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S&P Global Ratings said in its industry credit outlook published this month that the GCC Islamic insurance sector continued to expand despite regional volatility. The report placed first-half 2026 revenue growth at nearly 15 percent year on year, up from the 10 percent achieved across full-year 2025. Saudi Arabian takaful operators accounted for 89 percent of total GCC revenues in 2025, according to S&P Global Ratings data that highlighted the kingdom’s dominant position.
Growth in Saudi Arabia slowed to 9.6 percent in 2025 after 11.4 percent in 2024 and 27 percent in 2023 before rebounding strongly to 14 percent in the first six months of 2026, the ratings agency reported. Takaful premiums in the United Arab Emirates grew more than 20 percent in 2025 following a 40 percent surge the previous year, with S&P Global Ratings projecting 12-15 percent expansion this year. Qatar’s listed Islamic insurers recorded a 1 percent decline in top-line revenues through June 2026 and are expected to remain essentially flat for the balance of the year, S&P Global Ratings indicated.
Aggregate net earnings for GCC Islamic insurers rose 12 percent year on year during the first half of 2026, figures from the S&P Global Ratings assessment showed. Saudi entities led the advance with a 14 percent increase in profits while investment income climbed 20 percent to approximately $907 million. The report attributed the earnings resilience in part to favourable returns on invested assets even as the operating environment remained challenging.
Motor and medical insurance lines, which together generate more than 70 percent of sector revenues, continued to shape performance, according to the S&P Global Ratings outlook. The agency noted that exposure to war-related claims has remained limited because standard policies exclude such risks and cede them to reinsurers. This reinsurance structure has supported stability across the takaful market amid ongoing regional conflicts.
Credit ratings or outlooks stayed stable for 10 of the 13 rated GCC Islamic insurers, S&P Global Ratings said. Shareholders’ equity across the sector grew 13 percent in 2025, adding a further layer of capital strength, the report found. “We expect credit ratings on GCC Islamic insurers to remain largely stable over the next 12 months,” the agency stated.
A new regulatory framework set to take effect in Saudi Arabia in January 2027 will likely pressure smaller players and encourage consolidation, S&P analysts warned in the document. The changes aim to raise risk management and capital standards across the industry, according to the outlook. The projections build on several years of consistent double-digit growth that has characterised the takaful segment in key GCC markets.
