Motor remained the most distressed line in the Saudi insurance market in 2025, with net service results swinging to a loss of SAR797m ($212.5m) in 2025 from a profit of SAR578m in 2024, a deterioration of 238%, according to BADRI Management Consultancy.
In its “KSA – Listed Insurance Industry Performance Analysis – Year End 2025” report, the international actuarial and risk consulting company said that the motor branch’s gross combined ratio widened by 10 percentage points, reflecting prolonged underpricing that intensified following NCD adjustments and aggressive discounting in late 2023. Motor insurance is the second-largest branch in the Saudi market, with a 19% share of revenue.
Despite some signs of pricing correction in motor towards the last part of 2025, the divergence between the market leaders and the rest of the industry widened significantly, leaving the sector on course for continued pressure heading into 2026, said the report.
While the top players have strategically reduced motor exposure, several mid-sized insurers continue to expand volumes in loss-making segments, amplifying industry-wide losses.
Heading into 2026
The overall insurance sector in Saudi Arabia faced a challenging 2025 as solid topline growth failed to translate into profitability, leaving players on course for continued pressure heading into 2026, according to BADRI. In 2025, profitability saw a setback as underwriting pressures and weaker investment returns weighed on overall performance.
The industry's profitability (after zakat & tax) declined sharply by 36%, from SAR3.2bn ($853.3m) in 2024 to SAR2bn in 2025. Gross written premiums rose 11% to SAR80.2bn in 2025, while insurance revenue grew by 9.5% to SAR69.6bn, supported by strong expansion among the top five insurers, led by Tawuniya's SAR4bn – 20% growth primarily driven by its medical book.
However, insurance service results declined 32%, from SAR2.7bn to SAR1.8bn, reflecting mounting technical strain across most of the market.
Only five insurers grew their profits year-on-year, while 11 insurers reported net losses, compared to just three in 2024.
Medical and Protection & Savings
The medical branch, which dominated the insurance market with a share of 64% in total revenue in 2025, delivered a 31% improvement in net service results to SAR1.8bn, supported by stronger pricing in large corporate accounts, though SME and retail medical remain under competitive pressure.
Protection & Savings business, which accounted for 3% of the market, posted a standout 95% increase in net service results to SAR307m, reinforcing the segment's long-term profit potential. P&C net service results, on the other hand, declined 8% to SAR559m, with heavy cession continuing to dilute earnings retention.
Investments
BADRI indicated that investment income fell by 7% to SAR2.5bn in 2025, offering limited relief. Tawuniya reported the highest investment income of SAR764m as well as the highest absolute growth of SAR83m.
Although the top three insurers recorded strong investment performance, overall returns were insufficient to offset weakening underwriting outcomes.
For many insurers, investment income only partially cushioned negative insurance results, with 13 out of 23 companies reporting negative insurance results and only three of them generating an overall net profit.
Performance gap
In the Saudi insurance market, the performance gap between market leaders and the rest has widened meaningfully, said BADRI. The top three players grew profits by 5% to SAR2.6bn, while the remaining insurers swung from a combined profit of SAR676m to a loss of SAR603m, registering 189% deterioration. Excluding the Top Three, the sector effectively moved into a loss position, underscoring deepening structural issues across mid-tier and smaller insurers.
“Given historical patterns, such widespread losses typically trigger pricing corrections across key business lines. Early signs of rate firming in motor suggest this cycle may be beginning; however, unless insurers implement firm pricing discipline and realign portfolios toward sustainable risk selection, the sector's recovery prospects will remain limited in the near term,” BADRI said.