Consolidation, not pricing, will decide Saudi insurers’ survival, Moody’s VP says

Saudi insurers’ earnings jump in 1H 2026 masks a widening gap in the market — and Moody’s Ratings thinks consolidation, not pricing power, will decide who’s still standing by 2027.

We talked to Mohammed Ali Riyazuddin Londe, vice president at Moody’s Ratings, about whether the recovery is structural, why it isn’t broadening past the largest insurers, and what January’s new solvency framework means for the weak ones.

EnterpriseAM: Moody’s expects earnings to improve in 2026, but 12 of the 24 listed insurers still reported underwriting losses in 1H. What would need to change for you to consider the sector’s recovery structural and sustainable, rather than driven mainly by pricing or investment income?

Mohammed Ali Riyazuddin Londe: While earnings improved in 1H 2026, a sustainable recovery will require broader underwriting gains, stronger discipline, and greater diversification beyond motor and medical. Pricing discipline will stay difficult without further consolidation — intense competition in those two lines keeps pressuring both pricing and earnings. We see consolidation as key to more sustainable sector income.

E: Do you expect underwriting income to broaden across the market, or remain concentrated among larger insurers? What’s behind the divergence?

ML: We expect underwriting income to improve gradually, but the recovery will remain concentrated among larger insurers in the near to medium term. Larger players benefit from scale, diversification, and stronger capital positions, while smaller insurers remain more exposed to intense competition, concentrated business, and earnings volatility. Although some smaller insurers improved in 1H 2026, persistent underwriting losses highlight the widening gap between the market leaders and weaker players.

E: How do you expect the January 2027 transition to a risk-based capital and economic solvency framework to affect smaller insurers, particularly those already facing underwriting losses?

ML: The new framework will put greater pressure on weaker insurers with limited scale, concentrated risks, and weaker earnings. It could accelerate consolidation, with some players needing to raise capital, merge with stronger peers, or restructure to meet regulatory requirements and remain viable over the long term.