It was a tale of two markets for Saudi insurers in 3Q 2025. Industry leaders Bupa Arabia, Al Rajhi Takaful, and Tawuniya remained solidly in the black, while the rest of the sector faced tighter margins, with 12 of 13 other firms seeing their net income shrink or turn to a loss.

The breakdown: Top players Bupa Arabia and Al Rajhi Takaful saw their net income grow in the third quarter, while Tawuniya remained solidly in the black despite a 12.3% dip in net income.

Medgulf was the outlier among ins. giants, with the company’s bottom line halving in 3Q to SAR 17.9 mn, according to a disclosure to Tadawul. This came despite a 14% y-o-y increase in the firm’s ins. revenue to SAR over 1 bn, boosted by gains in the company’s health and motor ins. segments. MedGulf is finalizing a merger with Buruj Cooperative that will create the fourth-largest ins. player in the Kingdom by gross written premiums.

A different story for smaller players: Of the 13 other insurers that reported their 3Q earnings so far, 12 recorded steep declines in their bottom lines, including eight companies that swung into the red. Four others reported sharp drops of over 50% (Arabia Ins., Malath, MedGulf, and Wataniya). Gulf Ins. Group was the only non-giant ins. player to report an increase in net income, up some 57%.

Revenue growth didn’t necessarily translate to the bottom line: A majority of companies (10 of 16) saw their ins. revenues grow. However, the growth was erased in many instances by higher costs, leading to lower net income and indicating a significant margin squeeze.

ICYMI- The ins. market in Saudi is highly concentrated, with the top five players generating 70%-75% of revenues, S&P Global said in its Saudi Credit Trends report. This, along with intense competition in key lines like motor and medical, pressures the margins and underwriting performance of the other 21 insurers.

The common culprits: Almost all companies posting losses this quarter — including Allied Cooperative Ins., Walaa, and Malath — cited higher net ins. service losses (especially from the motor segment), rising claims, and increased operating costs or reins. as reasons behind their shrinking bottom lines.

Sector outlook: Moody’s expects GCC insurers’ net income to strengthen over the next 12-18 months, driven by government-backed diversification, non-oil growth in construction, tourism, and manufacturing, and expanding compulsory coverage, Zawya reports. Non-life ins. — over 80% of GCC premiums, led by Saudi Arabia and the UAE — will remain the main growth driver, with rising non-oil investment and subsidy phaseouts set to boost underwriting gains through 2026.

The great divide is expected to linger: Larger insurers are set to continue to outperform, thanks to scale advantages, while smaller players will struggle amid intense price competition, rising claims, and higher regulatory and technology costs, likely prompting further consolidation. The rating agency also warned that some insurers’ exposure to high-risk investments leaves them vulnerable to regional geopolitical tensions.

A FEW PICKS-

  • Arabian Shield Cooperative Ins. reported a net loss of SAR 9.4 mn, compared to a net income of SAR 16.3 mn a year prior. This was mainly due to a 36% rise in ins. service expenses, which were partially offset by a 20.9% y-o-y climb in revenue to SAR 484.1 mn;
  • Wataniya Ins. saw its net income drop 50.6% y-o-y to SAR 7.3 mn, primarily due to a 48.6% decline in net ins. service results and a 47.8% rise in operating expenses. Ins. revenues slipped 6.6% y-o-y to SAR 435.7 mn;
  • Gulf Ins. Group’s net income increased 57.9% y-o-y to SAR 34.4 mn, driven by a 46% improvement in net ins. results and higher investment income. Revenues saw a slight 0.7% y-o-y increase to SAR 382 mn;
  • Malath Cooperative Ins. saw its net income decline 88.6% y-o-y to SAR 631k, driven by higher ins. service losses, particularly from the motor segment. Revenues grew 35.7% y-o-y to SAR 366.1 mn;
  • Al Etihad Cooperative Ins. swung to a net loss of SAR 33.5 mn from a net income of SAR 3.9 mn. The slide was attributed to lower ins. service results and higher reins. contracts. Ins. revenues declined 23.6% y-o-y to SAR 325.7 mn.
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