The insurance industry in Saudi Arabia will start its transition to a risk-based capital (RBC) regime next year, with full adoption targeted for 2027, said the CEO of the Insurance Authority (IA) at the ingate Global Insurance Conference & Exhibition that was held last week.
Currently, the insurance industry observes a framework consisting of minimum capital requirements and solvency margins.
Sharing ongoing market development efforts by the Insurance Authority (IA) is exerting, the IA CEO Engineer Naji Al Tamimi said that a key development is “Moving from solvency regime to capital regime”.
He said that during the transitional phase in 2026, insurance companies will be implementing two regimes: the existing (solvency) regime as well as the RBC. The full implementation of the new regime will be enforced at the beginning of 2027.
“In 2026, we want to learn by having two parallel systems. The market has been very supportive of this project. We did dry runs, tests and workshops with insurance companies. We look forward to making it happen by January 2027 through a very smooth transition,” he said.
He observed that adopting the RBC regime will establish a more attractive environment for investors as well as operators within the industry and will create confidence among insurance buyers. “We believe that this will bring to the market more underwriting capabilities and sophisticated actuarial analysis, and we expect a higher level of transparency in the market,” he added.
New insurance law in the pipeline
Another major development for the insurance industry in Saudi Arabia is the establishment of a new law, which is being drafted to be submitted to the legislative authorities, said Mr Al Tamimi.
He added that the draft for the new law has been circulated for public consultation. The IA has received helpful and valuable feedback from the insurance sector as well as international parties.
He noted that the new insurance law represents a key milestone for the insurance industry, which will enhance the sustainability of the legislative and regulatory development of the insurance sector in the coming years.
The ingate conference was held at Mayadeen Venue in Riyadh between 10 and 12 November. It brings together the leaders of the insurance, reinsurance, technology, and investment sectors, underscoring the Kingdom’s growing influence and its central role in shaping the future of insurance.