Fitch Predicts Surge in Saudi Insurer M&A Activity
Sector News | Jun 13, 2025 | EIN
Fitch Ratings forecasts an acceleration in the merger and acquisition (M&A) activity among Saudi Arabian insurance companies in the coming two years. This expected rise in activity is being driven by stringent capital regulations and persistent low profitability in underwriting due to intense pricing competition, posing compliance challenges for smaller insurers. Consequently, there is a likely trend towards consolidation through M&A by larger players to maintain profitability and meet regulatory demands. Currently, three mergers are under review: Liva-Malath, Salama-Saudi Enaya, and MedGulf-Buruj. The recently completed merger between Arabian Shield and Alinma Tokio Marine was finalized in November 2023. Moreover, the Insurance Authority, having taken over supervisory responsibilities from the Saudi Central Bank, plans to implement a risk-based capital framework by 2027 to fortify insurers' balance sheets.
Sectors
- Insurance
- Financial Services
Geography
- Saudi Arabia – The article discusses the insurance sector and regulatory environment in Saudi Arabia specifically.
Industry
- Insurance – The article primarily focuses on the insurance sector, specifically Saudi insurers who are expected to see an increase in M&A activity.
- Financial Services – The M&A activities and stricter regulatory requirements discussed impact financial services within the insurance industry.
Financials
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Fitch Ratings | Source/Analyst | Company | A global leader in credit ratings and research, providing insights on the insurance M&A trends in Saudi Arabia. |
| Liva Insurance Company | Proposed Merger Partner | Company | One half of a proposed merger currently under review. |
| Malath Insurance Company | Proposed Merger Partner | Company | One half of a proposed merger currently under review. |
| Salama Cooperative Insurance | Proposed Merger Partner | Company | Engaged in a proposed merger with Saudi Enaya under review. |
| Saudi Enaya Cooperative Insurance Company | Proposed Merger Partner | Company | Engaged in a proposed merger with Salama under review. |
| The Mediterranean and Gulf Cooperative Insurance and Reinsurance Company (MedGulf) | Proposed Merger Partner | Company | Engaged in a proposed merger with Buruj under review. |
| Buruj Cooperative Insurance Company | Proposed Merger Partner | Company | Engaged in a proposed merger with MedGulf under review. |
| Arabian Shield Cooperative Insurance Company | Merged Company | Company | Recently completed a merger with Alinma Tokio Marine. |
| Alinma Tokio Marine | Merged Company | Company | Recently completed a merger with Arabian Shield. |
| Insurance Authority (IA) | Regulatory Body | Government | Recently assumed responsibility for insurance supervision in Saudi Arabia from the Saudi Central Bank. |