Saudi smaller insurers drive first-half profit

The insurance sector in Saudi Arabia experienced a notable recovery in company profits during the first half of 2026. Small and medium-sized enterprises managed to reduce their losses or return to profitability, while the five largest companies maintained their profits with little change, according to a report by "Moody's Ratings." Sector profits increased by approximately 13%, reaching around 1.5 billion riyals, with revenues growing by 14% to 38.5 billion riyals. This growth was driven by increased activity in auto and health insurance, improved underwriting performance, and higher investment income. However, some companies still face pressures, with nine firms recording losses during this period. The most significant transformation was seen in "Walaa Cooperative Insurance," which posted a profit of 43 million riyals after previously incurring losses, reflecting a strong improvement in performance. The Saudi insurance market is expected to continue focusing on mergers, especially as smaller companies face increasing pressures, alongside the sector's transition into a more mature phase. The growth rate is projected to decline to around 10.7% in 2025. The insurance market remains primarily centered on health and auto insurance, with an urgent need to diversify products to increase market value. Industry analysts anticipate that mergers will play a key role in enhancing corporate stability and financial soundness.

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