The Saudi Arabian insurance industry's profits (after-zakat & tax) dropped by 28% in the first three months of 2025 to SAR0.6bn ($160m) in 1Q2025 from SAR0.9bn in 1Q2024, Badri Management Consultancy, an international actuarial consulting company, has said.
In its report “KSA: Listed Insurance Industry Performance Analysis –1Q2025” released yesterday, Badri said that motor results went from SAR0.3bn profit in 1Q2024 to a loss of (SAR0.2bn) in 1Q2025. This was the biggest contributor to the drop in overall profits.
The impact of intense price competition in motor is now coming through with a COR of 104%. Without sharp price corrections, 2025 will be a very difficult year of losses for many, Badri said.
Whilst Medical seems to be showing some small signs of recovery, the Motor market is a car crash right now, said Badri. All motor writers made technical losses or suffered sharp drops in profits during 1Q2025. There has been a lack of focus on technical results from some companies, with market premiums at unprofitable levels for too long in certain motor segments and an industrywide Motor COR of 104% is the result.
Whilst the Top Three motor insurers reduced production with a GWP dip, a few mid-sized companies more than doubled their motor books in this environment. More than, say, 20% growth in Motor in this environment should be a red flag for the board and the management.
Profits
For the Top Three insurers—BUPA, Tawuniya and Al Rajhi—the combined profit was SAR732m for 1Q2025 (1Q2024: SAR667m). BUPA and Tawuniya increased profits by 6% and 33% whereas Al Rajhi’s profits declined by 18%, impacted by the challenging motor market.
The remaining insurers recorded a combined loss of SAR96m, down from profits of SAR219m in 1Q2024, reflecting a 144% drop. Based on recent history in this market, with results such as these, price rises often follow.
Total insurance revenue grew by 6%, increasing from SAR16bn to SAR17bn. Without the Top Three, the industry's growth was 5%.
Overall underwriting performance declined, with insurance service results decreasing by 23%, from SAR799m in 1Q2024 to SAR617m in 1Q2025. 18 companies reported a significant drop in insurance service results compared to the prior year. Investment income dropped by 17%, from SAR783m in 1Q2024 to SAR652m in 1Q2025, often balancing weaker underwriting outcomes.