Al Rajhi Cap initiates coverage on Tawuniya, AXA Cooperative with ‘Overweight’ rating

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Al Rajhi Capital initiated coverage on The Company for Cooperative Insurance (Tawuniya) and AXA Cooperative Insurance Co. (AXA Cooperative), with “Overweight” ratings and a target price (TP) of SAR 94 and SAR 43, respectively.

The brokerage firm said in a recent report that it is positive towards Tawuniya due to the company's presence across most insurance segments, including high-margin Umrah portfolio, as well as its ability to capture market share, its healthy equity base, and relatively lower loss ratio.

Further, the company has a well-diversified investment portfolio and has been generating a consistent investment income, it added.

Al Rajhi also expects the health insurance segment to be the largest contributor to Tawuniya's gross written premiums (GWPs), followed by property and casualty (P&C) segment.

According to the brokerage firm, AXA Cooperative is the second largest motor insurer in terms of market share and is well placed to capture more business. It is also projected to see a gradual increase in the contribution from the health and P&C segments to its GWP in the coming years.

Further, higher retention will help the company to ensure healthy growth in net earned premiums as well, it noted, expecting the company to perform well in other segments.