The formal launch of takaful in Oman in 2014 has so far failed to galvanise the insurance market in terms of the development of a wide range of new product segments, according to insurance industry executives.
Mr AR Srinivasan, CEO of Falcon Insurance, told Oman Economic Review: “Takaful companies have actually eaten into the business of existing companies. It had been believed that there were a lot of businesses which were not insured because there was no Islamic insurance.”
In particular, it had been widely believed that the majority of the residents had refrained from taking life cover mainly for religious reasons, and that therefore, the potential for growth would be higher in the family takaful segment compared to conventional life insurance.
However, Mr Srinivasan said: “We have not really seen any new product segment being introduced in Oman’s insurance sector. Instead, all takaful companies are competing with existing players in the existing businesses.”
Nevertheless, efforts are being made to nurture the fledgling takaful market. For instance, Al Madina Takaful, Oman’s first takaful insurance provider, last month launched a series of awareness programmes as part of its efforts to share and strengthen the knowledge and understanding of Islamic insurance with the wider community.
The company last month also launched a Hajj and Umrah travel Insurance scheme. The scheme provides coverage for pilgrims in case of accidental death, permanent total disability, emergency medical expenses, sickness, hospitalisation abroad, medical evacuation and loss of baggage and passport.
Islamic insurance accounted for 7.8% of total direct premiums in the Omani insurance market last year, with contributions totalling OMR39 million (US$101 million).
OMR1 = US$2.60