Exploring new vistas

Medical insurance posted a whopping 38 per cent growth over 2012, marking the highest rise among different insurance segments, according to the latest statistics released by the Capital Market Authority

The Sultanate’s insurance sector has shown a steady growth in terms of both direct premium revenues and retention rates within the country last year, thanks to the robust economic growth achieved by the country. The better performance of the economy, supported by ongoing investment in major infrastructure projects, has immensely benefited insurance firms. The country’s gross direct insurance premiums have grown 10.4 per cent at RO364mn in 2013, from RO329.6mn for the previous year, while net premiums (which are calculated after deducting reinsurance charges) showed a robust 13 per cent growth at RO195.47mn.

Among various segments, medical insurance posted a whopping 38 per cent growth over the previous year, marking the highest rise among different insurance segments, according to the latest statistics released by the Capital Market Authority. Majority of the growth in medical insurance was from employee group policies of the corporate sector. Employee medical insurance is a cashless scheme wherein the insurance company, which ties up with hospitals, gets volume business and the employees get access to cashless healthcare facilities. Gross premium from medical insurance touched RO63mn for 2013, while property insurance rose 21 per cent reaching RO51.8mn. However, life insurance posted 16 per cent fall to RO33.6 million from RO40.5mn in 2012. Also, vehicle insurance has the biggest share in gross direct premiums with 41 per cent of the total premiums, followed by medical insurance at 17 per cent and properties insurance at 14 per cent. The retention rates in the direct premiums rose 41 per cent reaching RO195.5mn compared to 52 per cent or RO173mn in the previous year, calculated after the insurance companies carried out reinsurance operations with reinsurance companies in the local and foreign markets.

National companies have the biggest share in insurance market in the Sultanate. Among the top five, four national firms have together 53 per cent of the total direct insurance premiums. The retention rates in property, transport and engineering insurance are the lowest compared to other insurances with 7 per cent, 22 per cent and 23 per cent, respectively, due to reinsuring the main portion of these risks with reinsurance companies. By contrast, retention rates in vehicle insurance were the highest at 87 per cent. However, insurance players face various challenges due to under-cutting as competition has increased in view of a large number of players and over-capacity. The recent entry of two Islamic insurance firms (takaful) – Al Madina Takaful and Takaful Oman – is expected to further increase competition. Although the first one is an existing firm with established business, the second company is yet to start operations since it is a new company.

Insurers in Oman are planning to make better use of technology and raise the industry’s profile in an effort to boost the size of the market and improve profitability in what is a crowded sector. The Oman Insurance Association in a recent meeting said it was developing a plan for the industry for the coming two years. Among the initiatives to be pursued in the medium term are better professional training for the workforce, the development of a regulatory framework for credit control, and increasing insurance awareness. The association also said it plans to work more closely with the sector’s regulator, the Capital Market Authority (CMA), for introducing reforms.

Another major initiative on the technology front is the introduction of e-insurance – a system that was launched last year for providing a database shared by the Royal Oman Police (ROP) and insurance providers. Insurers will have access to the traffic history for all vehicle owners, allowing policy writers to set appropriate premiums for drivers. Since insurance firms in Oman are relatively small compared to its counterparts in other parts of the world, CMA has been encouraging mergers as well as strengthening capital base. Although CMA has been asking insurance firms to go for merger, the response was not encouraging. There was only one merger between Royal Sun Alliance and Al Ahlia Insurance in recent years. Another recent proposal was scrapped after boards of both companies signed a memorandum of understanding for studying a merger proposal.

As part of a move to strengthen capital base, insurance companies in the country will have to raise their minimum capital to RO10mn and list shares on the Muscat Securities Market (MSM) once the insurance law is amended by the authorities. The proposal is aimed at strengthening capital base of insurance firms for making these institutions big enough to underwrite more risks and retain the premium within the country.

Customer Centric

New India Assurance, which is celebrating 40 years in Oman, is one of the largest and financially strong non-life global insurance companies and is a pioneer among Indian insurance companies

The New India Assurance which is a multinational since 1921 has been enjoying a solid capital-base, excellent liquidity and highest solvency margin since its inception.

The insurance company has been one of the leading participants in promoting a strong insurance base in the Sultanate. New India-Oman’s growth, since its entry in 1974, has been steady. For the past several years the company has enjoyed enormous support from its valued clients. The reputation of being one of the most customer friendly insurance company in Oman has put ‘New India’ with an additional responsibility to serve the Oman market in their insurance needs with ever improving customer satisfaction. New India Assurance was the first foreign insurance company from India to enter the Sultanate in 1974 and has offices in almost all Gulf Cooperation Council countries.

This 95 year old company is one of the largest and financially strong non-life global insurance companies and is a pioneer among Indian insurance companies on several counts – insuring the first domestic airline to satellite insurance. ‘New India’ has been rated “A” (Excellent) by A.M. Best Co., USA for the past ten consecutive years in succession, based on superior capital position, excellent liquidity, strong operating performance and highest solvency margin. New India has become the first insurance company in India to secure the highest financial strength rating ‘AAA’ from Credit Rating Information Services of India Ltd (CRISIL).

New India Assurance Company Ltd. Sultanate of Oman has retained the No.1 position as ‘The Best Brand in Insurance’ (No. 1 position in insurance category), in the Survey of ‘Oman’s Greatest Brands since 2010. Another glorious achievement by ‘New India Oman’ is that it is ranked at No. 9 in the overall category of ‘Oman’s 130 Greatest Brands’

The New India Assurance Company Limited, Oman operations has recently received yet another accolade by winning the Best Non-Life Insurer Oman – 2013 award from World Finance, a UK based agency for rating finance and insurance sector establishments. In the business front, the company achieved significant growth in year 2013 – 14. For the year 2013 – 14, the company achieved a global premium of RO 936 million. Thus, New India Assurance retained the premier position among the general insurance companies in Asia and Africa.

Amongst the 10 foreign general insurance companies operating in the Oman market, New India is the distinct leader with 34 per cent market share which clearly shows the credibility, stability and service edge of New India Assurance’s operation in the Sultanate of Oman. The New India Assurance Oman had a gross premium of RO 30.50 million in 2013.

New India Assurance, Oman is in the forefront of offering and devising unique insurance products and services. The wide range of insurance covers caters to project insurance, fire (property) insurance, personal accident, household insurance, workmen compensation, motor, marine, professional indemnity, public liability policy, product liability, travel insurance and health insurance. M/s. Abdul Aziz & Brothers LLC is the business partner of The New India Assurance in the Sultanate. Majid Abdul Rahim Jaffer, is the Chairman of Abdul Aziz & Brothers LLC and Majid Group Companies.

National Life & General Insurance Company’s product offerings in life and medical are still the best available in the market, says S Venkatachalam, Chief Executive Officer in an interview

How has National Life & General’s performance been in the year


National Life & General Insurance Company had a great year in terms of business performance. The company’s year on year growth (YOY) for year-to-date (ytd) 2014 has been 22 per cent. Significantly, the growth has yielded consistent profits. The company’s market share in life and health insurance industry in Oman continues to grow and we command a near leadership status in group medical line of business.

Which are the main lines of business for National Life & General Insurance?

National Life & General Insurance has always shown consistency in delivering a high-class standard in both its product offer and service quality. We offer a broad array of life and general insurance products to individuals, associations and businesses of all sizes. Products have been intensively researched to provide customers with life and non-life assurance policies that cater to their needs. Our main line of business is group medical and group life.

What kind of insurance (auto, health, life etc.) has been the biggest contributor to your business and why?

Potential segments in the Oman market are definitely in the Life, Medical and motor sector. There also exists potential in various retail offerings like home and content insurance, and travel insurance. I would like to add that we are the undisputed market leaders in life and medical Insurance. Our product offerings in life and medical are still the best available in the market. We have come a long way in designing products suiting the local market, customising it to fit every stratum of society. Over the years, we have strengthened across five fundamental pillars of business- Product design, revenue models, operational efficiencies, compliance and best practices and change management.

What are the company’s future plans in Oman and in the GCC region?

We want the people of Oman to have access to National Life and General Insurance Company office within a short distance and get the best insurance services at competitive rates. Moving forward, the company is planning to expand multiple distribution channels to reach out to every part of Sultanate. We are opening more number of branches and other touch points as part of our new distribution expansion initiative. We are growing rapidly in UAE and we have received the approval to open our branch in Abu Dhabi soon. Our UAE Business is growing year on year.

What are the challenges faced by insurance companies in Oman?

Insurance sector in Oman is a complex one, with a multitude of different firms, many targeting a particular segment of the market, jostling for market share while navigating a tangle of different rules and regulations. The Omani insurance market is growing. Among the major challenges faced by Insurance companies in Oman are lack of insurance education and awareness among Oman population regarding benefits of life and health insurance and shortage of skilled local manpower in insurance field.

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