Saudi Insurers Show Mixed Performance in Q1 Earnings
Gulf Insurance Group and The Co. for Cooperative Insurance reported net profits, while several others recorded declines or incurred losses.
RIYADH: Insurance companies operating in Saudi Arabia reported mixed earnings in the first quarter, with Gulf Insurance Group (GIG) and The Co. for Cooperative Insurance (Tawuniya) posting net profits, while several others recorded declines in net income or incurred losses.In a statement to Tadawul, GIG said its net profit for the first quarter of 2023 stood at SR43.74 million ($11.66 million), representing a 61.44 percent increase compared to the same period in 2022.
GIG attributed the rise in net profit to an increase in revenue, which went up by 14 percent, as well as higher investment income, which rose by 41 percent.The insurance index in the Kingdom’s stock exchange has grown by 18.23 percent in the year to date, signaling strong performance of the sector amid growing uncertainties due to conflicts in the Middle East region.“Saudi Arabia’s insurance sector continues to benefit from strong structural drivers, particularly regulatory reform, compulsory insurance lines and broader economic diversification linked to Vision 2030,” said Tony Hallside, CEO of STP Partners.In November, Moody’s said that economic diversification initiatives and the expansion of compulsory insurance schemes are likely to support premium growth in Saudi Arabia and across the wider Gulf Cooperation Council (GCC) region.Reflecting this momentum, Tawuniya reported a net profit of SR288.08 million in the first quarter, marking a 10.1 percent year-on-year increase.According to a Tadawul statement, the rise in net profit was driven by significant growth in the firm’s investment portfolio, as well as efforts to collect outstanding receivables.Malath Cooperative Insurance Co. reported a net profit of SR5.47 million in the first quarter, representing a 44.56 percent decline compared to the same period in the previous year.In a Tadawul statement, the company said that the decline in net profit was due to lower insurance revenues, driven by weaker motor insurance business.On a quarterly basis, Malath Cooperative Insurance Co.’s net profit edged up by 21.38 percent, from SR4.51 million in the final three months of 2022.Nolwenn Allano, chief commercial officer at EIRS, said that the divergence in profitability among insurance companies in Saudi Arabia is a clear signal that the market is maturing.“Profitability is no longer driven by investment income alone; it is being built through disciplined underwriting, precise pricing, and relentless cost control,” said Allano.He added: “The leading insurers are those that took a long-term view, investing in technology years ago, and are now capitalizing on that through operational efficiency and smarter risk assessment.
At the same time, the dominance of motor and medical lines continues to create pressure, particularly as claims costs rise and pricing remains competitive”.Saudi Arabian Cooperative Insurance Co.’s (SAICO) net profit for the first quarter stood at SR13.08 million, marking a year-on-year decline of 8.13 percent.On a quarterly basis, SAICO swung to profit, as the business had faced a net loss of SR13.07 million in the final three months of 2022.Saudi Enaya Cooperative Insurance Co. reported a net profit of SR37k in the first quarter, marking a 92.78 percent annual decline.“While premium growth remains healthy across key segments, profitability is becoming more uneven as insurers face inflationary claims pressures and rising operating costs,” said Hallside.COMPANIES FACING NET LOSSArabia Insurance Cooperative Co. said that it incurred losses of SR14.8 million in the first quarter, compared to a net profit of SR4.44 million in the same period of the previous year.In a Tadawul statement, the company revealed that the net loss during the first quarter was due to a decrease in the net insurance service result and a rise in other operating expenses.Insurance Service Result (ISR) is a key financial metric under International Financial Reporting Standard 17 — Insurance Contracts, which took effect in 2023.
It represents the profit or loss an insurer earns specifically from providing insurance coverage and services during a period, while it separates underwriting performance from investment results.Wataniya Insurance Co. also reported a net loss of SR10.2 million in the first quarter, compared to a net profit of SR6.2 million in the year-ago period.Salama Cooperative Insurance Co. incurred a net loss of SR3.32 million in the first quarter, while Amana Cooperative Insurance Co. and Allied Cooperative Insurance Group witnessed net losses of SR6.29 million and SR17.67 million, respectively.Amid the mixed results, Hallside said that the broader outlook for the GCC insurance market remains stable, supported by economic growth and non-oil investment.He cautioned that the current geopolitical environment is creating additional pressure points for insurers across the region, particularly around inflation, claims costs, and pricing discipline.“In this environment, insurers with strong underwriting discipline, capital strength, and operational scale are likely to be best positioned,” said Hallside.
GIG attributed the rise in net profit to an increase in revenue, which went up by 14 percent, as well as higher investment income, which rose by 41 percent.The insurance index in the Kingdom’s stock exchange has grown by 18.23 percent in the year to date, signaling strong performance of the sector amid growing uncertainties due to conflicts in the Middle East region.“Saudi Arabia’s insurance sector continues to benefit from strong structural drivers, particularly regulatory reform, compulsory insurance lines and broader economic diversification linked to Vision 2030,” said Tony Hallside, CEO of STP Partners.In November, Moody’s said that economic diversification initiatives and the expansion of compulsory insurance schemes are likely to support premium growth in Saudi Arabia and across the wider Gulf Cooperation Council (GCC) region.Reflecting this momentum, Tawuniya reported a net profit of SR288.08 million in the first quarter, marking a 10.1 percent year-on-year increase.According to a Tadawul statement, the rise in net profit was driven by significant growth in the firm’s investment portfolio, as well as efforts to collect outstanding receivables.Malath Cooperative Insurance Co. reported a net profit of SR5.47 million in the first quarter, representing a 44.56 percent decline compared to the same period in the previous year.In a Tadawul statement, the company said that the decline in net profit was due to lower insurance revenues, driven by weaker motor insurance business.On a quarterly basis, Malath Cooperative Insurance Co.’s net profit edged up by 21.38 percent, from SR4.51 million in the final three months of 2022.Nolwenn Allano, chief commercial officer at EIRS, said that the divergence in profitability among insurance companies in Saudi Arabia is a clear signal that the market is maturing.“Profitability is no longer driven by investment income alone; it is being built through disciplined underwriting, precise pricing, and relentless cost control,” said Allano.He added: “The leading insurers are those that took a long-term view, investing in technology years ago, and are now capitalizing on that through operational efficiency and smarter risk assessment.
At the same time, the dominance of motor and medical lines continues to create pressure, particularly as claims costs rise and pricing remains competitive”.Saudi Arabian Cooperative Insurance Co.’s (SAICO) net profit for the first quarter stood at SR13.08 million, marking a year-on-year decline of 8.13 percent.On a quarterly basis, SAICO swung to profit, as the business had faced a net loss of SR13.07 million in the final three months of 2022.Saudi Enaya Cooperative Insurance Co. reported a net profit of SR37k in the first quarter, marking a 92.78 percent annual decline.“While premium growth remains healthy across key segments, profitability is becoming more uneven as insurers face inflationary claims pressures and rising operating costs,” said Hallside.COMPANIES FACING NET LOSSArabia Insurance Cooperative Co. said that it incurred losses of SR14.8 million in the first quarter, compared to a net profit of SR4.44 million in the same period of the previous year.In a Tadawul statement, the company revealed that the net loss during the first quarter was due to a decrease in the net insurance service result and a rise in other operating expenses.Insurance Service Result (ISR) is a key financial metric under International Financial Reporting Standard 17 — Insurance Contracts, which took effect in 2023.
It represents the profit or loss an insurer earns specifically from providing insurance coverage and services during a period, while it separates underwriting performance from investment results.Wataniya Insurance Co. also reported a net loss of SR10.2 million in the first quarter, compared to a net profit of SR6.2 million in the year-ago period.Salama Cooperative Insurance Co. incurred a net loss of SR3.32 million in the first quarter, while Amana Cooperative Insurance Co. and Allied Cooperative Insurance Group witnessed net losses of SR6.29 million and SR17.67 million, respectively.Amid the mixed results, Hallside said that the broader outlook for the GCC insurance market remains stable, supported by economic growth and non-oil investment.He cautioned that the current geopolitical environment is creating additional pressure points for insurers across the region, particularly around inflation, claims costs, and pricing discipline.“In this environment, insurers with strong underwriting discipline, capital strength, and operational scale are likely to be best positioned,” said Hallside.
