Omani insurance sector posts positive overall growth in 2021

Key indices: Gross direct premiums of insurance companies operating in the Sultanate of Oman increased by 3 per cent to RO 479.857 million

Insurance policies issued by insurance companies operating in the Sultanate of Oman climbed 8.6 per cent to 1.782 million policies in 2021, underscoring the growing penetration of insurance coverage in the domestic market.

According to the 2021 Annual Report of the Capital Market Authority (CMA), which also regulates the insurance industry, gross direct premiums garnered by insurers inched up 3 per cent to RO 479.857 million last year, buoyed by a 5.6 per cent increase in gross direct premiums from the healthcare segment totalling RO 163.866 million in 2021, compared to RO 155.193 million in 2020.

Overall, the insurance sector continues to contribute to economic growth, said Shaikh Abdullah bin Salim al Salmi, Executive President — CMA. “The sector’s contribution to the GDP was 1.45 per cent, and the gross direct premiums of insurance companies operating in the Sultanate of Oman increased by 3 per cent to RO 479.857 million coupled with a clear increase in the gross direct premiums of the health insurance class by 5.6 per cent to RO 163.866 million. The financial statements also indicated an increase in the number of insurance policies issued in general, life/family and health insurance by 8.6 per cent'', he stated.

Healthcare insurance, one of the fastest growing segments, is poised to expand exponentially when the Unified Health Insurance Scheme (Dhamani) goes into effect, starting sometime later this year. Planned for implementation in phases, the first phase will cover employees of large private sector organisations, arriving tourists and visitors.

While gross direct premiums grew overall in 2021, they dipped 3.2 per cent in the general insurance segment to RO 412.143 in 2021, down from RO 425.880 million in 2020. For the life insurance segment, gross direct premiums rose 0.7 per cent to RO 258.670 million in 2021 compared to RO 256.951 million in 2020. Takaful companies reported a 6.6 per cent increase in gross direct premiums of life insurance/family Takaful of RO 57.321 million in 2021 compared to RO 53.752 million in 2020.

A breakdown of the distribution of policies across the various insurance segments in 2021 reveals the following: General Insurance — 1.569 million policies; Life/Family insurance — 189,636 policies and Health Insurance — 22,939 policies.

Significantly, the retention ratio of insurance companies in 2021 was about 55.5 per cent, which was marginally lower than the corresponding figure of 56.5 per cent in 2020.

“Audited financial statements for 2021 suggest that the retention ratio for national insurance companies in 2021 was about 55.4 per cent compared to 55.2 per cent in 2020. The retention ratio for foreign insurance companies has decreased from 62.8 per cent in 2020 to 55.9 per cent in 2021. Retention ratio for motor (comprehensive and third party) was the highest compared to other types in national insurance companies at 89.6 per cent and 91.5 per cent consecutively. For foreign companies, the retention ratio for motor (comprehensive and third party) was the highest compared to other types at 95.7 per cent and 95.1 per cent consecutively'', the Authority added.