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INSURANCESaudi IAIC Co-op.Also known asSaudi SalamaPriceSR64.5Pricing / Valuation as on May 27, 2009Mkt capSR0.6bn ($172.2mn)Sh. outstanding10.0mnKey statistics52 week range H/L (SR) 230.0/22.5Avg daily turnover (mn) SR US$3m 59.47 15.8812m 42.42 11.33Raw Beta 6m 2yr1.75 1.85Reuters8050.SEBloombergSALAMA ABPrice perform (%) 1M 3M 12MAbsolute (%) 14 73 (66)Market (%) 6 32 (39)Sector (%) (2) 48 (26)Website: www salama com.saValuation multiples2006 2007 2008P/E (x) NA NM NMP/B (x) NA 11.8 5.4P/Sales (x) NA NA 4.4Div yield (%) NA NA NASaudi IAIC Cooperative Insurance Company (SALAMA) was established in 2006.The Jeddah-based company markets its products under the SALAMA brand.SALAMA is engaged in providing general insurance solutions in compliance withIslamic Shariah and is a subsidiary of the UAE-based Islamic Arab Insurance Co.Company financials2007 2008YoY(%)CAGR(%)(05-08)Net Insurance Premium SRmn NA 72 - -Total Revenues SRmn NA 76 - -Net Income SRmn (13) (20) - -Assets SRmn 111 251 126.5 -Equity SRmn 83 61 (25.8) -Investments SRmn 103 64 (38.0) -Technical Reserves SRmn NA 134 - -Combined Ratio % NA 114.5 - -Net Mgn % NA (26.8) - -ROE % (16.2) (28.2) - -ROA % (12.1) (11.3) - -Div Payout % NA NA - -EPS SR (1.3) (2.0) - -BVPS SR 8.3 6.1 (25.8) -Source: Company, NCBC Research, figures for FY 2007 are from May- December 2007.Segment-wise business analysisProduct segment 2008 Geographic 2008%Rev % Net Inc Breakup %Rev % Net IncWeightage (%)TASI (free float weight) 0.06MSCI Saudi (domestic – small cap)Free float (%)Free float 40.00Relative share price perf.11,0009,0007,0005,0003,000M ay-08 Aug-08 Nov-08 Feb-09 M ay-09TASITop 5 shareholders (%)25020015010050-SALAMA (RHS)Arab Islamic Insurance Company 30.0Bin Dawood & sons Commercial Co. 5.0Al Sha'er Trade, Industries and5.0ConstructionCooperative Group Company for 5.0Trade & ConstructionSource: NCBC ResearchSource: Company, NCBC Research• Business brief: SALAMA’s products are broadly classified into three segments—health, motor and general insurance. The health insurance segment offers individualand corporate health care cover. The motor insurance segment offers comprehensiveand third party liability insurance cover. The general insurance segment providescover for fire & property, personal accident, marine, engineering, and aviation.• Financials: SALAMA reported revenues of SR76.1mn in 2008 primarily driven bypremium income. However, the company’s net income declined to SR20.4mn mainlydue to loss on investment. SALMA’s equity and investments also declined by 25.8%and 38.0% to SR61.4mn and SR64.1mn respectively.• Recent developments: SALAMA reported its 1Q-09 results on April 21, 2009. Thecompany’s net profit dived 86.2% y-o-y to SR1.6mn during the quarter. On April 30,2009, Mr. Shehzad Hafiz Mousaed was appointed as the General Manager after theresignation of Mr. Khaled Salem Barboud. In November 2008, SALAMA announcedstrategic alliance with NCB Capital to promote Sharia compliant insurance solutions.In October 2008, the company announced launch of its new motor claim center inJeddah, which would enable it to provide value-added services to its clients.JUNE 2009SAUDI IAIC CO-OPERATIVE INSURANCE COMPANY192