The devastation caused by thunderstorms to public infrastructure, commercial establishments and homes in several parts of Oman in July has revived calls for the urgent institution of a Nat CAT fund and insurance pool, among other measures.
Severe flooding swept over much of the northern half of Oman on 15-16 July, reported the Oman Daily Observer.
Speaking to the Observer, a senior official of the Oman Chamber of Commerce and Industry (OCCI) warned that the absence of a Nat CAT insurance pool to mitigate public and private sector losses from natural disasters – a longstanding plea of the insurance industry – would continue to impose a heavy cost on the national economy.
OCCI finance and insurance committee chairman Murtadha bin Mohammed Jawad Ibrahim al Jamalani said that such a disaster fund combined with a reinsurance pool has been advocated for nearly 15 years. In June 2007, cyclone Gonu, considered the nation’s worst natural disaster, caused a great deal of damage along the coast of Oman.
“These recurring insured and uninsured losses resulting from natural disasters are hurting the government and the wider economy,” said Mr al Jamalani.
“Proposals have been made, meetings convened and deliberations held but a concrete decision by the authorities concerned is still being awaited.”
Most state-funded public infrastructure is at present uninsured. “It will be prudent to insure all such infrastructure through the creation of a national fund. This change in financial policy is long overdue,” he said.
Among the proposals raised by insurance companies through the chamber is the rollout of a nationwide zoning mapping initiative that calls for an insurance premium to be levied on properties and investments developed in areas prone to natural disasters.
In June 2020, the Capital Market Authority said it was considering the establishment of a disaster insurance fund to compensate for losses that are not covered by currently available insurance policies. The proposed disaster insurance fund would cover risks including epidemics like COVID-19 as well as provide compensation to those who suffer losses caused by adverse weather events. M