Oman: Pricing practices improve among listed insurers
Source: Middle East Insurance Review | Aug 2022
Listed insurance companies in Oman saw an increase in weighted average loss ratios to 68% in 1Q2022 from 65% in 1Q2021, as the increase in claims outpaced the increase in premium income, despite improved pricing practices among the insurers, according to Badri Management Consultancy (Badri).
As COVID-related restrictions continue to be removed and insurance companies regain their footing, Badri has observed improvement in underwriting practices in 1Q2022. This is in contrast to the previous years during which aggressive price competition had driven down motor premiums.
The listed insurers demonstrated an improvement in underwriting practices along with higher returns on investment, said Badri in its report, titled ‘Omani Listed Insurance Companies Performance Analysis for the First Quarter of 2022’.
The overall underwriting income earned by the listed insurers amounted to OMR3.4m ($8.8m) in 1Q2022 (1Q2021: OMR3.3m) while the investment income earned during 1Q2022 amounted to OMR6.6m (1Q2021: OMR5.7m).
For all the listed insurers operating in Oman, it was observed that investment income is a major contributor to profits. Some companies that posted underwriting losses were able to offset such losses with investment income to eventually report net profits.
The increase in both underwriting and investment income has resulted in an increase of 10% in the overall industry profit before tax to OMR9.9m. Additionally, there has been a significant improvement in other comprehensive income.
The combined GWP reached OMR146m ($379m) in 1Q2022 which is a 10% increase from OMR133m in 1Q2021.
As digitalisation and customer-centricity become a focus along with the introduction of the mandatory health insurance scheme, insurers should expect to see further growth in the upcoming months, said Badri. M