Al Sagr Insurance accumulated losses reach 65% of capital

Alsagr Cooperative Insurance Company announced on Sunday that its accumulated losses as on June 30, 2022, reached 65%, amounting to SR259,282,904 from the company’s paid-up capital, which amounted to SR400,000,000.
The major reasons for losses from 2018 to 2021 are as follows:
• Increase in net claims incurred and related direct expenses of medical business from years 2018 to 2021.
• Increase in net claims incurred and related direct expenses of motor business during the year 2021.
• Increase in general and administrative expenses by 25% from the year 2018 to the year 2021.
The major reasons of losses during the first half of the year 2022 are as follows:
• Increase in net claims incurred and related direct expenses of motor business by 36% as compared to the same period of last year.
• Increase in general and administrative expenses by 13% as compared to the same period of last year.
The measures to be taken by the company in regard to such losses:
1) Continuing monitoring the price adequacy to ensure prices are well above the actuarial recommended prices for medical and motor lines of business.
2) Continue with the substantial reduction of loss-making motor retail business.
3) Developed business plan with the focus on increasing production of profitable business segments like general business and corporate motor and medical business.
4) Taking cost-cutting initiatives to reduce general and administrative expenses and policy acquisition cost.
5) Keep introducing new products of general lines and offer them to our clients through sales distribution channels and brokers.
6) Capitalizing on IT solutions to increase the level of management controls of motor claims
7) Increase more of digital sales through our company website to be more cost effective.
The procedures and instructions applicable on companies listed in Saudi Capital Market whose accumulated losses reach 20% or more out of the capital thereof will be applied.
The Board also recommended starting the required procedures and complying with the relevant laws and regulations with regard to companies whose losses exceeded 50% of the capital in terms of disclosure and preservation of shareholders’ rights and interests.