Al Sagr National Insurance Company

1. Company Overview & Earnings Context

Al Sagr National Insurance Company is a UAE insurance company incorporated in Dubai in 1979. The company writes general and life insurance and operates through its head office in Dubai and branches across Dubai, Sharjah, Abu Dhabi, Al Ain and Ras Al Khaimah.

For the six months ended 30 June 2026, Al Sagr reported a net loss of AED 39.16 million, widening from a loss of AED 21.02 million in H1 2025. Basic and diluted loss per share increased to AED 0.17, compared with AED 0.09 a year earlier.

2. Financial Performance Snapshot

• Insurance Revenue: AED 210.56 Million, down 50.0% YoY

• Insurance Service Result Before Reinsurance: AED 12.33 Million, vs. AED 3.05 million loss

• Insurance Service Result: AED 30.12 Million Loss, vs. AED 3.41 million loss

• Net Investment Income: AED 7.31 Million, vs. AED 7.16 million

• Net Insurance & Investment Result: AED 26.27 Million Loss, vs. AED 0.72 million loss

• Other Operating Expenses: AED 8.33 Million, down from AED 15.46 million

• Net Loss: AED 39.16 Million, vs. AED 21.02 million loss

• Loss Per Share: AED 0.17, vs. AED 0.09

The headline deterioration was therefore the sharp widening of the net loss, despite an improvement in the insurance service result before reinsurance and lower operating expenses.

3. Insurance & Operating Performance

Insurance revenue fell sharply to AED 210.56 million from AED 421.46 million, a decline of approximately 50% year-on-year. Insurance service expenses also declined substantially to AED 198.23 million from AED 424.51 million.

Before reinsurance, this resulted in a positive insurance service result of AED 12.33 million, compared with a loss of AED 3.05 million in H1 2025.

However, reinsurance had a major negative impact. Net expense from reinsurance contracts held reached AED 42.45 million, compared with only AED 0.36 million in H1 2025. Consequently, the overall insurance service result deteriorated to a loss of AED 30.12 million, compared with a loss of AED 3.41 million a year earlier.

The weakness was concentrated particularly in General and Motor, which recorded an insurance service loss of AED 36.79 million. Life and Medical generated a positive insurance service result of AED 6.67 million.

4. Key Performance Drivers

The biggest drag on H1 2026 performance was the significant deterioration in the company's reinsurance result. Although the underlying insurance service result before reinsurance turned positive, reinsurance expenses pushed the overall insurance operation deeply into loss.

Investment income remained relatively stable at AED 7.31 million, compared with AED 7.16 million in H1 2025. This included AED 4.68 million of interest income, AED 4.60 million of rental income and AED 0.62 million of dividend income, partly offset by an AED 3.03 million unrealised loss on financial assets.

One positive development was the reduction in other operating expenses to AED 8.33 million from AED 15.46 million. However, this was not enough to offset the deterioration in insurance and reinsurance performance, leaving the company with an AED 39.16 million net loss.

5. Balance Sheet, Cash Flow & Financial Position

Al Sagr ended June 2026 with:

• Total Assets: AED 715.46 Million

• Total Liabilities: AED 840.78 Million

• Total Equity / Deficit: Negative AED 125.32 Million

• Accumulated Losses: AED 367.95 Million

• Fixed Deposits: AED 243.86 Million

• Cash & Bank Balances: AED 4.89 Million

• Bank Overdraft: AED 240.76 Million

The company's accumulated losses increased from AED 328.78 million at the end of 2025 to AED 367.95 million, while its equity deficit widened from AED 86.17 million to AED 125.32 million.

Cash generation also remained under pressure. Al Sagr recorded AED 13.79 million of net cash used in operating activities during H1 2026. Cash and cash equivalents ended the period at AED 4.89 million.

6. Investor Takeaway

Al Sagr's H1 2026 results present a challenging financial picture. The company improved its insurance service result before reinsurance and reduced operating expenses, but these gains were outweighed by a sharp deterioration in the reinsurance result. The net loss consequently widened to AED 39.16 million.

More importantly, the balance sheet remains under significant pressure. Accumulated losses reached AED 367.95 million, equivalent to 160% of share capital, while the company reported a negative equity position of AED 125.32 million. The company was also not compliant with certain CBUAE capital and solvency requirements.

The auditor issued a Disclaimer of Conclusion, stating that it had not obtained sufficient appropriate information to provide a conclusion on the H1 2026 interim financial information. The auditor also highlighted material uncertainty regarding the company's ability to continue as a going concern.

Another issue highlighted by the auditor relates to AED 28.89 million of insurance claims payable that were not appropriately classified as insurance contract liabilities under IFRS 17. The auditor stated that the misclassification would affect the company's solvency ratio, but it was unable to determine the impact.

The company had deficits against the Minimum Capital Requirement, Solvency Capital Requirement and Minimum Guarantee Fund as of 30 June 2026. Management said it continues to monitor the solvency position and has implemented measures intended to improve regulatory capital compliance, with future compliance dependent on effective implementation of its business plan.

Key areas to monitor in H2 2026 are insurance revenue, reinsurance performance, operating cash flow, accumulated losses, negative equity, bank borrowings and progress toward restoring CBUAE solvency compliance.