S&P Global Ratings has upgraded Saudi Reinsurance’s outlook to positive from stable while maintaining its 'A-' issuer credit and insurer financial strength ratings and regional 'gcAAA' scale rating.
The upgrade reflects Saudi Re's accelerated growth driven by mandatory cession requirements, which require local insurers to cede increasing percentages of reinsurance treaties domestically: 20% in 2023, 25% in 2024, and 30% in 2025.
Saudi Re reported 80% revenue growth in 2024 and 45% growth through the first nine months of 2025, with projected growth of 35% to 40% over the next two years.
The mandatory cession framework has notably attracted additional market entrants, with The Company for Cooperative Insurance (Tawuniya), which holds 27% of Saudi Arabia's insurance market, establishing Riyadh Reinsurance Co. as a wholly-owned subsidiary with SAR 550 million (US$148.5 million) share capital.
The company maintained superior underwriting performance despite rapid expansion, reporting a three-year average net combined ratio of approximately 83% under IFRS 17 from 2022 through 2024. For the first nine months of 2025, Saudi Re recorded an 85% combined ratio, with S&P Global expecting mid-80s performance going forward.
Combined with conservative investment portfolio returns from bank deposits and fixed-income securities, S&P Global projects net income between SAR 140 million and SAR 180 million over the next two years.
Saudi Re's capital base had expanded substantially to SAR 2.1 billion as of September 30, from SAR 1.1 billion at year-end 2023. It maintained above the 99.99% confidence level under S&P Global's risk-based capital model.
The growth resulted from selling its entire Probitas Holdings stake to Aviva Insurance Ltd. for SAR 579 million in net proceeds (producing a SAR 366 million gain in 2024) and Saudi Arabia's Public Investment Fund acquiring a 23.08% stake through a SAR 428 million (US$114 million) investment.
Strong growth concentrated in the Saudi market presents sustainability concerns and limits revenue diversification. The Saudi Insurance Authority is actively working to broaden the market landscape.
Chairman Naji Al-Tamimi revealed the Authority is in discussions with approximately four foreign companies considering entry into Saudi Arabia's reinsurance sector, signaling openness to international participation.
Saudi Arabia will implement a Risk-Based Capital regime in January 2027 following a pilot phase in 2026, a regulatory shift expected to enhance underwriting capacity based on risk assessment and boost the sector's global competitiveness.
S&P Global classifies Saudi Re as government-related due to PIF's shareholding, reflecting its role as a national reinsurer supporting Vision 2030 objectives.
