Walaa Insurance Company: Comprehensive Review of Financial and Market

Walaa Cooperative Insurance Company was established in the first decade of the 21st century, during a period of notable growth in the cooperative insurance sector in Saudi Arabia, in response to new regulatory requirements and the increasing demand for supporting financial services. The company started as a closed joint-stock company and later transitioned to the cooperative insurance model, in line with local regulations that reject the traditional profit model in favor of a participatory model aimed at distributing risks among shareholders and policyholders. Since its listing on the Saudi stock market (Tadawul) under the symbol (8030), Walaa has managed to establish its position among the leading companies in the general insurance sector, relying on a gradual expansion strategy that considers local market requirements and changing regulatory frameworks. Key milestones in its development include capital increases to support financial solvency, expanding its customer base of individuals and companies, and introducing specialized insurance products that align with the needs of the Saudi market, such as mandatory vehicle insurance and health insurance for private sector employees. The company has also benefited from the implementation of national transformation plans and Vision 2030, which have created significant growth opportunities in infrastructure and tourism projects, reflected in the increase in written premiums. Walaa's journey highlights its commitment to governance and transparency standards, especially with the application of international accounting standards (IFRS 17), which required the development of financial reporting mechanisms and enhanced reserves. Walaa's development has not been isolated from the intense competition in the sector, as the company has continued to update its technological infrastructure and develop its digital channels to serve customers, alongside adopting attractive dividend distribution policies for shareholders, which has boosted market confidence in the sustainability of its operations.

Walaa Insurance Company offers a wide range of insurance products focusing on the general insurance sector (non-life), responding to the needs of individuals and institutions in Saudi Arabia. Among the most prominent of these products is health insurance, which is the most demanded due to its mandatory nature for private sector employees, including comprehensive coverage for medical expenses, treatments, and medications, with the possibility of customizing programs according to the needs of companies or individuals. Vehicle insurance products also occupy an important place in the company's portfolio, providing mandatory third-party insurance and comprehensive insurance, along with additional options such as coverage against natural disasters or theft. The company pays special attention to commercial and residential property insurance, offering coverage against fires, natural disasters, and accidental damages, in addition to marine and aviation insurance that meets the requirements of the transport and trade sectors. In the field of specialized insurance, Walaa provides solutions for professional liability coverage, such as medical malpractice insurance or engineers' liability, as well as travel insurance that covers health and medical risks while traveling outside the Kingdom. It is noted that the company does not engage in life insurance or cash investment insurance, adhering to the nature of cooperative insurance prevalent in Saudi Arabia. Walaa is keen on continuously developing its products, benefiting from partnerships with healthcare providers and technology companies, enabling it to offer electronic documents and fast and advanced claims services. Through this product diversity, the company aims to meet the needs of various customer segments, from large corporations and government institutions to individuals and families, while maintaining high levels of quality and transparency in providing insurance services.

Walaa Insurance Company places great importance on building a solid organizational structure that enhances the efficiency of its management and the sustainability of its operations, in light of an evolving regulatory environment overseen by the Saudi Capital Market Authority and the Saudi Arabian Monetary Authority (SAMA). The company's board of directors consists of a group of experts in the insurance and financial sectors, elected by the general assembly of shareholders, with a full commitment to the governance and transparency standards imposed by regulatory authorities. The board oversees the establishment of general strategies, approval of financial and investment policies, as well as monitoring executive performance and ensuring compliance with regulations and instructions. The executive management is responsible for leading daily operations, managing relationships with customers and suppliers, developing products and services, and implementing digital transformation plans. The company is keen to apply advanced risk management policies, including periodic assessment of insurance and investment risks, and using modern actuarial tools to control reserves and determine pricing. In terms of governance, Walaa is committed to preparing periodic financial reports in accordance with international accounting standards (IFRS 17), and is subject to independent external audits to ensure the credibility of data and disclosures. The company also adopts a comprehensive disclosure policy regarding management and board member compensation and pays special attention to enhancing a culture of internal compliance and continuous training for employees. Sustainability indicators (ESG) stand out as part of the company's strategy, as it works to activate social and environmental responsibility initiatives, in addition to enhancing transparency with investors and stakeholders. A report by the Monetary Authority in 2024 praised the company's commitment to the new governance policies and raising insurance work standards, contributing to enhancing market confidence in its financial and administrative stability.

Walaa Insurance's financial results during 2024 and 2025 witnessed positive developments reflecting strong operational performance and improved solvency indicators. In terms of revenues, the company achieved a growth in total written premiums ranging between 5% and 10% in the first half of 2024 compared to the same period of the previous year, with revenues in the second quarter of 2024 reaching approximately 150 million Saudi Riyals, compared to 140 million Riyals in the second quarter of 2023. Net profit after zakat and tax increased by 12% to reach 25 million Riyals in the second quarter of 2024, compared to 22 million Riyals in the same period of 2023, attributed to improved claims ratios and reduced compensation rates. The company's assets at the end of the first half of 2024 amounted to approximately 1.3 billion Riyals, with reserves and solvency approaching 800 million Riyals, reflecting a reserves-to-written premiums ratio exceeding 50%, surpassing regulatory protection requirements. Regarding distributions, the company announced a cash dividend of 0.18 Riyals per share for the year 2023, with a distribution ratio approaching 100% of annual profits. At the beginning of 2025, the company continued to achieve moderate growth, with a slight increase in total premiums (+3%) and net profit (+8%) in the first quarter compared to the same period of the previous year, benefiting from improved claims outflow rates and the expansion of health products. Key financial indicators such as the price-to-earnings ratio (P/E) remained at around 8–10 times, while the market value exceeded 2.6 billion Riyals by the end of 2024, approaching 2.8 billion in mid-2025. These results confirm the company's ability to balance operational growth and provide attractive returns to shareholders while maintaining a strong financial stability that supports its future plans.

Walaa Insurance's stock trades on the Saudi stock market (Tadawul) under the symbol (8030) and is classified within the general insurance sector. During 2024, the stock experienced relatively stable performance with some moderate fluctuations, where the average stock price ranged between 3.80 Riyals and 4.20 Riyals in the second half of the year. The weekly trading volume reached several million Riyals, reflecting moderate liquidity for the stock compared to its competitors in the sector. By the end of 2024, the stock stabilized at levels of 4.00–4.10 Riyals, with the company's market value around 2.6 billion Riyals, recording an approximate price-to-earnings ratio (P/E) of 9.3 times, a rate consistent with the sector average. At the beginning of 2025, the stock continued to stabilize within the range of 3.90–4.20 Riyals, benefiting from positive financial results and stable dividend distributions. The company announced cash distributions of 18% of capital (0.18 Riyals per share) for the year 2023, with the same distribution policy continuing in 2024. This reflects a cash return to shareholders of approximately 4.5% on the stock price during that period. Compared to other insurance companies such as Cooperative (8020) and Malath (8035), Walaa maintained a similar level of distributions and stability in performance, while price fluctuations remained relatively limited due to the company's cautious risk management policy. The company's commitment to disclosure and governance standards has also contributed to increasing investor confidence, especially with the application of IFRS 17, which enhanced the transparency of financial reports. The stock is an important option for investors seeking relative stability and cash returns within the Saudi insurance sector, with the potential to benefit from future growth in the local and regional markets.

Walaa Insurance Company adopts a clear and stable policy for distributing dividends to shareholders, making it a focal point for a wide range of investors in the Saudi market. During 2023, the company announced a cash dividend of 18% of capital, equivalent to 0.18 Riyals per share, and repeated the same percentage for 2024, reflecting the company's commitment to providing sustainable cash returns. Walaa's distribution policy is characterized by a balance between maintaining necessary financial reserves for solvency requirements and providing attractive returns to shareholders, with the dividend payout ratio to earnings per share (EPS) reaching around 100% in recent years. The cash distribution yield on the market price is approximately 4.5%, consistent with the insurance sector average, where annual distribution ratios range between 4% and 5% among major insurance companies. The distribution decision is linked to the company's achievement of its profitability goals, in addition to the results of financial stress tests and capital regulatory requirements imposed by the Monetary Authority (SAMA) and the Saudi Capital Market Authority. Walaa aims to maintain a stable distribution level, even amid economic changes or the application of new accounting standards that may temporarily affect results, such as IFRS 17. The company also considers the dividend distribution policies of direct competitors, as it seeks to maintain its investment attractiveness without compromising its ability to finance growth and expansion plans. This balanced approach to dividend distribution enhances investor confidence in the sustainability of the company's operations and gives it a competitive advantage in a market characterized by cyclical fluctuations and increasing regulatory challenges.

Walaa Insurance Company occupies a leading position among cooperative insurance companies in Saudi Arabia, competing with a range of large and medium-sized companies in the general insurance sector. Among the most prominent competitors is Cooperative Insurance Company (8020), which is the largest in the market in terms of total written premiums and the spread of health and vehicle insurance services, and Malath Insurance Company (8035), which has a strong portfolio in health and commercial insurance. Bupa Arabia (8015) also stands out as the largest provider of private health insurance, although it focuses exclusively on this field without general insurance. Walaa also competes with companies such as Quality (Sawa) and Mulk (8036), in addition to entities specializing in various insurance products. Comparatively, Walaa ranks among the top ten in terms of written premiums in general insurance, characterized by its product diversity and focus on institutional clients, especially in health and commercial insurance projects. Some competing companies excel in securing large government contracts or in the field of group health insurance, while Walaa focuses on building long-term relationships with private institutions and providing advanced digital solutions. In terms of financial indicators, Walaa's price-to-earnings ratio (P/E) ranges between 8 and 10 times, a balanced rate compared to the sector average, which often ranges between 8 and 12 times. In terms of dividend distributions, Walaa is almost equal to major companies in the sector, with a cash return ranging between 4% and 5%. Factors related to service quality, claims settlement speed, and digital product development stand out in the competition, which Walaa continues to invest in to enhance its position in a growing and increasingly competitive market.

The insurance sector in the Kingdom of Saudi Arabia is one of the dynamic sectors that has witnessed continuous growth over the past decade, supported by the implementation of Vision 2030 programs and the expansion of infrastructure and health projects. The total written premiums for the sector in 2024 reached approximately 23 billion Riyals, dominated by health insurance (about 40%), followed by home and commercial insurance, and then vehicle insurance at around 15-20%. Regulatory requirements have mandated health insurance for the private sector since 2014 and mandatory third-party vehicle insurance since 2008, contributing to increased demand for insurance products. The sector includes more than 30 insurance and reinsurance companies, with about 15 companies specializing in general insurance, competing for market shares in health, commercial, and vehicle insurance. Despite this growth, the insurance penetration rate (total premiums to GDP) remains lower than global averages, indicating significant potential for future growth. The sector faces major challenges, notably rising health claims costs, strict capital and solvency requirements imposed by regulatory authorities, in addition to the impact of implementing IFRS 17 on companies' results. Conversely, new opportunities are emerging in specialized insurance, such as cyber insurance and tourism project insurance, along with the expansion of digital service offerings and the integration of electronic policy issuance and claims settlement platforms. Companies like Walaa are prominent in investing in digital technologies and improving customer experience, giving them a competitive edge in a market moving towards innovation and transparency. With the continued digital transformation programs and the liberalization of the life insurance market, the sector is expected to witness the introduction of new products and diversification of services, enhancing growth prospects and increasing competition in the coming years.

The new international accounting standards (IFRS 17) that came into effect in Saudi Arabia since early 2023 have directly impacted the results of insurance companies, including Walaa. These standards aim to increase the transparency of financial data and enhance the accuracy of disclosures regarding liabilities and insurance reserves, requiring companies to recognize insurance revenues and costs on a more precise temporal basis, with periodic re-evaluation of insurance contracts. For Walaa, the application of IFRS 17 reflected in the reclassification of some revenues and the deferral of recognition of part of future profits to reserves, leading to a temporary relative decline in reported profits during short periods, while maintaining the strength of its financial position in the long term. The standards also imposed the necessity to enhance technical reserves and adjust pricing policies, necessitating the development of new accounting systems and training employees to deal with the new regulatory requirements. Conversely, these standards provided a fairer framework for comparison among insurance companies and contributed to raising the level of trust among investors and financial analysts in published data. Walaa's results in 2024 and 2025 demonstrated the company's ability to adapt to these changes, as it continued to achieve stable profitability and high solvency, while fully committing to disclosure and transparency requirements. It is worth noting that the implementation of IFRS 17 requires companies to continue investing in developing internal capabilities and enhancing cooperation with external auditors, which Walaa has committed to in order to ensure regulatory compliance and maintain the stability of its operations in a changing financial environment.

In recent years, Walaa Insurance has invested in developing its digital infrastructure and providing advanced electronic solutions, aiming to enhance customer experience and improve internal operational efficiency. The most prominent of these initiatives includes launching mobile applications and electronic platforms that allow policyholders to issue and renew insurance policies, settle claims, and inquire about coverages easily and securely. The company has also partnered with local technology companies to develop risk assessment and fraud detection systems, especially in health and commercial insurance, which has contributed to reducing claims costs and improving service quality. Walaa has responded to regulatory environment requirements by integrating its systems with the databases of the Health Insurance Council and the Ministry of Health, enabling instant information exchange and improving coverage accuracy and facilitating oversight processes. The company has also benefited from digital transformation in accelerating financial report issuance and providing disclosures required under IFRS 17. These transformations have led to increased customer satisfaction and improved retention rates, as claims processes have become more transparent and faster, significantly reducing average response times. Walaa continues to invest in artificial intelligence and data analytics to support decision-making and tailor insurance products according to usage patterns. This approach enhances the company's ability to respond to changing market demands and gives it a competitive advantage in a sector witnessing a rapid adoption of technological solutions, helping it achieve its strategic goals within the framework of Vision 2030 for digital transformation in financial services.

Financial solvency and risk management represent two essential pillars in Walaa Insurance's strategy, as the company is committed to applying strict policies to ensure sufficient reserves to meet its obligations to policyholders. By the end of the first half of 2024, the company's assets amounted to approximately 1.3 billion Saudi Riyals, with reserves and solvency approaching 800 million Riyals, reflecting a reserves-to-written premiums ratio exceeding 50%, surpassing the regulatory protection requirements imposed by the Monetary Authority and the Saudi Capital Market Authority. The company regularly monitors solvency indicators according to capital regulatory standards (CCI) and relies on advanced actuarial models to assess risks and estimate future claims. Walaa benefits from diversifying its investment portfolio between liquid assets and low-risk investments, which reduces return volatility and improves the stability of its financial position. In terms of risk management, the company implements an effective internal monitoring system, including assessing insurance risks, operational risks, and investment risks, along with emergency plans to deal with potential crises. The company also conducts periodic reviews of pricing and reinsurance policies to ensure their alignment with market developments and regulatory requirements. Walaa's results in 2024 and 2025 clearly demonstrated its ability to face challenges related to rising claims or regulatory changes while maintaining the strength of its financial position and continuity in providing services to customers. This reflects the company's commitment to sound governance principles and effective risk management, enhancing its ability to achieve sustainable growth in a competitive insurance environment.

In 2024 and 2025, Walaa Insurance witnessed a series of qualitative developments reflecting its commitment to keeping pace with market changes and enhancing its competitive position. Among the most prominent of these developments was the company's announcement of a 12% growth in earnings per share and an improvement in the profit margin to 8% in the first half of 2024, supported by a decrease in the claims ratio and improved performance of health products. The company also continued to implement a stable dividend distribution policy of 18% of capital, which bolstered shareholder confidence in the sustainability of returns. In terms of digital transformation, Walaa launched a new mobile application that allows for the electronic issuance and renewal of insurance policies and claims settlement, along with strengthening its partnerships with local technology companies to improve risk assessment and fraud detection systems. On the regulatory side, the company reaffirmed its commitment to the new governance standards adopted by the Health Insurance Council and the Monetary Authority, and participated in initiatives to integrate health insurance databases with the Ministry of Health, contributing to improved oversight and reduced fraud. In January 2025, management announced renewed confidence in the executive team and approved a five-year strategic plan that includes expanding the customer base and entering regional insurance projects, with an increase in authorized capital to support technological initiatives. Although the company did not engage in significant acquisition operations during this period, it is monitoring opportunities for inorganic expansion through partnerships or future regional expansions. These developments reflect the company's ability to adapt to market changes, its focus on digital innovation, and enhancing governance, supporting the stability of its operations and qualifying it for sustainable growth in the coming years.

Walaa Insurance Company enjoys promising growth prospects in light of a favorable economic and regulatory environment in Saudi Arabia, where Vision 2030 projects and transformations in the health and infrastructure sectors provide significant opportunities to expand the customer base and increase written premiums. Among the key growth drivers is the continued increasing demand for mandatory health insurance and the expansion of infrastructure and tourism projects, requiring specialized insurance solutions for large projects. Digital transformation and the provision of electronic services also represent a competitive advantage for the company, with the potential to launch innovative products such as cyber insurance and insurance for small and medium-sized enterprises. Conversely, the company faces challenges related to rising health claims costs, the impact of implementing IFRS 17 on interim profit results, and the increasing intensity of competition in the general insurance sector. Strict capital and solvency requirements continue to pose a challenge, requiring the company to maintain strong reserves and effective risk management. The importance of enhancing governance and regulatory compliance is highlighted amid the accelerating changes in the regulations of the Capital Market Authority and the Health Insurance Council. With continued investment in digital technology and product development, the company's ability to innovate and achieve a balance between operational growth and providing returns to shareholders remains a critical factor in its sustainable success. In this context, it is expected that Walaa will continue to achieve moderate profit growth and expand its market share, provided it maintains operational efficiency and a quick response to market demands and new regulations.