Most insurance segments have witnessed varying levels of fall, except health insurance and group life insurance which recorded an increase of 17 per cent and 25 per cent, respectively.
Omani insurance companies have achieved a marginal 0.3 per cent growth in direct gross insurance premium income at OMR358.16 million for the first three quarters of 2017, up from OMR357.23 million for the same period of last year.
Although the total rewritten premiums have generally increased during the period, most insurance segments have witnessed varying levels of fall, except health insurance and group life insurance which recorded an increase of 17 per cent and 25 per cent, respectively, according to a release from the Capital Market Authority (CMA).
The decline in various kinds of insurance is attributed to the austerity measures, which were evident in engineering insurance that witnessed a reduction of 3 per cent compared to the same period in the past year. Similarly, transport, property, motor, individual life and liability segments fell by 19 per cent, 7 per cent, 8 per cent, 21 per cent and 3 per cent, respectively.
The report showed that direct premium of motor insurance constitutes 33 per cent of the gross insurance premiums, while health insurance represents 31 per cent.
Motor insurance segment still maintains the leading position in terms of volume in the insurance market. However, health insurance has achieved a better growth. The audited data in 2016 suggest the average growth of health insurance in the Sultanate in the past five years was 34 per cent and is expected to witness further growth due to the Government’s policy to implement compulsory health insurance for all the employees of the private sector.
The slight increase achieved by the sector in the gross direct written premiums in the first three quarters of 2017 has reflected positively on the gross net direct premiums after reinsurance processes. Gross net direct premiums have increased during the three quarters of 2017 at 1 per cent compared to the same period in the previous year.
Properties and engineering insurance have achieved the highest ratio in premiums at 19 per cent and 18 per cent, respectively, compared to the same period in 2016.
As far as the distribution of the insurance share in the gross direct written premiums is concerned, the motor insurance has recorded the top place in terms of direct written premiums after reinsurance at 50 per cent followed by the health insurance at 30 per cent.
The net share of insurance products of transport, properties, engineering and liability is still low compared to the gross direct premiums.
CMA endeavours to enhance the financial positions of the insurance companies operating in the Sultanate to be able to reach better retention ratios and to expand their abilities to cover greater risks through increasing the minimum capital to OMR10 million and transforming the national companies into public joint stock companies.
Retention ratio for properties, transport and engineering insurances are the lowest compared to other types of insurance at 14 per cent, 21 per cent and 21 per cent, respectively due to reinsurance of greater part of the risk with reinsurance companies.
Retention ratio of motor insurance (comprehensive and third party) is the highest among various insurance segments at 88 per cent for third party insurance and 85 per cent for comprehensive insurance.
The amount of written premiums in the three quarters of 2017 has increased by 10 per cent compared to the same period in 2016. Gross written premiums were OMR196.9 million during the three quarters of 2017 compared to OMR178.4 during the same period in 2016.
Total commissions insurance companies have received from reinsurers for reinsurance have increased to OMR20.92million during the first three quarters of 2017 compared to OMR19.51 million for the same period in 2016.
Operating costs have increased by 5 per cent during the three quarters of 2017 to OMR42.12 million compared to OMR39.94 million during the same period in 2016.
National Life and General Insurance is the largest insurance firm with a share in the direct premiums in the three quarters of 2017 at OMR90 million (25 per cent), followed by Dhofar Insurance at 10 per cent, Oman United Insurance at 9 per cent, Axa Insurance at 8 per cent and Al Madinah Insurance at 6 per cent.
There were 20 insurance companies at the end of the third quarter of 2017 after the merger of Arabian and Falcon Insurance and Muscat Insurance with Muscat Life Insurance. There were 10 national insurance companies and 10 foreign companies in addition to one reinsurance company (Oman Reinsurance). The number of brokers touched 38 and the agents were 112.
The number of employees of the insurance sector was 2,987, which include 1,988 Omani employees (67 per cent) and the number of expatriates was 999 (33 per cent).