The insurance sector in Saudi Arabia continues to expand rapidly, with consolidation among smaller players potentially enhancing the sector's resilience, according to a new report by S&P Global Ratings (S&P).
In the report titled “From oil to opportunity: how Saudi Arabia is redefining its economy”, S&P said that the Saudi insurance market continues to expand rapidly. It benefits from sustained economic activity, population growth, and the rollout of new mandatory insurance schemes. The market's revenues doubled between 2020 and 2025.
Despite a highly concentrated market structure and low insurance penetration, the sector benefits from significant long-term growth potential. This is particularly the case in the still underdeveloped life and savings segment. Gross written premiums in this segment increased significantly in 2024 and accounted for about 10% of total premiums, compared with only about 4% in 2023.
The volatility of Saudi insurers' investment portfolios is relatively low, because they primarily focus on fixed-income assets. Capital buffers could strengthen through continued consolidation and capital raising, especially among midsize and smaller insurers.
That said, the market remains concentrated. The top five insurers generate 70%-75% of total revenues and earnings, leaving the remaining 21 insurers with low margins. Additionally, competitive pressures in the motor and medical lines have created a cyclical pricing environment and weigh on underwriting margins. Still, credit quality remains robust.