The 5-Day Rule: How Insurers in Saudi Arabia Can Lead the Race to Instant Claims Settlement

In a move to reduce claims settlement timelines across the insurance sector, the Saudi Arabia Insurance Authority proposed a 5-day rule in November 2025. It amends Article 44 of the Executive Regulations of the Cooperative Insurance Companies Control Law, lowering processing time for individual insurance claims from the current 15 days. Other Gulf Cooperation Council (GCC) nations may soon follow. While this comes off as delightful news for the policyholders, insurers face a structural shift. Insurance carriers must now move toward a more agile operating model that allows them to meet tighter deadlines without compromising compliance or customer experience (CX). But how can this be achieved?

On one hand, continuing with conventional approaches, such as functioning on fragmented workflows and manual validations, isn’t effective anymore. On the other hand, abandoning existing processes altogether that have buttressed your business for years could introduce compliance gaps, operational disruption, and new processing risks. This is a tricky situation. In this article, we discuss steps insurers can take to build solid foundations for enabling instant claims settlement without dismantling existing processes.

The Current Reality: Why Five Days Feels Overwhelming

At present, individual claims are typically expected to be settled within 15 working days of receiving complete documentation, under a strictly regulated cooperative (Takaful-based) model supervised by the Saudi Central Bank (SAMA). To orchestrate day-to-day claims workflows, insurance carriers rely on legacy core systems and apps. Claim processing is often viewed as a back-office chore. From First Notice of Loss (FNOL) intake and verification to paper-heavy documentation, siloed underwriting and claims operations, and delayed reporting, the process is fragmented, manual, slow, and people-driven.

While rising digital consumer expectations, driven by brands such as Amazon, Netflix, and Spotify, have already challenged this model, many carriers have largely remained unchanged. That said, persisting with this work methodology can prove detrimental when the five-day settlement rule comes into force. Because investigating, evaluating, and settling claims at scale through manual coordination will no longer be sustainable.

In the claims cycle, some cases pause while waiting for document validation, whereas others stall between departments. Large, complex claim submissions require thorough investigation to prevent fraud. These instances can make it difficult to meet the five-day settlement regulations and frustrate policyholders. So, what can insurers do? Instead of worrying about the inevitable, insurers have an opportunity to redesign their claims workflows to put them ahead of the curve. Not just to meet regulatory compliance but also to address the expectations of an increasingly digital and diverse customer base.

Key takeaway: Carriers must redesign their claims workflows to meet regulatory requirements and satisfy the growing digital appetite of their consumers.

A Clear Divide is Emerging: Leaders vs Laggards

Today, insurers face climate-driven catastrophe volatility, rising expectations around consumer outcomes, and AI accountability. Amid this landscape, legacy models are showing clear limits. Manual handoffs, fragmented data ecosystems, and reactive workflows increase revenue leakage, Loss Adjustment Expenses (LAE), and cycle times, while frustrating policyholders who prefer more control, access, and visibility over products they own. The growing prominence of self-service portals reflects this shift. Consequently, the manual claims cycle doesn’t sit well with this audience as it adds friction and delays.

Insurers now have two choices: Stay reactive or become proactive (strategic).

I) Reactive approach:

The first path seems easy on the surface, as many organizations have tactically leveraged this technique multiple times in the past. This includes increasing the number of review layers and adding temporary workflow patches. It works quite well initially, but these fundamentals increase operational costs and employee fatigue. While people remain at the core of every major transformation, they must be paired with new emerging technologies that introduce levels of innovation previously unimaginable.

II) Strategic approach:

On the other hand, insurers who redesign claims processes proactively using new-age intelligence, such as AI and automation, can improve the bottom line. It can be discomforting at first as you shift to a new operating model, but it ultimately proves more practical and rewarding. Here is how:

• Self-service portals capture claims automatically.
• AI supports triage and prioritization.
• Compliance monitoring happens in real time.
• Customers can track their claims at their convenience, not just during customer support hours.

That said, becoming strategic doesn’t mean abandoning existing legacy workflows. But it’s about retaining the core foundation while modernizing its capabilities. So, do you still view the 5-day rule as an opportunity or threat?

Key takeaway: The future of claims belongs to insurers who proactively modernize their core processes. Not those who remain reactive, layering short-term fixes that are no longer compatible with modern business needs.

What Does Winning Looks Like

Transforming the claims process end-to-end can help drastically reduce administrative overhead and leakage while empowering agents to leverage their expertise on more complex cases and on signing off or validating AI-assessed claims. Here is how this looks in practice:

• Automated claims classification:

  Policyholders can submit claims via a digital self-service portal, sharing the required details and documents. The system automatically verifies and consolidates this data. Confirms eligibility and coverage within seconds. And segregates claims by type, urgency, and risk level.

• Real-time policy checks:

  By combining business rules, contextual routing, and real-time exception handling, an advanced insurance management system helps insurers reduce TAT and improve consistency in claim adjudication.

• Streamlined workflows that meet compliance:

  Claims flow seamlessly without bottlenecks. Claim officers focus on complex cases while supervising automatically approved submissions to maintain compliance. This enables faster settlements, builds customer trust, and supports higher renewal and retention rates.

In a nutshell, it’s a win-win for insurers.

Key takeaway: Smart claims processing introduces innovation and agility into an otherwise complex, highly regulated insurance industry without compromising business rules or compliance. It facilitates faster settlements and increases customer satisfaction.

How to Get There: Meet InsureEdge, A New-Age insurance Management System

For insurance carriers, CX matters now more than ever. This is where InsureEdge naturally fits. It’s a unified, future-ready insurance management platform designed specifically for GCC insurers to help them navigate evolving regulations, such as the 5-Day rule, while catering to an increasingly diverse and demanding digital customer base. It can automate every insurance workflow, including underwriting, policy administration, and claims processing.

Business outcomes of transitioning to InsureEdge:

• Workflows align with regional regulations that can help reduce compliance risk and operational rework.
• Insurers receive regulation-compliant reports (for example, Sharia-compliant requirements) that simplify submissions and accelerate turnaround times.
• Embedded AI agents automatically triage, validate, and route policyholder claims, reducing manual intervention and shortening settlement cycles.
• Digital-first self-service portals capture, verify, and validate policy data in real time, minimizing errors and manual follow-ups.
• Policyholders can check their claim status in real time from the moment they submit it, enabling proactive communication and fostering transparency.

Closing Thoughts: Compliance is Only the Beginning

When the 5-day settlement mandate kicks in, insurers won’t have any option but to comply with. In those moments, carriers that continue to stick with traditional, paper-intensive legacy workflows will find it increasingly difficult to keep up. Reactive measures, such as increasing headcount or adding more review layers, can further derail businesses from reaching their goals. Instead, now is the right time to build a future-ready fortress for your insurance business.

Don’t treat this as a compliance burden; instead, see it as an opportunity to modernize, differentiate, and lead. This is what the new-age consumer wants, too. They don’t just want the most customized policy or the one with the lowest premium, but one that settles quickly, transparently, and without friction. Are you ready to make this shift?