The Financial Services Authority (FSA), the regulator of the insurance sector in Oman, has confirmed that it had not granted approval to any insurance company to increase mandatory motor third-party liability (MTPL) insurance premiums, according to a post on the regulator's X account.
The FSA first issued a statement on 30 July, following reports circulating on social media about insurance companies’ controversial decision to hike the minimum MTP insurance price with effect from 1 August. Some insurers moved to raise MTPL insurance premiums.
Observing that increases had been effected by some insurers, the FSA reiterated on 3 August that it had not approved any premium hikes. The Authority said that it had instituted legal action against the violating companies, adding that it had contacted the errant companies and demanded that they immediately halt any unauthorised price increases and comply with approved tariffs.
Consequently, at least one insurer has declared that they were reversing the recent price increase and they would comply with directives issued by the FSA.
The Authority continues to closely monitor vehicle insurance rates to maintain their stability within safe and appropriate limits.
The FSA affirmed its commitment to free market principles, explaining that insurance pricing is influenced by market supply and demand, company performance, and the profitability of insurance portfolios. The statement highlighted that competition in the insurance sector is strong enough to ensure fair pricing. Any changes to tariffs by insurance companies must be justified and submitted to the FSA in advance.
The FSA urges policyholders and the general public to rely on its official social media channels for accurate and up-to-date information about the insurance sector.
Industry observers urge the relevant authorities to reconsider motor insurance tariffs and establish a fair mechanism that ensures a balance between insurance companies' rights and consumer protection.
Statistics for 2024 on the FSA's website indicate that overall, including comprehensive vehicle insurance and third-party vehicle insurance, the average loss ratio in the motor branch was 80.5%. Some insurers reported a loss ratio of over 100%. One major reason for the higher claims in 2024 is heavy floods from extreme rainfall in April that year.
Motor insurance indicators
|
Branch
|
Premiums OMR m
|
Claims OMR m
|
Loss ratio
|
|
|
2024
|
2023
|
2024
|
2023
|
2024
|
2023
|
|
MTPL
|
62
|
52
|
49
|
31
|
79.0%
|
59.6%
|
|
Comprehensive
|
56
|
49
|
46
|
34
|
82.1%
|
69.4%
|
|
Total motor
|
118
|
101
|
95
|
65
|
80.5%
|
64.4%
|