Rising costs, increased climate-related claims, and aggressive pricing strategies are putting pressure on margins across the industry, says Badri Management Consultancy, an international company specialising in actuarial and management consulting services.
In its report, titled “Omani Listed Insurance Industry Performance Analysis – Year 2024”, released last week, Badri noted that the combined after-tax profit of the eight listed companies analysed dropped by 65% to OMR7.3m ($19m) in 2024 from OMR20.9m in 2023.
Significant losses posted by LIVA, Oman’s biggest insurer by revenue, played a major role in this decline. LIVA ‘s financial results dropped from a net profit of OMR6.4m in 2023 to a net loss of -5.0m in 2024. The results were mainly due to challenging weather conditions in the UAE. If LIVA’s results were excluded from the analysis, the overall profitability shows a 15% decrease in 2024 compared to the previous year. LIVA was the only insurer among the eight to post losses in 2024.
It’s also worth noting that the net profit of takaful companies is calculated by combining both policyholder and shareholder accounts for comparison purposes.
Topline
Overall net profits fell despite an increase in the combined topline. Conventional insurers recorded a modest 8% growth in insurance revenue, increasing to OMR561m in 2024 from OMR519m in 2023. Meanwhile, takaful companies achieved a stronger performance, with a 19% rise in gross contributions to OMR92m in 2024 from OMR77m in 2023 to OMR92m in 2024. This trend reflects both resilience and adaptation in the face of market challenges, with varying growth trajectories across conventional and takaful segments.
Meanwhile, the sharp decline in insurance service results among conventional insurers points to operational inefficiencies that warrant attention. At the same time, investment income declined by 17%, which highlights growing pressure on profitability and the need for stronger asset management strategies.
“To remain competitive, companies must improve risk management, adjust pricing models, control expenses, and strengthen their financial position,” said Badri. “Moving forward, insurers that adapt quickly, use better data, and plan for future risks will be best positioned to succeed in a more demanding market.”
The data on which the report is based was extracted from the financial statements of listed insurance companies which were available as of the date of compilation of the report. All six conventional insurers publish their data in accordance with IFRS 17 standards whereas the two takaful companies still follow IFRS 4.
To download the report, please click on this link.