Decline in Insurance Revenues and Rising Claims Drive Salama Cooperative Insurance to a SAR 91.56 Million Loss and Accumulated Losses Exceeding 33% of Capital

Riyadh | EcoPulse24

Salama Cooperative Insurance Company announced its annual financial results for the year ended December 31, 2025, posting a shift from profit to loss due to declining insurance revenues, increased claims and technical provisions, and merger-related costs incurred during the year.

Insurance revenues for 2025 reached SAR 558.38 million, down 17.7% from SAR 678.48 million in the previous year, mainly due to higher unearned premium reserves, particularly in motor and health insurance segments.

Despite lower earned revenues, total written premiums rose to SAR 655.09 million from SAR 526.57 million the previous year, a 24.41% increase driven by greater activity in motor and health insurance.

Insurance operations recorded a loss of SAR 88.30 million, compared to a net profit of SAR 33.87 million last year, primarily due to higher net incurred claims and increased technical provisions related to insurance coverage.

Insurance services also posted a loss of SAR 38.02 million, up 94.48% from a loss of SAR 19.55 million in the previous year.

Investment income reached SAR 27.15 million, up 3.79% from SAR 26.16 million, offering limited support amid operational pressures.

Net insurance financing expenses stood at SAR 3.19 million versus SAR 3.22 million last year.

The company reported a net loss after zakat attributable to shareholders of SAR 91.56 million, compared to a net profit of SAR 30.12 million last year. Total comprehensive income showed a loss of SAR 80.38 million, versus a comprehensive income of SAR 49.35 million previously.

Earnings per share reflected this downturn, showing a loss of SAR 3.05 per share compared to earnings of SAR 1.23 per share last year.

The company attributed the loss to several key factors, including a SAR 120.10 million drop in insurance revenues due to higher unearned premium reserves and an SAR 11.96 million rise in net incurred claims. Technical provisions increased by SAR 8.31 million, while zakat provisions rose by SAR 3.22 million year-on-year.

Additionally, non-recurring expenses of SAR 3.82 million related to the merger impacted net results.

On a positive note, net reinsurance premiums after commission deductions fell by SAR 29.34 million, partially offsetting the operational pressures.

By year-end 2025, accumulated losses stood at SAR 101.22 million, or 33.74% of capital, placing the company under regulatory oversight for listed entities with accumulated losses exceeding 20% of capital.

Despite these losses, total equity excluding non-controlling interests increased by 6.12% to SAR 269.90 million from SAR 254.33 million last year.

EcoPulse24 Analysis:
Salama’s results reflect the pressures facing the insurance sector amid rising claims and technical costs, especially in motor and health insurance. The widening accumulated losses highlight operational challenges requiring improved risk management and product pricing. However, growth in written premiums suggests strong demand, indicating that operational efficiency improvements could be key to restoring profitability in the coming periods.