Saudi Arabia's insurance sector has entered a new phase of growth, driven by improved insurance service results, greater operational efficiency, and stronger claims and risk management. This has translated into higher profits for listed companies, which rose by about 24.3 percent in the first half of 2026 to 1.87 billion riyals ($498.6 million). The increase signals an improved ability across the sector to convert growth in business activity and premiums into more sustainable profitability. The performance comes as demand for insurance products in the Kingdom continues to grow, driven by the expansion of health and motor insurance, alongside rising needs arising from projects, infrastructure, and new economic activities. Higher insurance and reinsurance revenues, combined with investment returns and the performance of major companies, contributed to strengthening the sector's overall results. A review of company results shows a clear disparity in performance. Seventeen companies recorded profits during the period, 11 of which reported growth in net profit, while nine companies posted losses. Bupa Arabia topped the sector in profitability, reporting profits of 694.08 million riyals, up 4.14 percent from the same period last year, when it earned about 666.49 million riyals. The increase was supported by higher net insurance service results and growth in operations, along with an increase in net investment results and other income. Tawuniya ranked second, reporting net profit of 609.85 million riyals despite a notable 16.36 percent decline from the more than 729.11 million riyals it earned in the corresponding period of 2025. The company attributed the decline to lower net insurance results and higher insurance service expenses, following the recognition of large claims in its engineering and energy lines. Al Rajhi Takaful ranked third among the sector's most profitable companies, with profits reaching 207.84 million riyals, a modest 2.7 percent increase from approximately 202.37 million riyals in the same period a year earlier. The increase was driven by higher insurance revenues from motor, medical, and general insurance activities, as well as higher net investment results and returns from its investment portfolio. In the second quarter alone, profits across the sector reached 923.43 million riyals, up 24.87 percent from 739.5 million riyals in the same quarter of 2025. Sixteen companies in the sector reported net profits in the second quarter of 2026, with 11 of them recording higher profits than in the corresponding quarter of 2025. The remaining companies posted quarterly losses. Not a Passing Figure Commenting on the sector's results, financial and economic expert Dr. Suleiman Al-Humaid Al-Khalidi, a member of the Saudi Economic Association, told Asharq Al-Awsat that the 24.3 percent increase in the net profits of Saudi insurance companies to about 1.87 billion riyals in the first half of 2026 “is not a passing figure.” Rather, he said, it reflects an important shift in the sector's performance, driven by three main factors. He explained that the first factor was improved insurance service results, supported by premium growth, better pricing, and improved risk management. The second was greater efficiency in managing claims and costs, which he described as a key factor in the sector's shift from focusing on revenue growth to achieving more sustainable underwriting profitability. The third factor, he added, was the contribution of investment portfolios to overall results, particularly amid the investment environment from which financial institutions had benefited in the preceding period. He stressed that the 24.3 percent profit growth should not be viewed as uniform across all companies, as the larger companies have a clear impact on the sector's overall results because of the size of their operations. He noted that the most important indicator in the first-half results was that the improvement had become largely tied to the quality of the insurance operations themselves, rather than solely to investment returns or non-operating items. This, he said, reflects an evolution in the nature of the growth taking place in the sector. Al-Khalidi expects the positive trend in the performance of insurance companies to continue through the second half of 2026, albeit at a more moderate pace than in the first half. He pointed to several supporting factors, foremost among them continued growth in health and motor insurance, as well as insurance for projects and infrastructure. He noted that the expansion of the Saudi economy and the increase in assets and economic activities requiring insurance coverage are creating room for demand to grow and for new products to be developed in the market, including areas that have not previously achieved sufficient penetration, such as life insurance and private property insurance. At the same time, Al-Khalidi identified three main challenges that warrant monitoring: rising claims, particularly in health insurance; pricing competition; and fluctuations in investment returns. He said the real winner in the next phase would not necessarily be the company achieving the greatest growth in premiums, but rather the one able to achieve the more difficult balance of increasing premiums while improving insurance results, controlling claims and expenses, and generating stable investment returns. He stressed that the Saudi insurance sector is entering a different phase, in which the focus is no longer limited to market growth but has shifted toward converting that growth into sustainable profitability and improving the quality of capital and returns. This makes the second-half results of 2026 an important test of whether this transformation is sustainable. 3 Challenges Al-Khalidi noted that there are three challenges that should be monitored: rising claims, particularly in health insurance; pricing competition; and fluctuations in investment returns. He added that the real winner in the next phase would not necessarily be the company achieving the greatest growth in premiums, but the company capable of achieving the more difficult balance of premium growth, improved insurance results, disciplined claims and expenses, and stable investment returns. He noted that the Saudi insurance sector is entering a different phase, and that the focus is no longer simply on market growth but on turning that growth into sustainable profitability and achieving higher-quality capital and returns. This makes the second-half results of 2026 particularly important in assessing the sustainability of this transformation.
