Saudi Arabia’s insurance sector recorded a notable improvement in profitability during the first half of 2026, with listed insurers collectively reporting net profits of 1.87 billion Saudi riyals, equivalent to about $498.6 million. The figure represents a 24.3 per cent increase compared with the same period a year earlier.

The rise points to a broader improvement in the sector’s ability to turn expanding business volumes and insurance revenues into stronger financial results. Better insurance service performance, tighter operational management and more effective claims and risk controls were among the factors supporting the increase.

The growth comes as demand for insurance continues to expand across Saudi Arabia. Health and motor insurance remain important drivers, while the Kingdom’s infrastructure development, construction activity and broader economic expansion are creating additional demand for insurance protection. Higher insurance and reinsurance revenues, together with investment income and the performance of major insurers, also contributed to the sector’s overall results.

Performance, however, varied significantly between companies. Seventeen insurers reported profits during the first six months of the year, with 11 recording year-on-year increases in net profit. Nine companies remained in loss-making territory.

Bupa Arabia leads profitability

Bupa Arabia emerged as the most profitable insurer during the period, posting net earnings of 694.08 million riyals. That was 4.14 per cent higher than the 666.49 million riyals recorded in the corresponding period of 2025.

The company’s stronger result was supported by an improvement in its net insurance service result and continued operational growth. Higher net investment results and other income also contributed to the increase.

Tawuniya ranked second, although its earnings declined. The insurer reported a net profit of 609.85 million riyals, down 16.36 per cent from more than 729.11 million riyals a year earlier.

The decline was linked to weaker net insurance results and higher insurance service expenses. The company was affected by the recognition of significant claims in its engineering and energy insurance businesses.

Al Rajhi Takaful occupied third place among the most profitable insurers, recording 207.84 million riyals in net profit. Its earnings increased by 2.7 per cent from approximately 202.37 million riyals in the first half of 2025.

The improvement was supported by higher insurance revenues from motor, medical and general insurance operations, alongside stronger net investment results and returns from its investment portfolio.

Second-quarter performance also strengthens

The sector’s performance was not confined to the first three months of the year. In the second quarter alone, Saudi insurers generated combined profits of 923.43 million riyals, an increase of 24.87 per cent from 739.5 million riyals in the same quarter of 2025.

Sixteen companies reported quarterly net profits, while 11 of them recorded year-on-year growth. The remaining insurers reported losses for the quarter.

The figures suggest that the improvement in profitability has continued beyond the first quarter, although the uneven performance among individual companies shows that the sector is still facing differences in underwriting conditions, claims experience and operating efficiency.

Shift towards stronger insurance operations

Economic and financial expert Dr Suleiman Al-Humaid Al-Khalidi, a member of the Saudi Economic Association, described the 24.3 per cent increase as more than a temporary improvement. Speaking about the sector’s performance, he identified three major factors behind the stronger results.

The first was improved insurance service performance, supported by premium growth, better pricing and stronger risk management. The second was greater efficiency in claims and cost management. The third was the contribution of investment portfolios to overall earnings.

According to Al-Khalidi, the significance of the latest figures lies in the growing contribution of core insurance operations. In previous periods, investment income and other non-operating factors could have played a larger role in supporting profitability. The latest results indicate that insurers are increasingly seeking to improve the quality of their underlying insurance business.

He also cautioned against treating the 24.3 per cent increase as a uniform improvement across the market. Larger insurers have a considerable influence on aggregate industry figures because of the scale of their operations.

Health, motor and infrastructure offer room for growth

Al-Khalidi expects the sector’s positive performance to continue during the second half of 2026, although he anticipates a more moderate pace of growth.

Health and motor insurance are expected to remain important areas of demand. At the same time, the expansion of infrastructure, construction and other economic activities is creating opportunities for insurers to develop and offer additional forms of coverage.

Saudi Arabia’s wider economic expansion is also increasing the number of assets, businesses and projects requiring insurance protection. This could encourage insurers to develop products for areas where coverage has historically been less widespread, including life insurance and private property insurance.

The sector’s next phase, however, will not be without pressure. Rising claims, particularly in health insurance, could weigh on profitability. Intense competition over pricing may also make it harder for insurers to improve underwriting margins, while changes in investment returns could affect overall earnings.

For insurers, the challenge is therefore becoming more complex. Simply increasing premiums may no longer be enough to secure stronger financial performance. Companies will need to balance business growth with disciplined claims management, controlled expenses, sound pricing and consistent investment performance.

The second half of 2026 will provide an important indication of whether the sector can sustain the improvement recorded so far. Saudi Arabia’s insurance market appears to be moving beyond a phase centred primarily on expansion and towards one where the quality of growth, underwriting performance and long-term returns carry greater weight.