Oman Insurance Company (OIC) has recorded a GWP of AED3.70bn ($1bn) for 2018, down marginally from AED3.72bn in 2017, making the company once again the largest insurer in terms of gross premiums.
In a statement, OIC said its underwriting profitability increased by 12% (prior one-off claim reserving) in 2018 compared to the previous year reflecting a prudent risk selection and pricing, an effective risk diversification as well as a strong top line.
While the overall premium was unchanged compared to 2017, the employee benefits division had a strong 10% growth supported by a balanced and profitable portfolio in spite of the very competitive market environment.
The insurer has adopted new accounting principles (IFRS 9) that allow it to implement cautious and forward-looking provisioning. These new accounting principles, on top of one-off proactive measures to notably bolster the claim reserving, have impacted the company’s net income which stood at AED10.1m in 2018 compared to AED104.5m in 2017. While this number is very much below Oman Insurance’s normal level of net income, it allows the strengthening of the balance sheet and future earnings.
OIC has increased its solvency ratio to above 170%, its highest solvency of the past four years, which affirms the company’s very strong ability to meet its policyholders’ obligations. The strengthening of solvency is notably the result of an efficient cash collection, resulting in a reduction of more than 50% of the net receivables and an increase in free cash flow of over AED400m, as well as reserves strengthening.
The company said it has continued to implement leaner and cost-effective processes, while remaining focused on providing a superior quality of service to corporate and individual clients. In 2018, 80% of clients declared that they were ‘satisfied’ or ‘very satisfied’ with OIC’s services.
Commenting on the 2018 financial results, Mr Jean-Louis Laurent Josi, CEO of OIC said, “Despite the very competitive environment, we have been able to grow several of our lines of business, reaching the highest level of premiums for a company in the UAE at AED3.7bn, while improving our underwriting results. The drastic reduction of our receivables and the strong increase of our free cash flow, coupled with proactive measures to strengthen our reserves have not only materially increased our solvency but will also allow us to start 2019 in a very strong position. With the goal to become the preferred insurance choice in the region, the fact that Oman Insurance has now 80% of its customers being satisfied or very satisfied with its services is another testimony of the dedication of our teams.” M
AED1 = $0.27