The current economic slowdown caused by the decline in oil prices has affected the insurance sector in Oman, with the motor business suffering a major hit, according to a senior insurance executive.
“The insurance sector is directly linked to the nation’s economy,” Mr Philip K Philip, Group CEO of the Muscat Insurance Company and Muscat Life Assurance Company, told the Times of Oman. “Any deviation or movement in the economic situation will have a direct impact.”
“Around 40% of the market premium is from motor insurance and the growth of the automobile industry has fallen dramatically,” Mr Philip said.
The annual growth of the motor industry was previously in the double digits, but now it has been reduced to a single digit. “If there are no new vehicles coming in, the growth of vehicle insurance is also affected,” he added.
He also confirmed that engineering insurance is witnessing a slump these days because of a slowdown in construction projects.
He added: “Due to reduced construction activities, the import of construction materials is reduced which adversely affects related marine insurance.”
On life and health insurance, Mr Philip said: “Of late, we have seen redundancies in the construction industry. So insurance requirements for employees, such as health and life insurance, have also been affected.”
Another industry player said that there is a trend among employers, when renewing medical insurance policies, to opt for lower benefits or deductibles, so as to cut premium costs.