Omani insurers have achieved a marginal 0.3% growth in direct gross premiums to OMR358.2 million (US$931.6 million) for the first three quarters of 2017.
Most classes of business witnessed varying levels of decline, except health insurance and group life insurance which recorded an increase of 17% and 25%, respectively, reported Times of Oman, citing a statement from the Capital Market Authority (CMA).
The decline in most kinds of insurance business is attributed to austerity measures introduced in the wake of the oil price fall. Engineering insurance saw a reduction of 3% in premiums compared to the same period in the past year. Transport, property, motor, individual life and liability segments fell by 19%, 7%, 8%, 21% and 3%, respectively.
The report showed that direct premiums of motor insurance constitutes 33% of the market share, while health insurance represents 31%.
Motor insurance segment still maintains the leading position in terms of volume in the insurance market. However, health insurance has achieved faster growth. The average growth of health insurance in the Sultanate in the past five years was 34% and this business is expected to see further growth due to the government’s plan to implement compulsory health insurance for all employees in the private sector.
National Life and General Insurance is the largest insurance firm with a share in direct premiums in the first three quarters of 2017 of OMR90 million (25%), followed by Dhofar with 10%, Oman United with 9%, AXA Insurance with 8% and Al Madinah with 6%.
There were 20 insurers operating in Oman at 30 September after the mergers of Arabian and Falcon Insurance and Muscat Insurance with Muscat Life Insurance.
Market to reach $2.1 bln in 2021
The Omani insurance market is projected to reach US$2.1 billion in 2021, which translates into a five-year CAGR of 12.1%, according to in a report published by Alpen Capital.
Growth in the life segment is expected to be the highest, supported by a rising population (3.1% annualised average growth), the implementation of mandatory health insurance from 2018 and the wider economic development. The Sultanate is witnessing a series of construction projects in logistics, ports, railways and tourist attractions in a bid to diversify revenue sources.
Additionally, amendments to the insurance law in 2014 require insurers to double their capitalisation level from OMR5 million to OMR10 million. The move improves the risk-taking ability of insurers, thereby expanding underwriting business. Given the developments, the insurance penetration and density in the country are projected to reach 2.4% and $453.1 respectively by 2021, said the report. M
OMR1 = US$2.60