Saudi Arabia: Profitability pressured by weak pricing and declining investment income
Source: Middle East Insurance Review | Dec 2025
Profitability in the Saudi insurance market has been volatile over time, with competitive pressures driving frequent changes in the pricing cycle, said Moody’s Ratings.
In a report titled “H1 2025 update: Profit declines on weak pricing in key motor and medical lines”, Moody’s says that for many insurers, price reductions are a key tool for gaining market share, leading to volatile industry profitability.
Following strong performance in 2023 and 2024 that resulted from price strengthening in 2022, the industry is again facing weaker profitability in 2025.
However, Moody’s expects this to improve as insurers return to more disciplined pricing and underwriting. This intense cyclicality highlights the relative immaturity of the market, with many smaller insurers seeking to build scale and market share.
Despite stronger revenue, the combined net profit of the Saudi insurance industry fell to SAR1.3bn ($345m) in 1H2025, down by 40% year over year.
Saudi Arabia’s economy continues to grow and diversify away from the hydrocarbon sector, supporting demand for insurance. The spread of compulsory insurance covers, rising demand for health and life coverage, and the country’s low insurance penetration (premiums as a share of GDP) also contribute to this growth.
These factors drove a 7% average increase in listed primary insurers’ revenue in 1H2025.
Reinsurance premiums also rose, aided by new regulations obliging local primary insurers to cede at least 30% of their risk to domestic reinsurers. M