170 billion riyals still managed with yesterday’s methods: why it is time for Insurtech
Can you imagine that a sector worth around 170 billion riyals in the Gulf, and about 76.1 billion riyals in Saudi Arabia alone, is still in large part managed with traditional practices similar to those used 20 years ago?
This gap is not just an internal observation; it represents a major opportunity to rebuild the insurance sector and transform it into a faster, smarter, and more efficient ecosystem.
Today, an AI‑powered pricing engine can cut policy issuance time from a full hour to less than 15 seconds, and a single analytical model can improve risk‑prediction accuracy beyond what traditional, experience‑based models can achieve.
These shifts are no longer experimental pilots; they have started to clearly emerge in the Saudi market with the establishment of the new Insurance Authority, the expansion of mandatory insurance lines, and the rapid adoption of digital services by individuals and businesses.
The current landscape marks the beginning of a clear transitional phase—one that opens the door for new players, different business models, and pricing approaches that were not possible just a few years ago.
For anyone following this sector closely, Insurtech stands out as one of the most mature and fastest‑growing branches of fintech, a space that truly deserves deeper focus, because the decisions being made today will directly shape the insurance industry in the region over the coming years.
What is Insurtech and how is it linked to fintech?
Insurtech is, quite simply, the use of technology to enhance and reinvent insurance products and services—whether in how risks are measured, how policies are priced, how claims are managed, or how a faster and more flexible customer experience is delivered.
Because it relies on digital tools such as data analytics, artificial intelligence, and open APIs, it is considered a direct offshoot of financial technology.
If fintech is reshaping payments, lending, and wealth management, then insurtech is reshaping financial protection itself: how we understand risk and how we cover the needs of individuals and businesses.
For a long time, insurance sat on the sidelines of the innovation wave—but today, it is firmly back at the forefront.
Why the opportunity looks massive right now
When you look at the transformations underway in Saudi and Gulf insurance, it becomes clear that the market is not just growing—it is being fundamentally reshaped. Combine these shifts with the wide gap between current market size and what it should be, and you see a clear path to growth that could lift the Gulf insurance market from 170 billion riyals today to between 350 and 500 billion riyals over the coming years.
But what makes this moment specifically different from any time before?
There are four central variables creating an unprecedented environment for Insurtech to flourish in the region:
1. The establishment of the Insurance Authority: a new chapter begins
In 2023, insurance supervision moved from the Saudi Central Bank to the Insurance Authority, creating for the first time an independent regulator dedicated to market development, legislative modernization, and improved oversight. Throughout 2023 and 2024, the effects of this shift became clear—from unified controls to updated licensing requirements to stronger integration of insurance, vehicle, health, and business data across government systems.
The natural result is a market now operating within a clearer regulatory environment, more focused, and more open to testing new insurance models. An independent regulator close to the sector has created more space for innovation and boosted the ability of insurtech companies to enter, test, and scale without the old complications.
2. The expansion of mandatory insurance: creating entirely new demand
The market no longer rests solely on motor and traditional health insurance. Recent years have seen significant expansion of mandatory insurance types, including:
Health insurance for domestic workers
Visitor insurance
Professional liability insurance
Commercial insurance for small and medium enterprises
This expansion does not just add new products; it creates entirely new demand streams. These streams require fast issuance, precise pricing, digital distribution channels, and flexible solutions for SMEs—areas where insurtech companies outperform traditional models.
3. The wave of consolidations: the market reshaping itself
Over the past three years, Saudi insurance has experienced one of the largest restructuring waves in its history. Three mergers have already closed, with two more in process. This activity is not cosmetic; it is the natural result of mounting pressures:
Higher capital requirements, rising operational costs, and fierce competition in low-margin products like motor and health. Smaller and mid-sized insurers now realize that staying independent is harder, and that consolidation grants them greater compliance capability, product expansion, and capital efficiency.
The direct result: the sector is moving toward fewer but stronger entities, better able to invest in technology, rebuild core systems, and improve the customer experience across claims pricing, issuance platforms, and data connectivity.
4. Improved data quality: the technology environment matures
Better government data integration and the linking of vehicle, health, and business records has lifted pricing accuracy, made it easier to build advanced risk models, reduced human error, and created an environment more dependent on intelligence and analysis than on traditional estimation.
At Sadu Capital, we conducted an in-depth market study on Insurtech in Saudi Arabia and the Gulf, and the results have been encouraging. Clear regulatory shifts, expanding market size, and growing technology gaps all point us toward viewing this sector as one of the most important investment spaces in the coming years.
Leading emerging companies in Saudi Arabia
1. Rasan
Rasan stands as one of the most important success stories in the Saudi Insurtech market. Founded in May 2016, it converted to a joint-stock company in August 2022 before launching its IPO and listing on the Saudi stock exchange in June 2024. Today it carries a market cap of 9 billion riyals, making it one of the largest publicly traded Insurtech firms in the region.
2. BCare
A leading digital platform in motor insurance, BCare delivers a quick and easy experience that has directly shaped insurance buying habits in the Kingdom. It has expanded its customer base and played a key role in accelerating the shift to digital distribution through improved user experience and greater price transparency.
3. Thri by Tawuniya
Thri represents an important example of how large traditional insurers can embrace digital transformation. It offers an integrated digital experience spanning pricing, issuance, and claims management, demonstrating how established insurance companies can move toward faster, more flexible business models in response to shifting customer expectations and market maturity.
Lemonade: an American success story with lessons for the region
One of the standout stories in global insurtech is Lemonade, founded in 2015 by two tech entrepreneurs with a bold idea: to reinvent insurance from scratch using technology. From the start, it raised seed funding of about 13 million dollars from investors like Sequoia Capital and Aleph. It then completed additional funding rounds, raising a Series D led by SoftBank Group in 2019 that brought total investment to roughly 480 million dollars.
Within a few years, Lemonade transformed from a small startup into a global player in insurtech. It expanded from renters and homeowners insurance into auto, pet, and life coverage, then entered European markets. In 2020, it went public on the New York Stock Exchange under the ticker LMND.
Today, its market value tells the story of its success. As of November 2025, Lemonade's market cap stands at around 5.5 billion dollars. This success underscores the point that insurtech can create real value and disrupt traditional insurance, transforming financial protection into a service that is faster, clearer, and far better suited to the digital age
Where the real insurtech opportunity lies: a brief view for founders who want to build big companies
The market is still in the early stages of digital transformation. This creates a clear need to build a foundational technology layer that digitizes claims management end to end, automates the entire journey, and connects garages and hospitals. The sector also needs pricing tools built on data and artificial intelligence instead of traditional tariff tables, along with flexible underwriting platforms that integrate directly with regulators and core systems.
There is also a growing need for insurance solutions tailored to small and medium‑sized businesses, as well as new product categories such as cyber insurance, pet insurance, and coverage for assets that have historically remained uninsured. On top of that comes the importance of building flexible, on‑demand insurance products delivered through real‑time APIs and deep integrations with commerce and service platforms.
On the infrastructure side, insurers still require modern systems to manage policies, claims, and compliance, supported by B2B SaaS solutions that lift operational efficiency. Connecting insurers with reinsurers through data platforms and advanced pricing engines remains a critical missing piece to complete the modern insurance stack in Saudi Arabia and the wider Gulf. Once this core technology layer is in place, founders can draw on a set of proven international models that have already demonstrated their ability to build at scale—and adapt them to the local market.ts position the wealth transfer as a fresh economic engine, accelerating innovation across the Kingdom.
Global models that can be adapted in Saudi Arabia and the Gulf
Full‑stack digital carriers
Companies that build an integrated insurance platform combining underwriting, pricing, and claims in a single system. These carriers rely on automation and AI to deliver instant experiences and significantly lower costs, a model that has already succeeded in digitally mature markets through players like Lemonade, ZhongAn, and Acko.Embedded insurance
Insurance products embedded directly into other user journeys—such as e‑commerce, telecom, or financial services—so that coverage becomes part of the experience, not a standalone purchase. This model thrives in high‑usage markets and is led globally by players like bolttech and others enabling embedded distribution at scale.Health benefits platforms
Digital platforms that manage health insurance, subscriptions, and virtual care in one place, improving the patient journey while tying it directly to coverage. This approach is driving transformation in health insurance globally through companies such as Devoted Health, Oscar, and Collective Health.Specialized insurance platforms
Platforms that serve specific segments with an advanced digital experience—especially SMEs and high‑growth lines like cyber insurance. SME‑focused models simplify underwriting, issuance, and document management, as Next Insurance does, while cyber players like Coalition and At‑Bay rely on deep analysis of digital risk as a core part of their product.Insurtech infrastructure
Companies that build the underlying technology layer insurers themselves rely on: policy and claims administration, connectivity, compliance, and data analytics. This model is often the most sustainable and profitable over the long term, represented globally by firms such as Guidewire and CCC Intelligent Solutions.
A new era for insurance in Saudi Arabia and the Gulf
The insurance markets in Saudi Arabia and the wider Gulf are standing at a historical inflection point. New regulation, rising demand, and maturing technology together position the region to lead the next wave of insurtech. The future is not just about digitizing insurance, but about redesigning the entire system—from pricing to risk management. With Saudi Arabia emerging as a regional hub for financial innovation, it is well placed to lead in building globally competitive insurtech champions.
At Sadu Capital, this transformation is being followed closely, and the coming phase is viewed as rich with opportunity. There is strong conviction that Insurtech will drive a new wave of regional economic growth, and that founders who truly understand insurance, can build data‑driven solutions, and are ready to navigate regulation and partnerships will create companies with real impact in Saudi Arabia, the Gulf, and potentially worldwide. The focus is on backing teams that combine deep insurance insight, solid technical execution, and a clear, scalable problem thesis. For founders building along these lines, it is the right moment to explore partnership and investment. The shift has already begun—but the defining players have yet to emerge, which makes this moment a rare opportunity to build the next generation of insurance companies in the region
