REINSURANCE OPTIMIZATION AND RISK RETENTION STRATEGIES FOR STRENGTHENING SAUDI ARABIAS MEDICAL INSURANCE MARKET UNDER VISION 2030

Saudi Arabia’s medical insurance market is the largest segment of the national insurance sector and is characterized by high premium retention, large member populations, rapidly developing health-service utilization, and continuing pressure on medical claims costs. These characteristics make reinsurance optimization fundamentally different from property and casualty reinsurance. In medical insurance, the central objective is not to transfer a large share of ordinary claims, but to determine how much predictable medical risk can be retained efficiently while protecting the insurer from high-cost individuals, adverse group experience, aggregate deterioration and emerging medical-cost shocks. This paper examines reinsurance optimization and risk-retention strategies for Saudi medical insurance under Vision 2030. It uses an integrative review of reinsurance, health-insurance risk and actuarial literature together with official Saudi Insurance Authority market evidence. The 2024 Saudi insurance market report shows that health insurance gross written premiums reached approximately SAR 42.25 billion, net written premiums reached SAR 41.40 billion, the retention ratio was 98%, and gross claims were approximately SAR 33.8 billion, producing a gross loss ratio of 83%. In the first quarter of 2026, health insurance remained the largest market segment, with gross written premiums of SAR 18.5 billion and 14.5 million beneficiaries. Against this background, the paper proposes a Saudi Medical Insurance Reinsurance Optimization Framework integrating medical underwritingclaims experience, TPA data, pricing, specific and aggregate stop-loss structures, capital tolerance, counterparty quality and continuous loss-ratio monitoring.