The year 2024 turned out to be more challenging than 2023 for many smaller insurance companies, says Badri Management Consulting, an international company specialising in actuarial services.
In its latest report, 'KSA – Listed Insurance Industry Performance Analysis – 2024', Badri said, "2023 was a remarkable year for the KSA insurance industry when every single company made a profit and it was always going to be difficult to maintain that momentum."
Overall, for the 25 listed insurance companies, the combined net profit (after zakat and tax) declined by 2% to SAR3.2bn ($853bn) in 2024 from SAR3.3bn in 2023. However, the top three most profitable insurers – BUPA, Tawuniya and Al Rajhi – made up nearly 80% of the total industry profits.
Excluding the top three companies, the remaining industry players posted a cumulative profit of SAR670m, down from SAR1.4b in 2023, marking a 51% decline.
Of the 25 insurers, six recorded higher profits in 2024 compared to 2023 while the remaining 19 reported lower profits.
The report was based on an analysis of the preliminary financial performance data of the listed insurers.
Badri commented, “We have observed intense price competition in many motor and medical segments leading to unsustainable average price levels which have no doubt contributed to this drop in profits. When the full financials are published, more light will be shed on this.”
Total insurance revenue grew by 14%, increasing to SAR65bn in 2024 from SAR57bn in 2023. Outside the top three, the sector's insurance revenue increased by 8%.
Overall underwriting performance remained consistent, with insurance service results totalling SAR2.8bn in 2024, equivalent to 2023. However, 19 companies reported a significant drop in insurance service results in 2024 compared to the prior year. Investment income rose by 21%, climbing to SAR3.1bn in 2024 from SAR2.6bn in 2023, often offsetting weaker underwriting performance.