Between 2021 and 2022, the Oman insurance sector grew by 12.8%. According to experts the industry is set for further growth in 2024.
In the Sultanate of Oman, the total direct gross insurance premiums of national and foreign insurers grew from OMR479.9m ($1.2bn) to OMR541.3m in 2022 (+12.8%), according to figures from regulator Capital Market Authority’s (CMA) Insurance Market Index 2021-2022, Edition 2023. CMA has not yet released the figures for 2023.
Direct gross insurance premiums of national insurers rose from OMR401.2m to OMR452.4m (+12.8%). Direct gross insurance premiums of foreign insurers increased from OMR78.7m to OMR88.9 (+13%).
Total direct gross premiums for general, health and family takaful also rose from OMR70.8m in 2021 to OMR76.3m in 2022 (+7.7%).
According to Saudi Arabian Insurance Company’s Oman branch general manager Adil Al Hindi, the rise in direct gross premiums can be traced to the regulator’s efforts to ensure stability and growth.
Changes in consumer behaviour, economic conditions and global events also influenced demand for various insurance products, he said.
“For example, the rise of alternative energies and focus on sustainability created a new market for environmentally-friendly insurance products,” he said.
Technological advancements have streamlined processes, enhanced customer experiences and improved risk assessment as well, he said.
“The Omani insurance market forecast is positive and one of the fastest growing,” he said.
Life insurance
Total direct gross insurance premiums for individual and group life policies for national and foreign insurers grew from OMR57.3m in 2021 to OMR67.3m in 2022 (+17.4%). Between 2021 and 2022, life insurance experienced the highest total gross direct premium growth behind property insurance.
Among national insurers, direct gross premiums for individual life policies grew the most between 2021 and 2022, from OMR6.4m to OMR11.1m (+73.9%). Direct gross premiums for individual life policies fell the most among foreign insurers, from OMR9.7m to OMR7.2m (-25.9%). In total, direct gross premiums for individual life insurance increased from OMR16.1m in 2021 to OMR18.3m in 2022 (+13.7%).
National insurers experienced growth in group life insurance, as direct gross premiums rose from OMR29.4m to OMR32.9m (+12%). In the same period, foreign insurers experienced the most growth in direct gross premiums for group life insurance, from OMR11.8m to OMR16.1m (+35.6%). Total direct gross insurance premiums for group life policies in both national and foreign insurers rose from OMR41.2m in 2021 to OMR48.9m in 2022 (+18.8%).
Despite this growth, penetration of life insurance remains low at 0.2%. Penetration of general insurance is 1.7%, according to Dhofar Insurance CEO Sunil Kohli.
“The insurance industry runs educational and information sharing campaigns to generate interest and educate people on the importance of investing in life insurance. A lot of work needs to be done to develop innovative products which will appeal to the population,” he said.
According to MetLife Gulf Oman country manager Raed Dawood, there is noticeable potential in the life insurance market, “especially among the younger demographic which makes up around 40% of the local population.
“Despite this, there has not been significant advancements in non-credit linked product offerings or distribution models,” he said.
He said that the growing needs and awareness among the young local population indicate an emerging appetite for life insurance and savings products.
“Comprehensive insurance value propositions that meet the local market’s growing needs could be introduced,” he said.
National life insurers gained market share for individual life premiums (+20.9%). Foreign insurers gained market share in group life premiums (+4.1%). In total, national insurers gained market share in life insurance (+3.1%).
Property insurance
Total direct gross insurance premiums from property business was among the highest between 2021 and 2022, having grown from OMR76.3m to OMR90m (+18%).
Over the year, direct gross insurance premiums for national insurers rose from OMR60.1m to OMR70.6m (+17.4%). Direct gross insurance premiums for foreign insurers increased from OMR16.2m to OMR19.4m (+20%).
Foreign insurers gained market share (+0.4%).
Health insurance
Direct gross insurance premiums for health in national insurers increased from OMR149.9m in 2021 to OMR173.8m in 2022 (+16%). In the same period, direct gross premiums for health insurance in foreign insurers also rose from OMR14m to OMR17.7m (+26.2%).
Total direct gross premiums for both national and foreign insurers grew from OMR163.9m to OMR191.5m between 2021 and 2022 (+16.9%).
The health business, especially the medical insurance segment, is forecast to grow, Mr Dawood said.
Driving factors, he said, included the “anticipated introduction of the mandatory health scheme and overall digital transformation”.
National insurance companies gained market share (+0.7%).
Motor insurance
Total direct gross premiums for motor insurance for both comprehensive and third-party policies in national and foreign insurers grew from OMR102.6m in 2021 to OMR106.5m in 2022 (+3.8%).
Comprehensive motor direct gross insurance premiums in national insurers rose from OMR44.1m in 2021 to OMR45.2m in 2022 (+2.3%). In the same period, direct gross premiums for comprehensive motor insurance in foreign insurers dropped from OMR9.3m to OMR8.5m (-9%). Total direct gross premiums for comprehensive motor insurance in national and foreign insurers increased from OMR53.4m in 2021 to OMR53.6m in 2022 (+0.4%).
Third-party motor direct gross insurance premiums for national insurers increased from OMR45.8m to OMR48.4m between 2021 and 2022 (+5.8%). Over the year, foreign insurers also experienced growth in third-party motor insurance, as direct gross premiums rose from OMR3.4m to OMR4.5m (+32.1%). Total direct gross premiums for third-party motor insurance grew from OMR49.2m in 2021 to 52.9m in 2022 (+7.6%) for both national and foreign insurers.
In total, national insurer gross premium growth for comprehensive and third-party motor insurance grew from OMR89.9m in 2021 to OMR93.6m in 2022 (+4.1%). In the same period, foreign insurer gross premiums for comprehensive and third-party motor insurance rose from OMR12.7m to OMR13m (+2%).
National insurers gained market share in comprehensive motor insurance (+1.7%). Foreign insurance companies gained market share in third-party policies (+1.6%). In total, national insurers gained market share (+0.3%).
Marine, engineering and liability insurance
National insurance companies gained market share (+0.8%) in marine insurance in 2022. Marine insurance total direct gross premiums in both national and foreign insurers rose from OMR12.8m in 2021 to OMR14.3m in 2022 (+11.1%).
In the same period, direct gross premiums in national insurers increased from OMR10.9m to OMR12.3m (+12.2%). Direct gross premiums in foreign insurers grew from OMR1.9m to OMR2m (+4.6%).Foreign insurers gained market share (+1.1%) in engineering insurance. Total engineering direct gross premiums in national and foreign insurers increased from OMR24.3mm in 2021 to OMR25.5m (+4.8%) in 2022. Direct gross premiums for national insurers grew from OMR19.9m to OMR20.6m (+3.7%) and OMR4.4m to OMR4.9m (+9.7%) for foreign insurance companies.
Foreign insurance companies gained market share (+4.7%) in liability insurance. Total liability direct gross insurance premiums in national and foreign insurers rose from OMR13.1m in 2021 to OMR13.9m (+5.7%) in 2022. Premiums for national insurers increased (+0.4%). Premiums for foreign insurers also grew from OMR2.3m to OMR3m (+30.1%).
Takaful
Gross direct premiums for general takaful dropped from OMR44.2m in 2021 to OMR43.8m in 2022 (-0.8%). In the same period, premiums for health and family takaful increased from OMR13.1m to OMR14m (+6.1%) and OMR13.5m to OMR18.5m (+37.4%), respectively.
M&A
“M&A activity, strategic partnerships and market entries or exits have influenced Oman’s market structure,” Mr Al Hindi said.
Major consolidations include the merger of NLIGC with Al Ahlia, Vision with OQIC and AXA with GIG. Fairfax also entered the market by acquiring a major stake in GIG.
“On a broker level, consolidations may also happen in the coming months,” he said. At the moment, he said, the number of brokers may not be sustainable.
The future
According to CMA, as part of the Oman Vision 2040, it aims to achieve an annual growth of 10% in the insurance indices. CMA also aims to raise awareness of the insurance sector “to reach 25% of the total population by 2025”, the annual report said.
According to Mr Dawood, there is an opportunity to tap into the potential of the Omani market particularly in the life insurance and savings segment.
The 12-month forecast for the general insurance business is optimistic, Mr Kohli said.
“With new welfare schemes and infrastructure projects being launched by the government, the insurance industry is looking forward to growth in the coming 12 months,” he said.
According to Mr Al Hindi, growth can also be traced to improved fiscal indicators and lower public debt risk.
“Due to this, Oman is able to work on major infrastructure projects such as Oman rail and sustainable cities,” he said.
“However, the insurance industry also has to build structures which ensure robust fundamentals,” Mr Kohli said. M