Saudi Insurers See Profit Rebound After 2025 Motor Slump

S&P Global Ratings expects the Saudi insurance market to keep improving over the next two years, even as a projected gap in motor coverage weighs on near-term results.

The sector's profits fell in 2025 after a weak cycle in motor insurance. S&P expects a rebound in 2026 and 2027, driven by higher premiums in health and property lines and tighter cost controls across the industry.

The motor segment, which accounts for roughly a quarter of gross written premiums in the kingdom, suffered from price competition and higher claims frequency last year. S&P said the cycle has bottomed and margins should recover as carriers reprice policies.

Health insurance, the largest line by premium volume, continues to benefit from mandatory coverage rules and population growth. Property and casualty lines are also expanding, helped by construction activity and the government's Vision 2030 spending programs.

S&P's base case assumes the combined ratio – a measure of underwriting profitability – improves to the low 90% range by 2027 from an estimated mid-90% level in 2025. That would bring the sector closer to the levels seen before the motor downturn.

Capitalization remains adequate across rated insurers, S&P said, though it flagged that dividend payouts and acquisition spending could pressure buffers at some firms. The rating agency rates seven Saudi insurers, with most carrying stable outlooks.

The read-through for listed Saudi insurers is uneven. Companies with heavy motor exposure, such as Najm and Al Rajhi Takaful, face a longer recovery path. Those weighted toward health and property, including Bupa Arabia and Medgulf, are better positioned to absorb the motor drag.

S&P did not change any ratings or outlooks in the report. The next catalyst for the sector is the second-quarter earnings season, which will show whether the motor repricing is taking hold.