Saudi Insurance Sector Shows Mixed First-Quarter Results Amid Regional Pressures

Insurance companies in Saudi Arabia reported mixed financial results for the first quarter, with some firms posting strong profit growth while others recorded declines or losses as economic and regional pressures weighed on performance.

Among the strongest performers was Gulf Insurance Group, which reported a net profit of SR43.74 million ($11.66 million), marking a 61.44 percent increase compared to the same period last year. The company attributed the rise to a 14 percent increase in revenue and a 41 percent jump in investment income.

Similarly, The Company for Cooperative Insurance, also known as Tawuniya, posted a net profit of SR288.08 million, reflecting a 10.1 percent year-on-year increase. The company said its performance was supported by growth in its investment portfolio and improved collection of outstanding receivables.

The broader insurance sector has shown resilience, with the industry index on Tadawul rising more than 18 percent so far this year. Analysts link this growth to structural reforms, compulsory insurance policies, and economic diversification efforts tied to the country’s Vision 2030 programme.

Tony Hallside, chief executive of STP Partners, said the sector continues to benefit from long-term drivers, though profitability is becoming uneven due to rising claims costs and operational expenses.

Other insurers reported weaker results. Malath Cooperative Insurance Co. posted a net profit of SR5.47 million, down 44.56 percent from a year earlier, citing lower revenue from its motor insurance segment. Saudi Arabian Cooperative Insurance Co. also reported a decline, with net profit falling 8.13 percent year-on-year to SR13.08 million, although the company returned to profitability on a quarterly basis.

Meanwhile, Saudi Enaya Cooperative Insurance Co. saw a steep drop in earnings, with net profit falling more than 90 percent to SR37,000.

Several companies moved into losses during the quarter. Arabia Insurance Cooperative Co. reported a net loss of SR14.8 million, compared to a profit in the same period last year, citing weaker insurance service results and higher operating expenses. Wataniya Insurance Co. also posted a loss of SR10.2 million, reversing a profit from a year earlier.

Additional losses were reported by Salama Cooperative Insurance Co., Amana Cooperative Insurance Co., and Allied Cooperative Insurance Group, reflecting broader challenges across the sector.

Industry observers say inflationary pressures, higher claims costs, and geopolitical uncertainty in the region are affecting profitability, even as premium growth remains steady. Despite these challenges, analysts maintain that the long-term outlook for the Gulf insurance market remains stable, supported by economic expansion and continued investment outside the oil sector.

Companies with strong capital positions and disciplined underwriting are expected to be better placed to navigate the current environment as the sector adjusts to shifting economic conditions.