves are among the top priorities for Saudi United Cooperative Insurance Company, given the cooperative nature of the sector and the requirements of regulatory authorities. The company must maintain sufficient reserves to cover current and future claims, which contributes to enhancing trust among customers and regulatory authorities. The size of reserves is determined based on a precise assessment of the contract portfolio, claims level, and future risk expectations.

The company is subject to periodic review by the Monetary Authority and the Insurance Supervision Authority to ensure the adequacy of reserves, especially in light of the implementation of IFRS 17, which requires transparent disclosure of long-term contracts and accurate determination of liabilities. During periods of high claims (such as increased car accidents or seasonal illnesses), the company may need to bolster reserves, impacting short-term profits.

The company follows strict policies in reinsurance, entering into agreements with global reinsurance companies to mitigate risks associated with major disasters or large claims. It also relies on statistical models and advanced data analysis to estimate the likelihood and magnitude of claims. These measures provide the company with flexibility in facing shocks and market fluctuations, even though they increase operational burdens and costs.

The efficiency of risk management affects the company's credit rating and attractiveness to investors, as analysts look at solvency ratios, reserve sizes, and reinsurance policies as key indicators of the company's stability. In cases of weak risk management or inadequate reserves, the company may face regulatory penalties or a decline in market confidence. Therefore, risk management and reserves remain a central focus in the company's strategy to ensure sustainability and growth in a highly competitive environment.

Saudi United Cooperative Insurance Company plays an important role in supporting the Saudi economy and achieving the goals of Vision 2030 by providing insurance protection for individuals, companies, and major projects. The company's activities contribute to enhancing the financial stability of institutions and individuals, positively reflecting on the investment climate and the attractiveness of the Saudi market for local and international investors.

The company focuses on supporting localization and developing Saudi human resources by providing training and qualification programs for employees and participating in government initiatives aimed at increasing Saudization rates in the insurance sector. The company is also committed to applying governance and social responsibility standards by supporting community and charitable projects and contributing to raising insurance awareness among citizens.

Local economies benefit from insuring major projects and infrastructure, as the company contributes to protecting government and private investments and supports business continuity in vital sectors such as energy, transport, and industry. Additionally, providing health insurance and accident insurance for workers in public and private establishments enhances workforce productivity and reduces economic risks associated with health crises or natural disasters.

The company also seeks to develop innovative insurance products that meet the needs of emerging sectors such as technology, tourism, and sports. It works to enhance financial inclusion by providing accessible insurance solutions for traditionally underserved groups. Overall, the company's activities represent a contributing factor to achieving sustainable development, supporting social stability, and enhancing the position of the insurance sector as a key driver of economic growth in the Kingdom.