S&P Global Ratings has revised Saudi Re’s outlook to positive from stable citing improved performance indicators, mainly the company’s strengthening competitive position and robust capital buffers.
According to S&P, the positive outlook reflects its expectation that Saudi Re will continue to leverage favourable regulatory changes in the Kingdom’s insurance market while maintaining strong underwriting discipline and capital adequacy over the next two years.
Saudi Re has strengthened its competitiveness over the past two years, driven by the exponential growth in its topline, fuelled largely by the implementation of mandatory cession.
This regulatory policy, introduced to boost the local reinsurance market, requires domestic insurance companies to cede a portion of their reinsurance treaties to the local market.
This percentage has been increasing over time: 20% in 2023, 25% in 2024, and 30% in 2025.
“We believe Saudi Re will continue to benefit from this and maintain its strong growth momentum for the next two years, with insurance revenue expected to increase by about 35%-40%,” S&P stated.
Saudi Re reported revenue growth of about 80% in 2024 and 45% during the first nine months of 2025.
Despite its rapid expansion, Saudi Re has maintained disciplined underwriting standards. The company outperformed many regional and international peers with a three-year average (2022-2024) net combined ratio of roughly 83% under IFRS 17 standards.
For the first nine months of 2025 the company reported a net combined ratio of 85%, while maintaining its underwriting discipline.
“We expect it to maintain this trend and report a net combined ratio in the mid-80s over the forecast horizon,” S&P added.
Saudi Re’s investment portfolio is also highly conservative, with the majority of its investments in highly rated bank deposits and fixed-income securities generating stable investment income.
The company’s net income is forecast to range between SAR 140 million and SAR 180 million annually over the next two years.
S&P highlighted Saudi Re’s robust risk-based capital adequacy as a key rating strength, noting it maintains buffers above the 99.99% confidence level.
The company’s capital base nearly doubled to SAR 2.1 billion as of September 30, 2025, up from SR 1.1 billion at the end of 2023, driven by two major strategic transactions.
In its first transaction, Saudi Re sold its stake of Probitas Holdings, a Bermuda-based holding company, to Aviva Insurance Ltd., recording proceeds of SAR579 million and a capital gain of SAR366 million in 2024.
In its second transaction, Public Investment Fund (PIF), Saudi Arabia’s largest sovereign wealth fund, acquired a 23.08% stake in Saudi Re, injecting SAR 428 million.
While Saudi Re’s exponential top-line growth suggests an expanding market presence, it raises some concerns about the sustainability of such growth due to increasing concentration in the local market, S&P noted.
The positive outlook indicates that S&P could raise Saudi Re’s ratings within the next two years if the company continues to strengthen its competitive position while preserving its current capital adequacy and underwriting profitability.
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