Saudi Arabia:Large insurers drive industry's 1H2026 profitability

Saudi Arabia's listed insurance sector reported a significant improvement in profitability in the first half of 2026 compared following an exceptionally weak 1H2025, Moody's Ratings said in a report released earlier this week.

Aggregate net profit attributable to shareholders rose by around 13% to around SAR1.5bn ($400m) in 1H2026 from SAR1.3bn in 1H2025, driven by improvements in both underwriting performance, with net insurance results rising by around 13%, and investment income, which surged by around 17%.

Out of 24 listed insurers, 12 reported higher net profit than the year-earlier period. However, nine companies continued to record net losses, underscoring persistent pressure across parts of the market.

The improvement was highly concentrated among insurers outside the top five by insurance revenue. However, the Saudi insurance market remains highly concentrated, with the five largest insurers by insurance revenue, namely Cooperative Insurance Company (Tawuniya), Bupa Arabia Cooperative Insurance Company, Al Rajhi Company for Cooperative Insurance, Mediterranean and Gulf Cooperative Insurance and Reinsurance Company (Medgulf), and Wataniya (National Insurance Company), accounting for around 77% of sector insurance revenue in 1H2026, with Tawuniya and Bupa Arabia alone representing approximately 59%.

On a consolidated basis, insurance revenue reported by the 24 listed insurance companies increased by around 14% to nearly SAR38.5bn, driven by continued growth in motor and medical insurance volumes.

Underwriting results benefited from premium growth, improved claims experience, tighter underwriting discipline, and more favourable pricing conditions, particularly in the motor segment. However, recovery remained uneven across the sector. The improvement in 1H2026 was driven primarily by mid-sized and smaller insurers that narrowed losses or returned to profitability, while the five largest insurers reported broadly stable aggregate earnings.

Capitalisation continued to strengthen at the sector level, largely supported by the largest insurers. In contrast, shareholders' equity among smaller insurers declined modestly, with several companies experiencing capital erosion in the double digits in percentage terms, highlighting ongoing profitability challenges, regulatory capital pressures, and, in some cases, continuing uncertainties related to going concern.