S&P: Saudi insurance companies’ ratings are stable until 2025, with revenues expected to decline by 10%

Standard & Poor’s Global S&P credit ratings agency expected in its report that its credit ratings for insurance companies in Saudi Arabia will remain stable through 2025, in line with its future outlook for stable credit ratings for all rated insurance companies in the Kingdom.

The agency also expected revenue growth in the sector to decline to between 10% and 15% by 2025, after strong growth since 2022 and a 17% increase in insurance revenues during the third quarter of this year compared to the third quarter of 2023.

The agency reported that despite geopolitical tensions, the agency’s baseline scenario assumes that the war between Israel and Gaza will remain confined to the sector.

The agency explained that most of the insurance revenues in Saudi Arabia were for two major companies, as “Tawuniya Insurance” and “Bupa” together achieved more than 50% of the insurance revenues in the market during the third quarter of 2024. It added that the five major insurance companies, which include: “Walaa”, “MedGulf”, “Al Rajhi Takaful”, “Bupa” and “Tawuniya”, achieved nearly three-quarters of the insurance revenues in the market during the third quarter of 2024, more than the third quarter of 2023 by 10%. She also pointed out that 2023 was an exceptional year for all companies as they achieved net profits, adding that 21 small companies achieved a third of the profits, and stated that as a result of changing dynamics and intensifying competition during 2024, the top 5 insurance companies now achieved about 80% of total profits, while 21 companies achieved only 20%, and in comparison, the top 5 companies contributed about 68% of total profits during the third quarter of 2023. She said that while the revenue share of the top 5 insurance companies witnessed a significant increase between the third quarter of 2023 and the third quarter of 2024, their share of profits increased significantly, adding that as a result, the profits of the remaining companies declined sharply.