Financial Review

9.1 Performance and Prospects

Saudi Re continued to deliver strong and stable performance during 2025, supported by the Company’s long-term strategic direction and its focus on sustainable growth. Throughout the year, Saudi Re successfully advanced its diversification strategy, strengthened its presence in key markets, and enhanced its contribution to risk discipline, and sustainable business practices – continued to guide operational decisions and underpin positive business outcomes.

Saudi Re maintained its position as a leading contributor to the local reinsurance market by supporting the increasing local retention requirements introduced by the Insurance Authority. The mandatory cession share, which increased from 25٪ in 2024 to 30٪ in 2025, further reinforced the role of local reinsurers and aligned with the Company’s strategic emphasis on supporting national market development. Saudi Re has continued to be a key partner to local insurers, offering capacity and expertise across a broad mix of reinsurance solutions.

Reflecting its international expansion ambitions, the Company achieved significant progress in strengthening its global footprint. A major milestone during the year was the launch of Saudi Re’s second branch (first branch was in Malaysia) in India, a fast-growing reinsurance market with sizable, long-term potential. The Company obtained all required regulatory approvals to establish a branch in the GIFT City (Gujarat International Finance Tec-City), one of Asia’s emerging financial hubs. These expansions are expected to diversify revenue sources, deepen international relationships, and enhance Saudi Re’s access to new business opportunities across Asia.

Saudi Re’s financial strength and prudent business model were reaffirmed by S&P Global Ratings, which affirmed the Company’s “A-” rating and upgraded the outlook to Positive from Stable. This improvement reflects the Company’s strengthened capital position, growing business profile, and resilient operating performance.

Capital Structure Enhancements

Saudi Re continued to strengthen its financial position in 2025, increasing its capital by 90٪ to reach X 1.7 billion through two successive capital increases, as outlined below:

First: Capital Increase through the Entry of the Public Investment Fund (PIF) as a Strategic Partner

The company’s capital was increased from X 891 million to X 1,158.3 million through the issuance of 26.73 million new ordinary shares. These shares carry a nominal value of X 10 per share and were issued at an offering price of X 16 per share, totaling an aggregate value of X 427.68 million. This capital hike marks the entry of the Public Investment Fund (PIF) as a strategic partner in the company.

Second: Capital Increase through the Issuance of Bonus Shares

On 16 March 2025, the Board of Directors recommended a further 46.6٪ capital increase, implemented through:

• The issuance of 51.48 million bonus shares to existing shareholders (at a rate of 4 shares for every 9 shares held), representing a 44.44٪ increase in capital.
• The allocation of 2.5 million shares for the establishment of company’s Long-Term Incentive Plan (LTIP) for employees, representing 2.16٪ of the company’s capital.

These strategic initiatives reflect the Company’s commitment to strengthening its capital base, supporting future expansion, and aligning employee incentives with long-term performance and shareholder value creation.

As a result, Saudi Re became the highest-capitalized company in the insurance sector listed on the Saudi Exchange and the largest by capital in the reinsurance sector across the Middle East.

Financial Performance

Revenue growth in 2025 remained strong across most business lines, consistent with the Company’s diversification strategy. The Property and Casualty segment increased by 48٪ from X 1,081.7 million to X 1,601.7 million whereas the Life and Health segment increased by 47٪ from X 48.2 million to X 70.7 million.

Investment income also increased meaningfully. Excluding the impact of Probitas, higher investment income was driven by expanded investment volumes following the Probitas divestiture and the capital increase proceeds. These funds were largely deployed into sukuk and money market instruments, resulting in a stronger investment performance compared to the prior year.

Saudi Re continues to maintain a well-balanced underwriting portfolio with 36٪ in international business (percentage of GWP), while maintaining a focus on risk selection that reflects positively on underwriting performance. Steady growth driven by business written in other markets, including Asia and the Company’s home market – Saudi Arabia, has positioned Saudi Re for further expansion across the wider region.

9.2 Revenue

Saudi Re maintained a strong 5-year growth momentum with a 24٪ increase in GWP, reaching X 2.93 billion in 2025.

	2025 (X ’000)	2024 (X ’000)	2023 (X ’000)	2022 (X ’000)	2021 (X ’000)	2020 (X ’000)
Gross Written Premium	2,927,741	2,359,842	1,596,809	1,403,281	1,115,880	935,114

Reinsurance Revenue reached X 1.6 billion, during the year, marking 48٪ growth year on year. This performance was driven by growth across most business lines, leading to a positive outcome in the net reinsurance result.

Reinsurance highlights (IFRS 17)

	2025 (X’000)	2024 (X ’000)	2023 (X ’000)	2022 (X ’000)
Reinsurance revenue	1,672,498	1,129,966	627,187	696,998
Reinsurance service result	170,726	142,532	119,762	83,589
Net investment income	127,740	440,181	60,388	8,379
Net financial result	64,980	402,752	25,762	9,864
Share of profit of equity accounted investee	–	2,510	40,071	33,105
Net income after zakat and tax	140,044	474,812	124,429	76,052

Revenue highlights (IFRS 4)

	2022 (X ’000)	2021 (X ’000)	2020 (X ’000)	2019 (X ’000)	2018 (X ’000)
Gross written premiums	1,403,281	1,115,880	935,114	792,848	721,605
Retroceded premiums	462,920	123,898	123,898	127,844	72,997
Net written premiums	898,599	958,968	772,639	645,605	616,896
Net earned premiums	927,891	854,730	647,120	642,535	613,615
Total revenues	942,706	874,406	659,814	660,711	630,083

9.3 Reinsurance revenue by line of business

Saudi Re maintains an ongoing strategy to enhance the performance of its business lines, capitalize on upgraded credit ratings, and leverage international market hardening. Strategic actions in line with this overarching plan triggered underwriting penetration into new international lines of business, enabled the Company to reconsider and improve its reinsurance terms for some business lines, and included non-renewal of part of the book of business that was underperforming.

Reinsurance revenue by lines of business

	2025 (X ’000)	2024 (X ’000)	2023 (X ’000)	2022 (X ’000)
Property and Casualty	1,601,752	1,081,768	604,286	631,595
Life and Health	70,746	48,198	22,901	65,403
Total	1,672,498	1,129,966	627,187	696,998

Reinsurance revenue by geography

	2025 (X ’000)	2024 (X ’000)	2023 (X ’000)	2022 (X ’000)
Kingdom of Saudi Arabia (KSA)	900,337	479,877	216,821	255,592
International	772,161	650,089	410,366	441,406
Total	1,672,498	1,129,966	627,187	696,998

Reinsurance service results by line of business

Saudi Re’s underwriting strategy yielded a 20٪ improvement in the reinsurance service result, with profit across most business lines.

	2025 (X ’000)	2024 (X ’000)	2023 (X ’000)	2022 (X ’000)
Property and Casualty	161,383	131,159	111,665	78,387
Life and Health	9,343	11,373	8,097	5,202
Total	170,726	142,532	119,762	83,589

Reinsurance service results by geography

The reinsurance service result for the Saudi market declined due to several large losses. In contrast, the international portfolio recorded improved results despite the impact of major events, including the Thailand earthquake.

	2025 (X ’000)	2024 (X ’000)	2023 (X ’000)
KSA	106,233	110,581	86,807
International	64,493	31,951	32,954
Total	170,726	142,532	119,762

Reinsurance service expenses by line of business

	2025 (X ’000)	2024 (X ’000)	2023 (X ’000)	2022 (X ’000)
Property and Casualty	1,407,052	951,333	495,339	531,436
Life and Health	61,089	36,490	14,435	59,732
Total	1,468,141	987,822	509,774	591,168

Reinsurance service expenses (IFRS 17)

	2025 (X ’000)	2024 (X ’000)	2023 (X ’000)	2022 (X ’000)
Incurred claims and other directly attributable expenses	1,451,900	945,506	611,206	597,537
Changes that relate to past service – adjustments to the Liability for Incurred Claims (LIC)	(115,847)	(110,310)	(249,212)	(83,069)
Losses on onerous contracts and reversal of those losses	73,863	113,273	132,877	65,268
Reinsurance acquisition cash flows amortization	58,225	39,353	14,903	11,432
Total	1,468,141	987,822	509,774	591,168

Underwriting costs and expenses (2018-2022) (IFRS 4)

	2022 (X ’000)	2021 (X ’000)	2020 (X ’000)	2019 (X ’000)	2018 (X ’000)
Gross claims paid	(537,845)	(471,216)	(481,191)	(436,701)	(389,327)
Retroceded premiums	75,974	61,707	181,476	60,006	24,638
Net claims incurred	(595,044)	(565,312)	(391,980)	(417,070)	(404,054)
Policy acquisition costs and profit commissions	(218,199)	(232,404)	(194,682)	(172,781)	(172,472)
Other underwriting expenses	(1,995)	(5,063)	(4,002)	(3,616)	(1,997)
Total underwriting costs and expenses	(815,238)	(802,779)	(590,665)	(593,467)	(578,523)
Net underwriting income	127,468	71,626	69,149	67,244	51,560

Net finance expense/income from net reinsurance contracts

	2025 net (X ’000)	2024 net (X ’000)	2023 net (X ’000)	2022 net (X ’000)
Interest accreted	(65,115)	(52,006)	(39,110)	(25,435)
Effect of changes in interest rates and other financial assumptions	(19,425)	6,576	(25,733)	(9,370)
Effects of measuring changes in estimates at current rates and adjusting the contractual service margin (CSM) at rates on initial recognition	9,922	(4,214)	25,959	24,908
Foreign exchange differences	11,858	12,125	4,259	11,381
Total	(62,760)	(37,429)	(34,626)	1,484

Investment income

Investment assets portfolio increased as a result of the PIF capital raise and funds from operations. Investment assets were actively allocated into fixed term deposits and fixed income instruments to lock in higher yields for a longer duration. This strategy in the high-interest environment led to increased returns from investments and allocation to longer duration and diversification of good quality investments.

	2025 (X ’000)	2024 (X ’000)	2023 (X ’000)	2022 (X ’000)
Investment income from financial investments measured at amortized cost	96,173	68,240	53,278	38,728
Net income from financial investments measured at fair value	38,152	14,414	11,425	(25,289)
Gain on sale of investment in an equity accounted investee	–	365,949	–	(3,719)
Investment management expenses	(6,224)	(9,619)	(4,208)	(1,340)
(Charge)/reversal of expected credit losses	(361)	1,196	(108)	8,379
Net investment income	127,740	440,181	60,388	33,105
Share of profit of equity accounted investee	–	2,510	40,071	41,484
Total	127,740	442,691	100,458	74,589

9.4 Net income

	2025 (X ’000)	2024 (X ’000)	2023 (X ’000)	2022 (X ’000)
Total income for the year before zakat and tax	190,635	505,716	158,562	91,318
Zakat and tax charge for the year	(50,591)	(30,904)	(33,948)	(15,266)
Net income for the year after zakat and tax attributable to the shareholders	140,044	474,812	124,429	76,052
Basic and diluted earnings per share for the year	0.84	3.69	0.96	0.59

Comprehensive income

	2025 (X ’000)	2024 (X ’000)	2023 (X ’000)	2022 (X ’000)
Net income for the period after zakat and tax attributable to shareholder	140,044	474,812	124,429	76,052
Financial investments at FVOCI – net change in fair value	7,005	1,560	711	(8,285)
Re-measurement gain/(loss) on employees’ end of service benefits	2,555	(12,890)	(3,734)	(462)
Share of foreign currency translation reserve of an equity accounted investee	–	1,612	5,038	(8,258)
Total comprehensive income for the year	149,604	465,093	126,445	59,047

9.5 Assets

The Company’s growth was also reflected in assets, which increased by X 1.2 billion from the previous year. This rise is mainly attributed to improved liquidity, a strengthened investment portfolio, increased insurance activities, enhanced equity investments, and overall financial growth.

	31 December 2025 (X ’000)	31 December 2024 (X ’000)	31 December 2023 (X ’000)	31 December 2022 (X ’000)
Cash and bank balances	94,715	73,465	87,905	31,556
Financial investments at fair value through income statement	682,979	94,825	154,456	272,653
Financial investments at fair value through other comprehensive income	546,200	285,915	141,633	119,921
Financial investments at amortized cost	1,854,984	1,916,208	1,127,330	1,030,133
Reinsurance contract assets	120,273	92,128	77,827	104,791
Retrocession contract assets	907,625	627,928	439,593	189,246
Prepaid expenses, deposits, and other assets	218,622	180,821	195,602	106,540
Property and equipment, net	29,448	29,553	30,524	30,807
Intangible assets, net	5,274	6,163	6,615	5,572
Investment in an equity accounted investee	–	–	208,990	160,687
Statutory deposit	169,810	89,100	89,100	89,100
Accrued income on statutory deposit	6,785	22,314	22,057	22,084
Total assets	4,636,715	3,418,420	2,581,631	2,163,093

9.6 Liabilities

The Company’s total liabilities grew by 35٪, owing to business growth during the year.

	31 December 2025 (X ’000)	31 December 2024 (X ’000)	31 December 2023 (X ’000)	31 December 2022 (X ’000)
Margin loan payable	56,797	56,797	56,797	56,797
Reinsurance contract liabilities	2,189,518	1,585,142	1,214,795	845,925
Retrocession contract liabilities	33,388	16,932	190	12,156
Accrued expenses and other liabilities	61,165	46,564	76,864	176,413
Employees’ end of service benefits	30,133	30,352	18,633	13,868
Provision for zakat and tax	67,311	41,671	41,548	17,533
Accrued commission income payable to IA	6,785	29,046	25,982	23,219
Total	2,445,097	1,806,504	1,434,809	1,238,887

9.7 Equity

Total equity increased to X 2.19 billion at the end of 2025, compared to X 1.61 billion at the end of 2024, representing a 36٪ increase during the year. This growth reflects improved profitability, in addition to the strengthening of the Company’s capital base following the capital increase associated with the Public Investment Fund’s entry as a strategic shareholder.

Excluding the impact of the capital increase, total equity grew by approximately 10٪, reflecting the Company’s improved operational performance and earnings during the year.

	31 December 2025 (X ’000)	31 December 2024 (X ’000)	31 December 2023 (X ’000)	31 December 2022 (X ’000)
Share capital	1,698,100	891,000	891,000	891,000
Share premium	151,680
Statutory reserve	190,902	162,893	67,931	43,045
Retained earnings	182,530	585,294	194,358	94,815
Share-based payment reserve	11,118	–	–	–
Treasury shares	(25,000)	–	–	–
Other reserves	(17,713)	(27,272)	(6,468)	(11,677)
Total equity	2,191,617	1,611,915	1,146,822	1,017,184

9.8 Dividends

Saudi Re announced that its Board of Directors has recommended, on 21 March 2025, to increase the Company’s share capital from X 1,158,300,000 to X 1,698,100,000 through the issuance of bonus shares to shareholders. The capital increase aims to support the Company’s growth and strengthen its financial position.

The General Assembly approved on 9 October 2025 the capital increase through the capitalizing X 539,800,000 from retained earnings, granting 4 bonus shares for every 9 shares owned. Additionally, 2,500,000 shares allocated to the Company’s Long-Term Employee Incentive Program. No cash dividends were distributed during 2025.

Dividend Policy

The Company’s Dividend Distribution Policy depends on the achievement of returns and gains for investors in the Company’s shares where the impact of such returns and gains extends to include the following pillars:

(1) Distribution of sufficient cash profits to the Shareholders, after considering the various factors at the time of distribution including the Company’s financial state, working capital requirements, distributable profits, credit limits available to the Company in addition to the overall economic situation.

(2) Granting free shares to Shareholders if the conditions and requirements are met with regard to retained profits, Shareholder equity components within the Company’s financial statements and balance sheets.

(3) Priority, whether for cash profits or grant shares, shall be given to Shareholders registered in the records of the Depository Center of the Financial Market at the end of the trading day on which the general assembly was convened, upon obtaining the approvals of the concerned authorities.

(4) The Company shall pay the profits allocated for distribution to the Shareholders at the times determined by the Board.

9.9 Zakat, taxes, fees, and other charges

Description	Reasons	Paid amount (X ’000)	Outstanding amount at end of financial period (X ’000)
Zakat and income tax	The Company’s share according to zakat and tax regulations in the Kingdom	21,222	67,311
WHT	The Company’s share according to zakat and tax regulations in the Kingdom	21,997	5,002
VAT	The Company’s share according to zakat and tax regulations in the Kingdom	106,618	14,219
IA fees	Supervision fees for the Insurance Authority	15,200	1,546
GOSI	Social insurance contributions for Company employees to the General Organization for Social Insurance	3,910	334

9.10 Solvency and Rating

Saudi Re continues to strengthen its competitive position through profitable growth and strategic diversification across domestic and international markets. The Company maintains a disciplined approach to risk, keeping exposure to catastrophe and other large-scale risks at moderate levels while ensuring capital adequacy remains above the “AAA” threshold in S&P’s model.

The recent affirmation of Saudi Re’s rating at “A-” with a “Positive” outlook by S&P Global Ratings is underpinned by the following strategic pillars:

• Robust Competitive Position: Over the past two years, the Company has demonstrated strong market competitiveness, driven by exponential top-line growth and a diversified global footprint.
• Superior Underwriting Excellence: Saudi Re continues to deliver technical performance that consistently outperforms many of its regional and international peers, reflecting a disciplined approach to risk selection.
• Exceptional Capital Resilience: The Company maintains capital adequacy buffers that exceed the 99.99٪ confidence level according to S&P’s rigorous capital model, ensuring long-term financial stability.

Moody’s upgraded Saudi Re’s insurance financial strength rating to A2 with a stable outlook, reflecting the Company’s strengthened capitalization, improved business profile, and consistent underwriting discipline. The upgrade recognizes Saudi Re’s solid market position in the Kingdom, expanding international presence, prudent risk selection, and resilient earnings profile, reinforcing confidence in its ability to navigate market cycles and sustain long-term financial strength.

Saudi Re’s financial strength is underpinned by several key factors:

• Strengthened business and financial profiles following Saudi Arabia’s Public Investment Fund’s acquisition of a significant minority stake in Saudi Re and the implementation of enhanced domestic cession regulations, which the Company is well positioned to take advantage of to support its market position and growth prospects in Saudi Arabia.
• The expectation that Saudi Re will continue to benefit from ongoing growth and diversification of the Saudi economy, and government initiatives aimed at fostering growth in the local insurance industry.
• Despite potential challenges arising from macroeconomic uncertainty and financial market volatility, Moody’s expects Saudi Re’s profitability to remain good over the next 12-18 months, supported by both underwriting performance and investment returns. Saudi Re’s good geographical mix along with the development of new products will positively contribute to continued diversification, mitigating potential challenges.

• The stable outlook reflects Moody’s expectation that Saudi Re will maintain good underwriting discipline and profitability, while simultaneously keeping strong capital adequacy and assets quality.