Riyadh - Mubasher: The board of Al Sagr Cooperative Insurance Company recommended utilizing the company’s statutory reserve balance to partially absorb its accumulated losses.
The proposal, finalized on 16 June, involves the allocation of SAR 8.90 million from the reserve to address a portion of the SAR 40.50 million in losses reported as of the end of the first quarter (Q1) of 2026.
According to the company’s official financial statements for the three-month period ending 31 March, 2026, these losses have reached a total of SAR 40.50 million.
This loss figure is particularly significant as it represents 13.50% of the company’s total paid-up capital.
In the context of the Saudi capital market, the ratio of accumulated losses to capital is a key metric monitored by investors and regulators alike.
By applying the statutory reserve against these losses, Al Sagr Insurance aims to reduce this percentage, thereby improving its financial indicators and providing a more robust balance sheet for its stakeholders.
The process for finalizing this financial adjustment involves several critical steps and approvals. The board’s recommendation must first be reviewed and approved by the relevant regulatory authorities in Saudi Arabia. These bodies oversee the insurance and capital markets to ensure that such financial restructurings comply with the established legal and accounting frameworks governing listed insurance firms.
Once the necessary regulatory non-objections are obtained, Al Sagr Insurance will invite its shareholders to a General Assembly meeting.
During this assembly, the recommendation will be put to a formal vote, and shareholder approval will be required to officially execute the transfer of funds from the statutory reserve to the accumulated loss account.
Al Sagr Insurance has emphasized its commitment to transparency throughout this corporate action. The company stated that it will provide the market with timely updates regarding any material developments, including the status of regulatory approvals and the announcement of the General Assembly date.
This move is part of the company's broader efforts to manage its financial position effectively. Utilizing internal reserves to offset losses is a standard accounting practice for Saudi listed companies, allowing them to recalibrate their financial standing without necessarily requiring external capital injections.
For Al Sagr Insurance, addressing the 13.50% loss-to-capital ratio is a proactive step in maintaining its fiscal health and meeting the expectations of the Saudi financial sector. This strategic accounting measure is expected to provide a clearer path for the company as it navigates its future operational and financial goals.
The company recently received the final approval from the Insurance Authority (IA) to market and sell its Health Insurance for Athletes product for both individuals and groups.
