Saudi Arabia’s 25 publicly listed insurers reported a steep 40 per cent decline in mixed internet revenue within the first half of 2025 in contrast with the identical interval final 12 months, regardless of a 7 per cent rise in total income, in accordance with a brand new report from Moody’s Rankings.
The autumn was pushed by weak pricing in key enterprise traces, decreased funding revenue, and rising price pressures throughout the business.
The report mentioned profitability was undermined by losses within the dominant motor third-party legal responsibility (TPL) and medical insurance coverage segments, the place aggressive competitors has prevented insurers from elevating costs sufficiently to offset rising claims.
Many smaller and mid-sized insurers, working with restricted capital buffers, had been notably affected by the market’s sustained worth weak spot and by increased expertise and regulatory compliance prices.
Mixture business revenue fell to SAR1.3 billion (US$345 million), with 72 per cent of insurers posting weaker outcomes. The common mixed working ratio, which measures prices and claims as a share of premiums, worsened to 96 per cent from 94 per cent a 12 months earlier.
Bigger insurers, nevertheless, demonstrated higher resilience. The highest 5 corporations noticed their internet revenue fall by simply 14 per cent year-on-year, in comparison with a median decline of 152 per cent among the many remainder of the market. This efficiency hole highlights some great benefits of scale and diversification for well-capitalised corporations, Moody’s mentioned.
Funding revenue, which accounted for practically all of insurers’ internet revenue in each 2024 and H1 2025, dropped by 11 per cent within the first half of the 12 months, compounding the stress on total earnings.
Regardless of the profitability stoop, Moody’s famous that Saudi Arabia’s financial enlargement continues to help long-term insurance coverage progress. The sector’s income enhance displays strong demand pushed by financial diversification below Imaginative and prescient 2030, new obligatory insurance coverage necessities, and low total insurance coverage penetration.
Wanting forward, consolidation is predicted to speed up as regulators elevate capital requirements and enhance scrutiny of underperforming corporations. The Insurance coverage Authority, which took over regulatory obligations in 2024, has already elevated minimal capital necessities to SAR300 million and plans to introduce enhanced risk-based capital guidelines inside the subsequent few years.
Moody’s mentioned the development towards mergers and acquisitions will proceed, enhancing stability within the fragmented Saudi market. Bigger, better-capitalised insurers are anticipated to realize market share as smaller gamers wrestle to stay worthwhile in an more and more aggressive and tightly regulated atmosphere.
