Oman: Upbeat growth prospects for insurance mart in the next 2-5 years
Source: Middle East Insurance Review | Nov 2018
The Omani insurance market is expected to have positive growth prospects in the next two to five years, even though short-term growth may be subdued, said S&P Global Ratings.
Omani lawmakers and regulators (ie, the Chamber of Commerce and Industry and the Capital Market Authority) are currently working toward finalising the framework for implementation of compulsory health insurance coverage for all private-sector workers in the sultanate, according to S&P’s report ‘Insurance Industry And Country Risk Assessment: Oman Property & Casualty’.
Similar regulations have also been implemented in neighbouring UAE where both Dubai and Abu Dhabi recorded massive premium growth during the implementation phase. Once these regulations are in force, the rating agency expects similar growth to the health premiums in Oman. This implementation is expected to be rolled out in phases, which might take 12-24 months to conclude.
In addition, Oman has a young, growing population that is progressively becoming aware of the benefits of insurance. The development of explicitly shariah-compliant insurance products in Oman will support awareness of the insurance sector and the benefits of insurance protection in certain segments of society.
S&P assessed industry and country risk for the P&C and medical insurance sector in Oman (BB/Stable/B) as moderate, reflecting its view of elevated country risk factors and its broadly neutral view of the insurance market.
The overall assessment reflects the relatively high economic and financial system risks typically faced by P&C insurers in Oman, along with favourable premium growth prospects in the long-term and overall profitable insurance market. It also reflects insurers’ effective use of reinsurance, which mitigates the potential exposure to Nat CAT losses, and the country’s improving regulatory framework and oversight, which are now in line with that of regional markets, but still below international standards. M