Insurance
From The Report: Oman 2013
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With participants showing strong growth in a highly competitive market, the sultanate’s insurance sector is experiencing a period of both vertical and horizontal expansion. Stronger regulatory requirements on solvency and governance are also on the way, while a major new element, Islamic insurance – takaful – is also being added to the mix. While the market penetration rate remains low compared to more established markets elsewhere in the region and the world, the sector has seen consistent growth in recent years, with gross premiums up 12.2% between 2010 and 2011. Indeed, the sector is now entering a period of change and future consolidation is expected, with plenty of opportunities for international investors to become involved. Rising per capita income, GDP growth on the back of high energy prices and a changing social profile are all contributing to new approaches and attitudes towards insurance, which are likely to bring about significant sector growth in the years ahead.

Articles from this Chapter

Overview

Reorganising and prioritising: Reforms help the industry grow and mature
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With participants showing strong growth in a highly competitive market, the sultanate’s insurance sector is now experiencing a period of both vertical and horizontal expansion. Stronger regulatory requirements on solvency and governance are also on the way, while a major new element, Islamic insurance – takaful – is also being added to the mix. The sector is thus in a period of change and future consolidation is expected, with plenty of opportunities for international investors to become involved. Regulators…

Analysis

Safe ride: New regulations help make the sector and drivers more secure
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The motor segment dominates general insurance in the Omani market. Alpen Capital’s 2011 “GCC Insurance Report” showed 62% of all insurance business activity in the sultanate going to motor coverage. Faced with the dominance of the motor segment in the sector, the industry regulator, the Capital Markets Authority (CMA), has recently moved to increase the amount of oversight it lends to this corner of the market. Critical Condition As in many other countries, motor insurance is a line of business…

Analysis

Enter takaful: Islamic products can expand both the market and the consumer base
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As part of Oman’s entrance into the world of Islamic finance, Islamic insurance, or takaful, is also on course to make its debut in 2012-13. This may have important effects on the wider insurance market, while also increasing choice for Omani consumers. Groundwork In May 2011 Sultan Qaboos bin Said al Said issued a royal decree that paved the way for the introduction of Islamic finance. Several facets of the decree have been implemented in a phased manner, with the first wave consisting…

Analysis

Pensions and provisions: Demographic and wage shifts create new avenues of opportunity
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Omanis enjoy access to an extremely well organised and comprehensive pensions system, which covers both public and private sector employees. Plans are now under way to extend coverage to include expatriates as well, with the possibility for private pension schemes to fill some of the gaps in the state’s provision. This is likely to benefit the sultanate’s insurers while also driving future growth in capital markets, where there is a desire for more big institutional investors. Demography The…

Analysis

Sailing ahead: An expanding maritime sector means more business for insurers
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A major part of the sultanate’s ongoing economic development efforts hinges on a series of key port projects that are set to see significant new investment in the coming years. These initiatives imply new potential for several of Oman’s robust insurance lines of business – from construction and engineering, to marine and hull. Meanwhile, recent improvements in offshore security are also noteworthy as they help secure the business of insurers and reinsurers in the maritime segment. Well Positioned Oman…