The adoption of online channels to sell insurance products and the enhancement of relationships with brokers have helped to boost insurance business in Oman said Badri Management Consultancy.
In 2022, the listed insurance sector in Oman recorded a gross written premium of OMR523m ($1,358m), a 30% increase from OMR404m reported for 2021.
With the introduction of mandatory health insurance, insurance companies can anticipate further expansion in the near future, said Badri in a report titled Omani Listed Insurance Companies— Performance Analysis 2022. The analysis was carried out on the financial results of 10 listed insurers in the Sultanate.
In comparison to the same period of the previous year, the overall loss ratio of the market witnessed an increase in 2022. The loss ratio for life remained unchanged at 79% while that of non-life rose to 65% from 62% in 2021. The rise in the non-life loss ratio can be attributed to unsustainable price competition and a significant increase in motor claims.
In Oman, more than half of the listed insurance companies reported a weaker underwriting performance, which is a consequence of deteriorating loss ratios. Additionally, the country’s geographical position renders it highly vulnerable to natural catastrophic events, resulting in a rise in reinsurance pricing and coverage limitations.
During the period, there was a decrease in underwriting income, leading to a 2% decline in overall profits before tax. In addition to this, there has been a marked decline in the other comprehensive income (OCI), with most listed companies reporting a negative OCI.
There has also been a rise in consolidation within the industry, and with the implementation of the risk-based capital framework, further activity in this area may be anticipated.
Despite the challenges posed in several ways, the insurance industry has managed to prosper. Nevertheless, there are apprehensions about the possibility of a worldwide recession and a sharp increase in inflation rates. While there have been some improvements in certain areas, the future is expected to be demanding said Badri. M