IFRS 17 will be applicable in the Kingdom from 1 January 2023 and currently insurance companies are in the implementation and audit phase of the dry-runs for Saudi Central Bank (SAMA) submission. While these dry-runs are underway, some of the common challenges for insurance companies are the extraction of data from the current systems for input into IFRS 17 models include the following; classification of the surplus distribution payable under liabilities for incurred claims (LIC), treatment of value-added tax (VAT) on premium receivables under the premium allocation approach (PAA) model for calculation of liability for remaining coverage (LRC), allocation of attributable and non-attributable expenses and periodic assessment of PAA eligibility under the requirements of IFRS 17.

The results of these dry-runs, the related audit observations and learnings will lay the foundation of the quantitative disclosures relating to the impacts of adoption of IFRS 17 and IFRS 9 in the annual financial statements for the year ending 31 December 2022, as required under IAS 8, and the successful implementation of IFRS 17 in the Kingdom from 1 January 2023.

Mergers and acquisitions

Based on Tadawul announcements, two mergers in the sector were completed in 2022 along with another four companies that expressed their intentions to do so in two MOUs. At present, thirteen insurance companies have been flagged on Tadawul to have accumulated losses in excess of 20% of their share capital and SAMA’s encouragement toward M&A transactions can shepherd these companies towards stability. 


The boost in the digital transformation in the last two-and-a-half years has in the insurance sector been most visible in the way companies now interact with their customers through digital channels. Digitalization has become the norm, with its benefits now widely recognized by the industry. In parallel, and as a result of insurance firms collecting more data through digitalization, they have increased their focus on building a stronger cybersecurity and data privacy infrastructure.

Financial performance

Insurance companies in Saudi Arabia have attained continuous growth in the top line in recent years and the momentum continued in 2022 wherein the aggregate gross premium by the end of Q3,2022 amounted to SAR39.82 billion, showing an increase of 26.8% in gross written premium (GWP) as compared to Q3 2021. The growth was reported in most categories, with the motor and medical segments continuing to be the biggest contributors constituting in aggregate 78% and 66% of GWPs and net underwriting income respectively of the insurance industry for the period ended 30 September 2022. Similar trend is expected for the full year of 2022. 

The volatility in the insurance market comparative results which were visible till the first half of 2022 have settled now in terms of the loss ratios and the net profit after Zakat and tax. The loss ratios and net profit after zakat and tax stand at 81.79% and SAR 566.12 million as of Q3 2022 compared to 81.36% and SAR533.84 million as of Q3 2021 respectively.

The total assets and total equity of the insurance industry stood at SAR79.02 billion and SAR19.08 billion respectively, showing an increase of 20% and 4.8% as compared to 31 December 2021. This represented annualized return on equity of 3.96% as of Q3 2022 as compared to 3.91% as of 31 December 2021 and annualized return on assets of 0.96% as of Q3 2022 as compared to 1.08% as of 31 December 2021.

A detailed breakdown and analysis of the financial performance of 27 insurance companies in Saudi Arabia in the third quarter of 2022 can be found in the following pages, divided over Tier I and Tier II on the basis of total assets. We hope you find this edition insightful for your organization.