Saudi motor in 2025: reading the Insurance Authority's market report

Every headline figure in this paper is the Insurance Authority's, taken from The Saudi Insurance Market Report 2025, announced 30 July 2026. Figures introduced as approximate, roughly, implied, or as working out to a value are Axxion's arithmetic on the regulator's printed numbers, not the regulator's own statements; every exhibit built from derived figures says so in its note. Where the report publishes a chart without data labels, or a metric without a definition, no value is reproduced. The reading of what the figures mean for motor operations is Axxion's.

1. Executive summary

The Saudi insurance sector grew to SAR 84.3 billion in gross written premiums in 2025, and its net profit fell 47.2%. Motor sits at the center of that outcome.

• Motor underwriting broke. The net combined ratio moved from 87.2% to 107.3%, a 20.1-point deterioration in twelve months, on premium growth of 12.2% to SAR 15.6 billion.
• Growth was two-thirds exposure, one-third price. Insured vehicles rose 6.8% and premium per vehicle approximately 5.1%. The Kingdom insured 700,000 more vehicles and charged about SAR 68 more for each one.
• Per insured vehicle, the economics inverted. Premium rose approximately 5.1%, claims approximately 14.5%, and operating expense approximately 34.2%. Every line the insurer controls moved faster than the line it charges for.
• Both sides of the ratio moved. The gross claims ratio rose 13.6 points to 84.0%; the attributable expense ratio rose 6.3 points to 22.3%. Expense is roughly a third of the total deterioration, and the report offers no explanation for it.
• Rate has already been pulled. Third-party liability premium rose an indicative 16.6% in the fourth quarter against the same quarter of 2024, and the regulator places the market in a hardening phase. The large single-step repricing has happened.
• The market average conceals the story. Motor combined ratios run from 94.7% to 121.4% across insurer peer groups, with the reinsurer group lower at 86.4%. The regulator names portfolio mix, pricing, underwriting risk management and scale as candidate causes, and separates none of them.
• Motor carries the highest complaint intensity of any line at 12.4 per 10,000 active insured, against 9.0 for health. Claims-related categories account for 76% of more than 440,000 complaints.
• Risk-based capital arrives 1 January 2027 against motor retention of 99.1%, so motor claims volatility reaches capital almost undiluted.

2. The report

The Insurance Authority publishes an annual market report as its flagship statistical release. The 2025 edition was announced on 30 July 2026 and runs to sixty pages across macro conditions, premium growth, profitability, four lines of business, investments, solvency, reinsurance, market structure, penetration, conduct, and a forward view. Both English and Arabic editions are published on the regulator's sector-reports page, linked in the references below.

What follows keeps to the motor sections and the sector figures needed to read them. Sections 5 and 8 go beyond the report, converting its published aggregates into per-vehicle and per-peer-group terms. Those derivations are identified wherever they appear.

3. The sector in 2025

Premium reached SAR 84.3 billion, growth of 10.7% in nominal terms and approximately 8.5% in real terms. That continues a deceleration: nominal growth ran at 26.9% in 2022, 22.7% in 2023 and 16.3% in 2024. The market has still roughly doubled in four years, from SAR 42 billion in 2021.

Growth was concentrated in two lines. Of the SAR 8.2 billion increase over 2024, health contributed about SAR 5.5 billion and motor about SAR 1.7 billion. Together the two accounted for close to 89% of the year's premium growth.

Sector indicator	2025	2024	Change
Gross written premium	SAR 84.3bn	SAR 76.1bn	+10.7%
Net income	SAR 1.9bn	SAR 3.6bn	−47.2%
Net combined ratio	99.9%	97.7%	+2.2 ppt
Net investment income	SAR 2.24bn	SAR 3.46bn	−35.4%
Claims paid	SAR 53bn	—	+10%
Health premium	SAR 47.8bn	SAR 42.2bn	+13.0%
Penetration, non-oil GDP	2.25%	2.59%	−0.34 ppt
Density per capita	SAR 2,367	SAR 2,259	+4.8%

The 2024 combined ratio was restated by the regulator following data updates in insurer submissions.

Two lines in that table deserve attention together. The sector combined ratio landed within 0.1 points of breakeven, and net investment income fell by SAR 1.2 billion. Underwriting stopped contributing and the investment cushion thinned in the same year.

Reinsurance offset neither. The 2025 bridge shows an insurance service result of SAR 7,585 million reduced by SAR 5,774 million of net reinsurance expense. Cessions concentrate in commercial and property lines, where results held up, while motor and health, the two lines under margin pressure, are almost entirely retained. The sector bought protection where it was earning and carried the risk where it was losing.

Penetration fell despite premium growth, because the non-oil economy grew faster than premium. Density, which measures premium per head rather than premium against output, rose 4.8%. The two moving in opposite directions is the clearest statement in the report of where the sector sits: it is growing, and it is growing more slowly than the economy it insures. Against the National Insurance Sector Strategy target of 3.60% of non-oil GDP by 2030, the regulator rates progress as requiring acceleration.

4. Motor: growth, and an underwriting break

Motor premium reached SAR 15.6 billion on 11.0 million insured vehicles, up 6.8% by vehicle count. Both exposure and price contributed, and the split between them is the most useful single fact in the motor section.

Premium grew 12.2%. Vehicles grew 6.8%. The residual, which is what the market charged per vehicle, works out to approximately 5.1%. Roughly two-thirds of motor's 2025 growth came from insuring more cars and one-third from charging more for each one. For a market whose regulator is asking whether growth is quality growth, that is the answer to the first half of the question: most of the top line came from the compulsory insurance base widening, not from underwriting judgment.

The five-year series shows why 2025 reads as recovery rather than expansion. Motor premium fell in 2024, the only decline in the period, before recovering above its 2023 level. Vehicle count, by contrast, has risen every year without interruption. The volatility in the top line is a pricing story laid over a steadily growing exposure base.

Motor	2025	2024
Gross written premium	SAR 15.6bn	SAR 13.9bn
Net written premium	SAR 15.4bn	SAR 13.7bn
Insurance revenue	SAR 14.4bn	SAR 14.0bn
Insurance service expenses	SAR 13.5bn	SAR 12.1bn
Claims	SAR 12.1bn	SAR 9.9bn
Net combined ratio	107.3%	87.2%
Gross claims ratio	84.0%	70.4%
Attributable expense ratio	22.3%	16.0%
Retention	99.1%	98.7%
Insured vehicles	11.0m	10.3m
Comprehensive share of vehicles	25%	25%

Claims rose from SAR 9.9 billion to SAR 12.1 billion, an increase of roughly 22% against premium growth of 12.2%. Claims grew at close to twice the rate of the premium written to pay them. The combined ratio bridge below shows how the year assembled itself.

Motor growth and Motor profitability moved in different directions. Premium increased in 2025, but claims and expenses rose faster, pushing the combined ratio above 100%. The Saudi Insurance Market Report 2025

5. The unit economics of a motor policy

The report presents motor in aggregates. Converting those aggregates to a per-insured-vehicle basis makes the year legible to anyone who prices or administers the business, because it removes the growth in the vehicle base and leaves only what happened to the economics of a single policy.

Per insured vehicle	2025	2024	Change
Gross premium	SAR 1,417	SAR 1,349	+5.1%
Claims	SAR 1,100	SAR 961	+14.5%
Attributable expense	SAR 292	SAR 217	+34.2%

Derived: premium and claims divided by year-end insured vehicles; expense as the attributable expense ratio applied to motor insurance revenue, divided by the same. Not the regulator's figures.

Three caveats belong with that table before anything is built on it. Vehicle counts are year-end snapshots rather than earned exposure, so a growing book overstates the denominator slightly. The claims figure is the insurance-service-expense claims component and not claims paid, so reserve movements sit inside it. And the expense ratio is applied to insurance revenue rather than written premium. Each of those pushes the numbers by a few percent, and none of them changes the ordering, which is the point of the exercise.

One implication is worth drawing carefully. The regulator reports average claims severity rising an indicative 3.9% in 2025. Claims cost per insured vehicle, on the arithmetic above, rose approximately 14.5%. If both hold, the gap has to be explained by something other than the cost of the average claim: more claims per vehicle, a shift in the mix of what is being claimed, or reserve strengthening inside the claims figure. The report publishes no motor frequency series, so which of the three is doing the work cannot be established from public data. It is the single most consequential unanswered question in the motor section.

6. The expense line

The attributable expense ratio on motor moved from 16.0% to 22.3%. That is a 6.3-point increase in the cost of running the business, on a line where the surrounding commentary is almost entirely about pricing and claims.

Expressed against motor insurance revenue of SAR 14.4 billion, 6.3 points is approximately SAR 900 million of additional expense absorbed in a single year. Set against a combined ratio that deteriorated 20.1 points, expense accounts for roughly a third of the movement and claims for the rest. Fix the claims problem entirely, leave the expense line alone, and the book still runs materially worse than it did in 2024.

The report prints the figure without commentary. There is no decomposition into acquisition and administration, no observation on operating leverage, and no note on why overhead grew faster than the premium base it sits on. The sector-wide attributable expense ratio moved in the same direction, from 12.2% to 14.6%, so motor is not alone, though its movement is approximately two and a half times the sector's.

Two things can be said from the published data without inventing a cause. Motor grew its insured base 6.8% and its expense ratio 6.3 points in the same year, so expense did not scale with volume; on a per-vehicle basis it rose more than six times as fast as premium.

The mix of distribution also moved. Sector-wide, broker-intermediated premium grew 18.5% and agent-intermediated premium 66%, the latter from a 1.6% to a 2.4% share, against sector growth of about 11%. Direct premium grew 2.0%. Business shifted toward the channels that carry acquisition cost, though whether that accounts for motor's expense movement specifically is not something the published data settles.

7. The pricing cycle

The regulator places the motor market in a hardening phase, with the peak not yet established. Its account of the cycle: premium softened from late 2023 through most of 2024, stabilized at the turn of the year, and has recovered since. Third-party liability premium rose an indicative 16.6% in the fourth quarter of 2025 against the fourth quarter of 2024, on sample data the regulator describes as indicative rather than complete.

The five-year premium-per-vehicle series makes the cycle visible in a way the report's own charts do not, because it holds exposure constant.

The report also publishes a quarterly third-party liability pricing adequacy series showing a trough through 2024 and a return to approximately parity across 2025. The metric is not defined anywhere in the report, including in its own definitions section, so the values are not reproduced here. The shape is unambiguous: four quarters of inadequate pricing in 2024, followed by correction through 2025.

That sequence explains the timing. Business written below technical adequacy in 2024 earns through in 2025, which is where a 107.3% combined ratio comes from. The regulator's own framing is that the underwriting benefit of the correction has not yet fully flowed through to profitability.

The operational consequence matters more than the diagnosis. Rate has already moved. Pricing adequacy is back at approximately parity and third-party liability premium is up year on year in the most recent quarter. Whatever further correction the market can take, the large single-step repricing has happened, and it happened against a claims line that rose roughly 22% and an expense line that rose 6.3 points in the same period.

The regulator's three scenarios for 2026 divide along the same line. Its upside and baseline cases both require claims frequency and repair cost inflation to stay stable for motor to return below 100%. Its downside case opens on pricing discipline reversing, with competitive dynamics holding rates below technical adequacy and claims inflation continuing. So price still matters on the downside, in the sense that the correction has to hold. What decides the upside is claims cost.

8. What the market average conceals

A single market combined ratio tells an individual insurer very little. The report's peer-group breakdown is more useful, and the dispersion in it is wider than the headline suggests.

The spread between the best and worst insurer peer groups works out to 26.7 points, on the same line, in the same year, in the same market. Market leaders are the only insurer group writing motor profitably. Motor-led specialists, the carriers whose core business this is, sit at 113.7%.

Put in the per-vehicle terms of section 5, 26.7 points of combined ratio on premium of approximately SAR 1,417 is on the order of SAR 380 per insured vehicle of difference in outcome between the best and worst peer groups. On a book of half a million vehicles that is roughly SAR 190 million a year. The dispersion is not a rounding artifact of how the regulator grouped carriers; it is the largest number in the motor section.

The regulator's reading is that the gap may reflect differences in portfolio mix, pricing and underwriting risk management practices, and scale. It names candidate drivers and separates none of them. What it does conclude is that motor profitability in 2025 was not only a line-of-business issue. Motor is also described as the most cycle-sensitive major line, with the distributional view showing that while parts of the market remain profitable, the majority are under underwriting pressure.

9. Structure, distribution and complaints

Motor is the most fragmented major line in the Saudi market, and it fragmented further in 2025. Its Herfindahl-Hirschman Index fell from 948 to 917, well below the threshold for moderate concentration, with the three largest motor insurers writing approximately 44% of motor premium. Health, by contrast, has an index of 3,207 and a top-three share of 86%. The regulator connects motor's structure directly to its pricing behavior, describing fragmentation as the structural backdrop for pricing-cycle pressure.

Fragmentation cuts two ways for a market under pricing pressure. It means no single carrier can hold a rate level the others undercut, which is the mechanism the regulator points to. It also means that when a correction does take hold, as it did through 2025, it has to hold across a wide field of carriers with different loss experience and different capital positions. The downside scenario in section 7 is a description of that field failing to hold the line.

On distribution, direct placement remained the largest channel at 50% of premium, followed by brokers at 47% and agents at 2%. Broker share rose from 44% to 47% in a single year. Online sub-channels remain small: broker online moved from 9.2% to 10.8% of total premium and insurer online from 3.0% to 3.4%.

Conduct is where motor stands out most sharply. The regulator received more than 440,000 complaints across all lines in 2025, rising from approximately 26,000 in January to approximately 44,000 in December. Motor recorded the highest complaint intensity of any line.

Within the monthly mix, complaints about claims procedures rose from 25% in January to 38% in December, while complaints about medical approval rejections fell from 44% to 39%. The direction of travel through the year is toward claims handling.

The regulator issued more than 180 enforcement decisions in 2025 carrying approximately SAR 25 million in fines, identified more than 2,000 violations, and scored sector customer-experience maturity at 2 out of 5. Its 2026 conduct focus names claims approval, settlement timeliness, medical approval rejection, claims procedure quality, affordability and coverage continuity, fraud and waste, and customer-experience uplift. It also instructs that complaints be read alongside the behavior of value-chain participants including providers, repair workshops, intermediaries and third-party administrators.

10. Capital and the January 2027 transition

Motor cedes 0.9% of its premium to reinsurers, against a sector cession ratio of 13.0%. Almost nothing written in motor is passed on. Pricing error, claims inflation and reserve movement land on the insurer's own net result and, from there, on its capital.

Capital	2024	2025
Average solvency ratio	165.7%	155.7%
Median solvency ratio	161%	142%
Small insurers	123%	124%
Insurers below 100%	3	2
Insurers at 100–125%	2	6

The median fell 19 points while the average fell 10. The regulator notes that the average is lifted by a group of strongly capitalized insurers. Twelve insurers reported coverage above 150%. Below 125% sit eight: two under 100% and six between 100% and 125%. The number in that band tripled in a year.

The risk-based capital framework takes effect on 1 January 2027. The regulator's position is that the framework will not create vulnerabilities, but will make differences in risk profile, capital quality and earnings resilience more visible. For motor and health specifically, it states that high retention means underwriting cycle position, claims inflation, pricing adequacy and reserve strength remain central to profitability and capital generation, and that insurers with thin buffers, weak earnings quality or concentrated motor or health exposure may be more sensitive.

Read alongside section 8, that is a pointed combination. The peer groups with the worst motor results are not obviously the peer groups with the deepest capital, and the framework that will price retained motor risk explicitly arrives in seventeen months.

11. What the report flags for 2026

Four themes are carried through the document: capital resilience, motor cyclicality, medical inflation and investment performance. Its forward-looking section lists five emerging themes, with motor first.

On motor, the regulator's framing is that the late-2025 pricing correction provides a basis for recovery but that the outlook remains conditional, naming imported parts, repair labor, vehicle costs, freight disruption and longer repair cycles as pressures on claims severity. Its stated reason this matters is that motor is highly retained and competitively fragmented, so weakening pricing discipline or accelerating claims costs move quickly into net underwriting results and capital.

The report closes with a table of challenge questions for insurer boards. The motor and health row asks whether the two largest retained lines are being managed with sufficient claims, pricing and capital discipline. Three levers, one of which is claims.

On volume, the National Insurance Sector Strategy targets 16 million insured vehicles by 2030. At 11 million the regulator rates progress as on pace. That implies roughly 5 million additional vehicles entering the insured population over five years, and the claims volume that comes with them. On the 2025 per-vehicle claims figure from section 5, 5 million additional vehicles carry on the order of SAR 5.5 billion a year in additional claims cost at current cost levels.

12. Where the public data runs out

The report's 2026 scenarios turn on claims cost and repair economics. No public series tracks either one in the Kingdom.

What the report publishes on motor claims is an indicative change in average claims severity of 3.9%, plus severity charts for third-party liability and comprehensive cover across five years without data labels. The following are not published anywhere in the market:

• Motor claims frequency, and the number of claims settled
• Settlement or repair cycle time
• The split of claims between third-party liability and own damage, and between bodily injury and property damage
• Total loss volumes
• Motor reserve, incurred-but-not-reported, or prior-year development figures
• Motor's share of the SAR 53 billion paid across the sector
• Any repair cost index: parts, labor rates, or paint and materials

The comparison with health makes the position clear. Health carries both a frequency and a severity series. Motor carries one indicative percentage change. Repair cost is named as a pressure repeatedly across the document, and appears in two of the three 2026 scenarios as the condition on motor returning below 100%. It carries no number anywhere. Cycle time appears in the conduct section as a supervisory concern and in the outlook as a watchpoint, again without a measured value.

This is the reason section 5 of this paper had to be derived rather than cited. The per-vehicle economics of Saudi motor are calculable from published aggregates to within a few percent, but they are not published, and the components that would explain them are not collected. An insurer can establish that its claims cost per vehicle rose; it cannot establish whether that was frequency, severity, mix or reserve, and it cannot compare its answer to anyone else's.

None of this is unusual. Motor claims cost is not systematically published by any GCC regulator, and building such a series requires data that sits with carriers and repairers rather than with supervisors. The practical consequence is what matters here.

For anyone running a motor book in Saudi Arabia, the takeaway from sixty pages is short. Rate has moved and its effect is largely booked. Claims cost and operating expense are where the remaining margin sits, they rose 14.5% and 34.2% per vehicle in a year when premium rose 5.1%, and they are the two lines no insurer in the market can benchmark against its peers.

About Axxion

Axxion Claims Settlement Services L.L.C. is the UAE's first dedicated motor claims third-party administrator. From Dubai, Axxion manages the full motor claims lifecycle for insurance partners: first notification of loss, surveying, repair coordination, quality control, recovery, and settlement. The insurer keeps assessment, approval, and settlement authority. The company serves UAE insurers across both large and small-to-medium carriers.

Compliance by design. Axxion was built to operate inside a tightening regulatory environment. The Central Bank of the UAE absorbed insurance regulation in 2020. Every claim Axxion handles passes through formal compliance gates, and the compliance record is generated by the process rather than assembled alongside it.

The Axxion Intelligent Operating System (AIOS). Axxion's claims operation runs on the AIOS, a unified operating layer across surveying, estimation, repair coordination, quality control, recovery, settlement, and reporting. The AIOS combines human operators with structured decision points at every stage, and writes each step to a single audit trail. Insurers retain control over their portfolio throughout.

More information: Managing Director and Co-Founder Frederik Bisbjerg · [email protected] · www.axxion.co

References

1. Insurance Authority (Kingdom of Saudi Arabia), The Saudi Insurance Market Report 2025, July 2026. Primary source for every published figure in this paper. English edition (PDF).
2. Insurance Authority (Kingdom of Saudi Arabia), announcement of the 2025 market report, 30 July 2026 (Arabic). Announcement page.
3. Insurance Authority (Kingdom of Saudi Arabia), Sector Reports, Annual Publications. Index of prior editions.
4. National Insurance Sector Strategy targets and progress ratings as reported in The Saudi Insurance Market Report 2025, at-a-glance section.

Disclaimer. This paper is provided for general information and does not constitute legal, actuarial or investment advice. All published statistics are the Insurance Authority's own, reproduced from its 2025 market report with attribution; Axxion has not independently audited them. Per-vehicle figures, growth decompositions and the exhibits marked as derived are Axxion's arithmetic on the regulator's printed aggregates, carry the stated methodological caveats, and are not the regulator's statements. Where the report publishes a chart without data labels or a metric without a definition, no value is reproduced here. Commentary on what the figures mean for motor operations is Axxion's reading and should not be attributed to the Insurance Authority. No statement here should be relied on as confirmation that any specific requirement or condition applies to any specific firm.