United Cooperative Assurance Company: In-Depth Performance Analysis

United Cooperative Assurance Company (UCA) was established in the Kingdom of Saudi Arabia as an entity licensed by the Saudi Arabian Monetary Authority (SAMA) to provide cooperative insurance services, known as Takaful, to a wide range of clients, both individuals and businesses. Its products vary from health insurance, vehicle insurance, property insurance, liability insurance, to specialized insurance for industrial and energy sectors. The cooperative insurance model operates on the basis of risk distribution among a group of participants rather than the traditional commercial insurance model, enhancing compliance with Islamic law. The company is committed to the disclosure and governance standards imposed by Saudi regulatory authorities and is subject to continuous oversight through periodic reports to ensure compliance with capital and insurance reserve requirements. Amid rapid changes in the financial sector, the company seeks to adapt its strategy to align with the Kingdom's Vision 2030, which supports the development of the insurance sector and increases its contribution to the non-oil GDP.

United Cooperative Assurance Company occupies a middle position among the insurance companies listed on the Saudi stock market in terms of size and market value. According to mid-2025 data, the company's share price was approximately SAR 5.34, while its market capitalization was estimated at around SAR 214 million. These figures place the company within the medium-sized companies in the cooperative insurance sector in Saudi Arabia, especially compared to major companies such as Tawuniya and Medgulf. It is noteworthy that the company is listed among those with accumulated losses exceeding 50% of capital, indicating the financial challenges it faces. This financially affected situation has placed the company under regulatory scrutiny, requiring continuous corrective actions to ensure sustainability and compliance.

The financial results of United Cooperative Assurance Company for the year 2024 and the first half of 2025 indicate continued recording of accumulated net and operational losses. This is attributed to several factors including increased accounting provisions required under IFRS 17, a decline in investment income, and rising costs associated with claims compensation. The company has not declared any dividends over the past two years due to the absence of distributable profits and the direction of cash flows towards capital restructuring and loss mitigation. It is noted that the price-to-earnings (P/E) ratio is currently unavailable due to ongoing losses, reflecting the level of risk associated with investing in the insurance sector at this stage. The company is also required by regulatory authorities to submit corrective plans to ensure its continuity in the market and avoid further accumulated losses.

The portfolio of products offered by United Cooperative Assurance Company includes health insurance for individuals and businesses, vehicle insurance (against accidents and damages), property insurance (homes, factories, equipment), liability insurance (professional and civil), in addition to specialized coverage for industry, energy, and transportation sectors. The company's products are characterized by their flexibility to meet local market needs, and it is committed to providing services in accordance with Sharia regulations and cooperative insurance requirements. The company also aims to enhance customer experience by developing digital channels and improving claims settlement procedures. Amid the challenges faced by the sector, the company is currently striving to innovate new products and keep pace with digital transformation in line with changing customer requirements and trends in the Saudi market.

The Saudi insurance sector is one of the active competitive markets, with many companies offering a wide range of insurance products. United Cooperative Assurance Company faces strong competition from major companies such as Tawuniya, Medgulf, Malath, Al-Wala, AXA Cooperative, and Bupa Arabia (especially in health insurance). These companies are characterized by larger business volumes and a broader customer base, giving them competitive advantages in pricing, risk management, and product development. On the other hand, competition provides opportunities for medium and small companies through specialization in certain sectors or offering specialized services. Additionally, the current regulatory environment encourages mergers and partnerships to enhance financial efficiency and strengthen capital positions, which has prompted United Cooperative Assurance Company to study the feasibility of merging with competing companies.

The Saudi insurance sector is under strict supervision by the Saudi Arabian Monetary Authority (SAMA), which imposes stringent requirements on capital, technical reserves, and governance. In recent years, SAMA has introduced new international accounting standards such as IFRS 17, which have significantly impacted companies' results due to the reclassification of provisions and new regulatory requirements. The minimum capital allowed for insurance companies has also been raised, and companies with accumulated losses have been placed on special watch lists. Additionally, companies are affected by the launch of government programs such as National Transformation 2020 and Vision 2030, which drive towards improving service quality and expanding insurance coverage. All these factors have contributed to reshaping the sector and increasing merger and acquisition activities.

United Cooperative Assurance Company has witnessed notable administrative changes during 2024 and 2025, including resignations and appointments in top executive positions such as the chairman and CEO. These changes aim to improve performance and reduce operational costs in an effort to recover from accumulated losses. Strategically, the company signed a memorandum of understanding with Arab Cooperative Insurance to study the feasibility of a potential merger, reflecting the market's trend towards enhancing financial efficiency through partnerships. Such steps may help the company expand its customer base and leverage the resources and expertise of the partner, enhancing its chances of exiting the cycle of losses and improving its financial position in the Saudi market.

The implementation of the International Financial Reporting Standard IFRS 17 in the Saudi insurance sector since 2023 has led to significant changes in the way provisions are calculated and revenues and costs are recorded. For United Cooperative Assurance Company, this standard has resulted in increased provisions required to meet future claims, recording additional losses in the financial statements. This accounting shift has affected most insurance companies in the Kingdom, but it has been more pronounced in companies that were already recording operational losses. The new standard has also imposed higher transparency requirements in disclosing sources of profit and loss, placing additional pressure on company managements to adjust performance and improve operational efficiency.

The cooperative insurance sector in the Kingdom faces several risks related to market fluctuations, changes in the regulatory environment, increased competition, as well as operational risks such as high claims volume or declining investment returns. For United Cooperative Assurance Company, financial risks associated with accumulated losses and the need for continuous compliance with capital and technical reserve requirements are prominent. Additionally, fluctuations in stock prices due to financial announcements or regulatory developments directly affect the company's market value. Therefore, it is always recommended to review official financial data and follow the company's developments through approved sources before making any investment-related decisions.

Despite the challenges facing the insurance sector in Saudi Arabia, there are promising growth opportunities, especially with the government's direction to enhance insurance coverage and expand mandatory health insurance. United Cooperative Assurance Company can capitalize on these opportunities by developing new products, investing in digital technologies such as artificial intelligence to improve risk management and claims settlement, and expanding partnerships with business sectors. Additionally, merger or acquisition activities may provide the company with greater competitive capability and additional resources to overcome financial crises. Digital transformation remains a critical factor in enhancing operational efficiency and attracting new customers in the rapidly growing Saudi market.

Transparency and disclosure play a pivotal role in enhancing investor and customer trust in insurance companies, especially amid the financial challenges faced by some firms. United Cooperative Assurance Company is committed to publishing its financial and administrative reports periodically on the Tadawul website, along with disclosing any strategic developments or regulatory changes affecting its financial status. These policies allow shareholders and observers to monitor the company's performance and make decisions based on accurate and reliable information. The Saudi Capital Market Authority imposes a strict obligation on all listed companies to publish all important data immediately upon occurrence to ensure market fairness and transparency.

To follow the latest news and developments of United Cooperative Assurance Company, it is advisable to visit the company's official page on the Tadawul website: Share Page 8190. The Tadawul platform also provides all official announcements and recent financial reports, along with following news through specialized economic newspapers such as "Argaam" and "Al-Eqtisadiah". Disclosures can also be reviewed through the Saudi Capital Market Authority's announcement center and the company's official website (if available) to check press releases and general assembly announcements.