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Fitch Ratings expects merger and acquisition (M&A) activity among Saudi insurers to accelerate over the next two years. Stricter capital requirements and persistently low underwriting profitability, driven by intense price competition, may challenge smaller insurers’ ability to comply with new regulations and remain profitable.
As a result, consolidation through mergers or acquisitions by larger players is likely.
Currently, three proposed mergers are under review: Liva-Malath, SalamaSaudi Enaya, and MedGulf-Buruj. The most recent completed transaction was the merger of Arabian Shield and Alinma Tokio Marine, finalized in November 2023.
Fitch also highlights increased regulatory scrutiny since the Insurance Authority (IA) assumed supervisory responsibilities from the Saudi Central Bank in 2023. The IA plans to introduce a risk-based capital framework by 2027, aiming to further strengthen insurers’ balance sheets.
