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Oman: Insurers blame high motor payouts for lower profits

Source: Middle East Insurance Review | May 2017

Road accidents in Oman cost local insurers around US$27 million in 2016, according to official figures released by the Capital Market Authority.
 
   Many insurers have reported a decrease in profits over the last four years due to the “high cost of accident payouts”, reported Gulf News.
 
   The insurance payouts cover damage to property such as lamp poles, pavements, road dividers, private homes, and shops, as well as vehicles. The compensation payments also cover medical treatment and payouts to deceased victims’ families.
 
   The head of one insurer, who did not want to be identified, said that his company’s net profit had decreased by 7% in 2016 due to the high cost of motor payouts. “I blame the reckless drivers who don’t abide by the traffic rules,” he said.
 
   “The next three years are going to be difficult. Only big insurance companies will make it through,” said an employee at a local insurer who asked not to be named.
 
   In 2016, the Royal Oman Police handed out more than four million traffic violation tickets, estimated at up to $2.4 million.
 
   The government spent more than $100 million in the last three years on road improvements in order to reduce road accidents, an official at the Ministry of Transport and Communications told Gulf News.
 
   As many as 692 people were killed in road accidents in 2016, compared to 975 in 2015, according to the National Centre for Statistics and Information. Speeding and wrong overtaking have been cited as the main causes of road accidents in the country.
 
   Oman has the second-highest number of road accidents in the GCC after Saudi Arabia. M 
 
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