Impact of geopolitical tensions limited on Saudi insurers underwritings: Moody’s

Smaller insurers remain under strain despite overall improvements in sector capitalization

Moody’s Ratings said escalating geopolitical tensions in the region are likely to have a limited direct impact on underwriting operations of Saudi insurance companies in the near term, due to the standard exclusions for conflict risks and widespread reliance on reinsurance.

However, it may increase volatility across investment portfolios and, under a more adverse scenario, could affect premium growth by slowing the pace of economic diversification.

The more negative long-term scenario, characterized by slower economic diversification, could weigh on premiums’ growth by limiting new business opportunities and intensifying price competition, particularly for smaller and less capitalized insurers.

The Saudi-listed insurers recorded a sharp decline in 2025 profitability despite higher premiums. Insurance revenue across 23 companies rose by about 9% to nearly SAR 70 billion, driven by increased activity in motor and health insurance.

Nevertheless, total net profit fell by around 36% to approximately SAR 2 billion, due to continued pressure on underwriting results in the motor and medical segments, alongside a sharp decline in investment income.

Although the sector’s capitalization improved overall, this was primarily driven by the largest insurers, while smaller companies continue to face pressure.