Saudi-based Wataniya Insurance improved its competitive position, despite challenging market conditions in 2025, S&P Global Ratings (S&P) has pointed out as it revised its outlook to "Positive" from "Stable" on the insurer's ratings.
The international credit rating agency said that as of the third quarter of 2025, Wataniya was the seventh-largest insurer by insurance revenue among 25 listed companies. Wataniya was also the third-largest motor provider, after The Company for Cooperative Insurance (Tawuniya) and Al Rajhi for Cooperative Insurance.
The agency revised its outlook to “Positive” on its long-term issuer credit and insurer financial strength ratings, and its long-term Saudi Arabia national scale financial strength rating, on Wataniya. At the same time, S&P affirmed its 'BBB+' long-term issuer credit and insurer financial strength ratings and 'ksaAA+' long-term Saudi Arabia national scale financial strength rating on Wataniya.
“Wataniya's improved market standing is the result of the company leveraging its know-how in motor and property/casualty lines, together with stronger underwriting capabilities and claims-processing systems, in which it has invested over the past years. These improvements allowed Wataniya to compete more effectively and grow in parts of Saudi Arabia outside its home city of Jeddah, notably in Riyadh and Al Khobar,” said S&P.
Because of tougher market dynamics in motor throughout 2025, the segment experienced a deterioration in operating performance. Since second-quarter 2024, competition in motor increased and rates declined materially, remaining inadequate in 2025. This has affected the industry's operating performance, including Wataniya's. The company's motor combined ratio deteriorated to 106.2% in third-quarter 2025 (third-quarter 2024: 96.1%). However, motor rates have been adjusting since September 2025, and we expect operating performance to improve in 2026.
Overall book
Wataniya's overall book of business remained profitable in 2025, recording a combined ratio of 98.7% (third-quarter 2024: 94.3%). In S&P’s opinion, Wataniya's book is sufficiently diversified, despite not writing medical insurance, which makes up about 60% of insurance in Saudi Arabia. S&P believes this allowed it to weather the difficult pricing conditions in motor in 2025 while remaining profitable, an important indicator of a stronger competitive standing. For the full year 2025, S&P expects Wataniya's combined ratio to be around 98%, with net profits exceeding the SAR14m ($3.7m) reported as of the 3Q2025.
Looking ahead
S&P expects an improvement in Wataniya's operating performance over the next two years, thanks to improving pricing conditions in motor since September 2025. S&P’s base-case scenario assumes combined ratios of 95%-97% over 2026-2027. The agency also expects net income to significantly improve relative to 2025. As Wataniya continues to fully retain its profits, S&P anticipates that capital adequacy will comfortably remain in line with its 99.95% benchmark.