Oman: Launch of mandatory health insurance to bolster market growth
Source: Middle East Insurance Review | Nov 2022
The Omani insurance industry wrote a total GWP of OMR250m ($649m) in the first half of 2022 (1H2021: OMR222m), representing growth of 13%.
This can be partially attributed to the shift towards selling an increasingly large part of the business online along with improved relationships with brokers, said Badri Management Consultancy.
In a report Badri said that insurance companies should expect to see further growth in the upcoming months with the launch of mandatory health insurance.
As compared to the corresponding period of the previous year, 1H2022 saw an increase in the overall loss ratio of the market. The life loss ratio stood at 72% (1H2021: 76%) while the non-life loss ratio was 67% (1H2021: 58%). This drastic increase in the loss ratio for non-life business can be attributed to the unsustainable price competition and significant increases in motor claims as the claim activity restores to pre-pandemic levels, said Badri.
Half of the listed companies in Oman recorded a deficit from their underwriting activities in 1H2022. This is a direct result of the worsening loss ratios. Moreover, the country’s geographic location makes it highly prone to Nat CAT events which have led to increases in reinsurance pricing and limitations on coverage.
With both underwriting and investment income declining over the period, the overall profits before tax have also dropped by 29%. Additionally, there has been a significant deterioration in other comprehensive income, with most of the listed companies recording a negative figure.
The industry has thrived through the obstacles faced during the COVID-19 pandemic. However, there are growing concerns regarding a global recession and the steep trend of inflation rates. Although there has been improvement in certain areas, the future is expected to be challenging, said Badri. M