SALAMA
SALAMA
As of: May 28, 2026
Company Profile
Salama Cooperative Insurance Company is a Saudi Joint Stock Company listed on the Saudi Stock Exchange (Tadawul) that transacts cooperative insurance operations in the Kingdom of Saudi Arabia. The company is regulated by the Insurance Authority (IA), which succeeded SAMA as the industry regulator in late 2023. Its primary lines of business include Medical, Motor (Comprehensive and TPL), Accident & Liability, Engineering, Property, and Marine insurance. The company is fully owned by the general public. In early 2026, a proposed merger with Saudi Enaya Cooperative Insurance Company was terminated after Enaya's shareholders voted against the transaction. Following recent underwriting losses, particularly in the motor segment, management has implemented corrective measures such as enhanced pricing strategies and strengthened underwriting discipline to support future operational results and liquidity.
The Story
SALAMA is currently navigating a challenging operational phase, characterized by underwriting losses and capital erosion, as it seeks to stabilize its position in the competitive Saudi insurance market.
Source: Q1 2026 (2026-05-12)
Performance & Distributions
Market Pricing Multiples
Growth Story
SALAMA's top-line performance shows a divergence between its historical Gross Written Premiums of SAR 162M and its TTM Insurance Revenue of SAR 588M, reflecting the transition to IFRS 17 accounting standards and the recognition of earned premiums over time. Despite this revenue base, the company's growth trajectory is severely constrained by its negative profitability. With a Return on Equity of -22.31% and a sustainable growth rate of 2.08% (with a sustainable ROE of -11.15%), SALAMA's capacity to organically fund market expansion and increase its market penetration is limited. The company must balance premium acquisition with strict underwriting standards to ensure that top-line growth does not translate into further capital drain.
Profitability Dynamics
Profitability remains the primary hurdle for SALAMA, as evidenced by a Combined Ratio of 109.11% for the trailing twelve months, indicating that underwriting expenses and claims exceed premium revenues. This operational deficit has led to a Net Income of SAR -59M. The resulting Return on Equity of -22.31% stands in stark contrast to its estimated Cost of Equity of 8.70%, demonstrating significant economic value destruction. Without detailed loss and expense ratio breakdowns, the overall combined ratio highlights that underwriting discipline is the critical lever needed to reverse these losses, as investment income from the SAR 244M portfolio is currently insufficient to offset the core underwriting deficit.
Risk & Capital Structure
Risk Factors
SALAMA's risk profile is elevated, anchored by SAR 477M in insurance contract liabilities against SAR 786M in total assets, leaving an equity cushion of SAR 267M. This leverage places a premium on capital adequacy and solvency margins under SAMA's strict regulatory framework. With a beta of 1.0038, the company's systematic risk is closely aligned with the broader market, but its internal operational risks are heightened by the ongoing underwriting losses. Managing reinsurance arrangements and ensuring adequate reserves for outstanding claims are paramount to protecting the remaining capital base and meeting regulatory solvency requirements in the Kingdom.
Research Report
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