S&P Global Ratings has revised its outlook on Saudi Reinsurance (Saudi Re) to positive from stable. At the same time, the global credit rating agency affirmed the reinsurer's 'A-' long-term issuer credit and insurer financial strength ratings and 'gcAAA' Gulf Cooperation Council regional scale rating on the company.
According to S&P, Saudi Re has strengthened its competitiveness over the past two years, fuelled by the growth in its topline.
Saudi Re reported revenue growth of about 80% in 2024 and 45% during 9M2025, primarily triggered by the implementation of mandatory cession, a regulation in the reinsurance industry that requires local insurance companies to cede a percentage of reinsurance treaties to the domestic reinsurance market.
This percentage has been increasing over time, from 20% in 2023 and 25% in 2024, to 30% in 2025.
Maintaining underwriting performance
According to S&P, Saudi Re also maintains its superior underwriting performance, outperforming many of its regional and international peers. Saudi Re reported a three-year average (2022-2024) net combined ratio under IFRS17 of about 83%, which demonstrates superior performance compared with many of the regional reinsurers.
Despite strong growth, Saudi Re maintained its underwriting discipline and continued to report a net combined ratio of 85% for 9M2025, with the ratings agency expecting it to maintain this trend and report a net combined ratio in the mid-80s over the forecast horizon.
A conservative investment portfolio
Additionally, S&P noted Saudi Re’s investment portfolio as highly conservative, with the majority of its investments in highly rated bank deposits and fixed-income securities generating stable investment income.
With profitable underwriting results and stable investment income, Saudi Re has built a track record of consistently profitable net income over the past few years, and S&P expects it to continue the trend and report net income of between SAR140m ($37.3m) and SAR180m over the next two years.
Capital adequacy
S&P noted the Saudi Re’s robust risk-based capital adequacy to be a key rating strength, as well, as the company has maintained sufficient capital adequacy buffers above the 99.99% confidence level as per their risk-based capital model.
Over the past two years, Saudi Re successfully executed two major transactions, which helped increase its capital base to SAR2.1bn as of 30 September 2025 from SAR1.1bn at the end of 2023.
A few concerns
Saudi Re’s strong revenue growth and increasing concentration in the Saudi Arabia market weighs on its risk profile, said S&P.
While the top-line growth suggests an expanding market presence, it raises some concerns about the sustainability of such growth due to increasing concentration in the local market.
Overreliance on the domestic market may elevate concentration risk, making it more vulnerable to local market dynamics and limiting its ability to diversify revenue streams.
The rating agency also considers Saudi Re a government-related entity, rooted in the company’s role as a national reinsurer that helps strengthen the Saudi insurance sector and support economic growth.
The future
The positive outlook indicates that S&P could raise the ratings over the next two years if Saudi Re continues to strengthen its competitive position while maintaining its current capital adequacy and underwriting performance, with significant buffers above the 99.99% confidence level.
The outlook may be revised to stable in the next 12-24 months if:
- Underwriting performance deteriorates to a level where the company becomes technically unprofitable for a prolonged period.
- Capital adequacy weakens below the 99.99% confidence level due to underwriting or investment losses, aggressive premium increases, unexpected reserve strengthening, or higher-than-expected dividend payouts.
Ratings may be raised by one notch over the next 12-24 months if Saudi Re:
- Further strengthens its track record of sustainable growth and profitable underwriting results while managing its concentration in the domestic market.
- Maintains significant capital adequacy buffers above the 99.99% confidence level as per S&P’s risk-based capital model.