New regulatory criteria announced by Saudi Arabia's Insurance Authority for motor insurance pricing should strengthen underwriting discipline, reduce excessive price competition and support the long-term sustainability of the motor insurance segment, Moody's Ratings (Moody's) says.
Moody’s says that, for these reasons, the measures are credit positive for insurers.
The global credit rating agency also notes that motor insurance remains a significant and fast-growing part of Saudi Arabia’s insurance market, with gross written premiums rising 12.2% to SAR15.6bn ($4.2bn) in 2025 and a further 25% year over year in the first quarter of 2026.
However, profitability has remained under pressure, with the motor net combined ratio deteriorating to 107.3% in 2025 before improving to 102.5% in 1Q2026 as recent rate increases began to support underwriting performance.
The goal of the Insurance Authority in issuing the criteria is to ensure fair and reasonable prices. The authority outlined six key regulatory standards governing motor insurance pricing, requiring that insurers:
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ensure prices are fair and not excessive
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comply with underwriting rules so premium rates do not fall below technically acceptable levels or result in losses for the company.
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base pricing on sound actuarial principles and underwriting rules
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support pricing with reliable data and experience.
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avoid relying solely on prices charged by other companies, and
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submit the bases and methodologies for pricing to the Insurance Authority.