Saudi Arabia: The Gulf Cooperation Council’s insurance sector is expected to remain stable over the next 12 to 18 months, supported by strong economic growth and rising non-oil investments, according to Moody’s Ratings. 

In its latest GCC Insurance Outlook, Moody’s said economic diversification and compulsory insurance schemes are expected to underpin the sector’s growth. 

The region’s non-life segment, which represents more than 80 percent of premium revenues, will benefit from government-backed infrastructure and diversification projects, particularly in Saudi Arabia and the UAE, which together generate 80 percent of the GCC’s total insurance premiums. 

S&P Global Ratings has similarly projected sustained expansion for the Gulf’s insurance industry, particularly within the Islamic segment, which it expects to grow by around 10 percent annually in 2025 and 2026. 

In its latest report, Moody’s stated: “The industry will also benefit from the spread of compulsory insurance and rising demand for health and life cover.” 

It added: “Larger insurers will continue to outperform smaller ones, which will struggle to remain profitable because of intense price competition, rising claims, and high technology and regulatory costs.” 

Moody’s forecasted real gross domestic product growth of around 4 percent for 2026, led by the UAE and Saudi Arabia, with additional contributions from Kuwait, Oman, and Qatar. 

Expansion in construction, tourism, and manufacturing is expected to increase demand for property, liability, health, and specialty insurance, while greater consumer awareness and reduced subsidies in utilities and education are expected to boost demand for life and savings policies. 

According to the report, “Profitability is improving overall,” with non-life insurance prices rising in 2025, particularly in the UAE, where insurers raised premiums following heavy storm-related claims in 2024. 

Moody’s said the sector should post “positive underwriting profit for the remainder of 2025 and into 2026.” 

However, the agency noted that large insurers will capture most of the profitability gains next year due to economies of scale, while smaller peers “will struggle to make an underwriting profit amid intense competitive pressure.” 

Increased reinsurance prices, regulatory expenses, and technology investments are squeezing margins for smaller firms, and the dominance of insurance aggregators is further driving competition based on price. 

Moody’s also cautioned that GCC insurers’ high exposure to equities and real estate raises asset risks, particularly amid geopolitical uncertainty in the Middle East. 

“This increases the sector’s investment risk and magnifies its exposure to downside scenarios related to geopolitical tension,” the report said. 

Saudi insurers face additional strain on capital buffers due to slower profit growth and higher risk exposures, while UAE insurers have benefited from stronger profitability and price adjustments. 

Regulators across the GCC are tightening capital and risk requirements, which Moody’s expects will accelerate consolidation— especially in Saudi Arabia, where authorities have taken a more assertive stance on compliance.