Investment leader and financial markets expert Samer Choucair praised the decision by the Saudi Insurance Authority to mandate the transition of the insurance and reinsurance sector to a Risk-Based Capital (RBC) framework starting January 1, 2027.
A Strategic Transformation for the Sector
Samer Choucair described this move as a major strategic shift that reflects the maturity of Saudi Arabia’s financial sector and aligns with the latest global practices.
He noted that beginning parallel implementation during 2026 will ensure a smooth transition, enhancing companies’ ability to manage risks and strengthening overall confidence in the sector.
What Is the RBC Framework?
Choucair explained that the RBC framework is an advanced regulatory system that directly links capital requirements to the actual level of risk each company faces, rather than relying on traditional fixed ratios.
This framework is based on a comprehensive assessment of multiple risk categories, including:
- Underwriting risk
- Market risk (linked to fluctuations in equities and bonds)
- Credit risk
- Operational and liquidity risks
He added that this approach, inspired by successful global models, will allow companies to adopt advanced internal models and enhance capital through subordinated debt instruments, providing greater operational flexibility.
Strategic Timing and Market Growth
Samer Choucair emphasized that the timing of this transition is both strategic and well-calculated, as the Saudi insurance sector is experiencing strong growth.
Market size is expected to reach between SAR 80–100 billion by the end of the decade.
The new framework aims to:
- Support the national insurance sector strategy
- Increase risk-bearing capital from SAR 25 billion to SAR 50 billion by 2030
- Encourage diversification into long-term assets such as government bonds, infrastructure projects, and renewable energy
Investment Implications
In his investment analysis, Choucair stated that this transformation will reshape the Saudi market structure.
- Strong companies with advanced risk management will stand out
- Credit ratings are expected to improve
- Share prices on the Saudi Exchange (“Tadawul”) may benefit
He also predicted that the new framework will:
- Drive mergers and acquisitions to create larger financial entities
- Increase the sector’s attractiveness to foreign investors and global institutions
Market Outlook
Based on this shift, Samer Choucair expects that shares of companies well-prepared for the transition could rise between 15% and 30% over the next 18 to 24 months.
Aligned with Vision 2030
Choucair concluded by emphasizing that this transformation is fully aligned with the Financial Sector Development Program and Saudi Vision 2030.
It will enable insurance companies to play a greater role in financing major projects and strengthening national savings.
Advice to Investors
He advised investors to closely monitor listed companies’ reports during 2026 and focus on major players with strong financial solvency.
He stressed that early positioning for this new phase of investment maturity is the key to achieving sustainable strategic returns.