Saudi Arabia's motor insurance sector is facing potential losses of up to SAR1bn ($266.5m) this year, according to a new report by Badri Management Consultancy, an international actuarial and risk advisory firm.
In its latest publication titled “KSA Listed Insurance Industry Performance Analysis – 1H2025”, released yesterday, Badri warns that several mid-sized insurers have adopted unsustainable underwriting strategies in the motor segment—doubling volumes in loss-making areas even as the top three players strategically reduced their exposure. The report is based on data extracted from the available published financial reports of listed insurance companies.
Badri said in the report, “1H2025 has largely confirmed the difficulties highlighted in 1Q2025, with only a few isolated positives. Persistent price competition in both motor and medical lines continues to erode performance, and without corrective pricing action, 2025 is on course to be another loss-making year for most of the industry players.”
Profits
The KSA insurance industry’s profitability (after zakat & tax) dropped by 40% in 1H202 to SAR1.3bn from SAR2.2bn in 1H2024. Motor was the single biggest drag, with total net service results in the line plunging by around SAR1bn to a loss of SAR-424m versus a profit of SAR632m in 1H2024, a 167% deterioration. The shift from technical profitability to heavy losses across nearly all motor underwriters underlines the unsustainable pricing seen in certain market segments.
The top three insurers—Tawuniya, BUPA, and Al Rajhi—generated SAR1.6bn of profit in aggregate. Profits at Tawuniya grew by 11% and Al Rajhi posted marginal growth of 1%, while BUPA declined by 13%. Outside the top three, the industry swung sharply into losses, which amounted to SAR-312m in 1H2025 versus a profit of SAR532m in 1H2024, a 159% drop. Meanwhile, 18 companies reported a profit decline that averaged 81%. Though Malath, GIG, Mutakamela, and Enaya posted gains, these were exceptions in an otherwise weak market.
Total insurance revenue in the KSA market grew by 7.5% from SAR31.6bn to SAR33.9bn, with the top five insurers driving the bulk of this expansion. The GWP concentration of the top five rose to 78% of the market. However, this growth masked a sharp deterioration in underwriting results: insurance service results fell by 37% from SAR1.9bn to SAR1.2bn. The top five companies together managed a marginal 1% increase, but the rest of the market swung from SAR295m to SAR-437m.
Investment income also weakened, dropping by 11% from SAR1.4bn to SAR1.3bn, limiting insurers’ ability to offset poor technical outcomes.
Medical and motor
The medical insurance branch showed faint signs of recovery in isolated cases. Motor was the most distressed line. All KSA motor writers either posted technical losses or experienced steep profit declines in 1H2025. An industry-wide Motor COR well above 100% reflects the severity of the problem.
Motor rates were on a high in 2023 and the cycle was on an increasing trend. However, the floodgates were opened during the campaigns in 3Q2023 and changes to NCD calculations which took a toll on the rates and the price war spiral began.
In summary, the 1H2025 results confirm the industry’s vulnerability to prolonged underpricing in both medical and motor. Without a clear pivot to technical discipline and corrective pricing action, the remainder of 2025 could see even deeper earnings pressure across the market.
On 11 August 2025, Badri released its “KSA Listed Insurance Industry Performance Analysis – 1H2025 - Based on preliminary announcements”. Badri said that the impact of prolonged intense price competition in medical and certain motor segments continued to weigh heavily on insurers’ financial results.
“Without decisive price corrections, 2025 is shaping up to be another difficult year of losses for many insurers,” said Badri with the analysis based then on the preliminary interim financial disclosures of insurance companies.