The Saudi insurance sector is projected to maintain a positive and strong growth trajectory in 2025, with top-line revenue growth forecast to fall in the double-digit zone, says the Insurance Authority (IA).
In its “2024 Saudi Insurance Market” report, the Authority says that this positive outlook suggests that the key factors that drove the significant expansion in 2024 are expected to persist this year, reinforcing the overall optimistic sentiment surrounding the market's future potential.
2024 financial performance
The Saudi insurance market in 2024 exhibited notable resilience and robust expansion, evidenced by a significant 14% revenue escalation, despite stagnant earnings. This robust performance post-IFRS 17 transition underscores the underlying strength and substantial potential of the sector.
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Insurance market performance
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2024 (SAR m)
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2023 (SAR m)
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Change
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Insurance Revenue
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64,961
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56,783
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14%
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Insurance Service Expense
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(56,177)
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(50,374)
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12%
|
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Net Expense from Reinsurance Contracts
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(5,998)
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(3,576)
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68%
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Insurance service results
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2,786
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2,833
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- 2%
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Net Investment Income
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2,491
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2,153
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16%
|
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Net Insurance Finance (Expense) / Income
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(228)
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(247)
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- 8%
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Net insurance & investment results
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5,049
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4,739
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7%
|
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Not-attributable Expenses
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(1,558)
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(1,340)
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16%
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Other Income / (Expenses)
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215
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335
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-36%
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Net profit (before zakat & income tax)
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3,706
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3,706
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- 1%
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Zakat & Income Tax
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(516)
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(482)
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7%
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Net profit (after zakat & income tax)
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3,190
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3,252
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- 2%
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Source: 2024 Saudi Insurance Market
The following companies were excluded from the analysis:
• Companies unlisted on the Saudi Stock Market (Cigna, Orient)
• Companies with different operational nature (Saudi Re, Rasan)
• Companies exited or applied for voluntary liquidation (Weqaya, Sanad, Wafa)
• Companies merged with no published financials for 2024 (MetLife, Al Ahlia, Al Ahli, Solidarity, SABB Takaful, Tokio Marine)
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Insurance penetration in Saudi Arabia reached 2.50% in 2024. This is an increase from 2.38% in the previous year, representing a year-over-year growth of 5%. Insurance premium density, representing the average per capita insurance expenditure, rose by 2% to SAR2,082 in 2024, compared to SAR2,035 in the previous year.
Performance across key insurance segments in 2024 was noteworthy. The Medical segment experienced substantial growth, primarily driven by the ongoing expansion of mandatory coverage to a larger portion of the population. The Motor segment also demonstrated significant growth, linked to factors such as increased new vehicle registrations and a greater emphasis on regulatory compliance. The Property and Casualty segment benefited significantly from the ongoing boom in infrastructure and the national development plans across all economic sectors. The Protection and Saving segment witnessed the largest growth among all other sectors, driven by the Kingdom’s programmes promoting long-term saving plans and innovative product offerings by the market players.
Despite impressive revenue growth, a substantial profit decline was observed for 19 of the 25 listed insurance companies compared to the previous year. This indicates substantial pressure on technical margins, intense competition, and the increasing leverage gained by larger companies at the expense of smaller ones.
Major trends
The market's evolution in 2024 was shaped by several key trends, including the continued pervasive impact of Vision 2030, significant regulatory developments, and the widespread adoption of digital technologies across the industry.
The ambitious Vision 2030 initiatives, with their strong emphasis on the expansion of infrastructure projects and a determined drive towards broader economic diversification, are significantly fuelling the demand for various insurance lines.
Furthermore, the Authority actively fosters a more robust and effectively regulated market environment. The IA's strategic focus on enhancing governance standards, promoting product innovation within the industry, and strengthening the reinsurance sector is expected to generate a long-term positive impact on both the stability and the sustained growth of the Saudi insurance market.
Challenges
However, potential challenges remain. These include price competition and the ongoing need for insurers to maintain robust underwriting discipline to ensure sustainable profitability. The increasing level of competition could exert pressure on insurers' profitability if not carefully managed through prudent underwriting practices and effective cost control measures.
The observed concentration of profits among the top-tier players in the market also suggests that smaller insurance companies may encounter greater challenges in navigating this increasingly competitive environment and may be forced further toward consolidation.
As of 31 December 2024, there were 25 publicly traded insurance companies in the Saudi insurance market, compared to 34 originally licensed and listed companies on the Saudi stock market, Tadawul.
Over the years, three companies – Weqaya, Sanad, and Wafa – exited the insurance market due to operational reasons. Two licensed and operating companies, Cigna and Orient, were delisted on Tadawul, and their financial statements are unavailable. Six companies merged with other market players and ceased to exist.