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Oman Insurance Report Q4 2010
Business Monitor International, Oct 2010, Pages: 70
The Oman Insurance Report provides industry professionals and strategists, corporate analysts, insurance associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Oman's insurance industry.
Key Insights On Oman’s Insurance Sector
Oman’s insurance sector is small, but rapidly growing in both global and regional terms, with an embryonic life segment. In our last quarterly report we noted that, in terms of gross written premiums, Dhofar Insurance had by far the largest market share, followed by Oman United Insurance and Al Ahlia Insurance. Together, these companies accounted for 70-75% of non-life premiums written in 2008. Oman National Life was, and remains, significant in the life sector.
Since then, there has been one major change in the competitive landscape as ONIC Holdings sold its controlling interest in Al Ahlia to RSA Oman – the local subsidiary of the UK-based property/casualty company with global reach in early 2010. In return, ONIC received a 20% stake in RSA Oman. This appears to be a good deal for all concerned. ONIC and the minority shareholders in RSA Oman have investments in what is, by net written premiums, now the largest player in the insurance sector, while RSA has dramatically increased its market share. By operating under the aegis of RSA Oman, Al Ahlia now has access to the considerable resources of the global group.
In this report, we also provide a breakdown of the insurance sector by line – from the point of view of the regulator or trade association. In 2008, comprehensive motor insurance (predominantly compulsory motor third party liability insurance, CMTPL) was the largest line in Oman – accounting for about half of gross written premiums. Other major lines included property and transport insurance.
At the time of writing, in September 2010, we have been able to ensure that the report includes actual data for 2009. We have also generally been able to use data that has been published during 2010 to adjust our forecasts for the year as a whole and have extended forecasts to 2014. Last year, total premiums in Oman came to OMR238mn. This included non-life premiums of OMR198mn and life premiums of OMR40mn.
In 2014, the corresponding figures should be OMR348mn, OMR304mn and OMR43mn. In terms of the key drivers that underpin our forecasts, we are looking for non-life penetration to rise from 0.84% in 2009 to 0.93% in 2014. We are looking for life density to remain constant at US$37 per capita. BMI’s insurance Industry Business Environment Rating (IBER) for Oman is 48.6.
Issues To Watch
Further Corporate Realignment
In the context of the Middle East, ONIC Holdings is unusual for having taken the view that it is better to own 20% of an enlarged RSA Oman than all of Al-Ahlia. Time will tell if other participants in Oman’s insurance sector (and, for that matter, its counterparts elsewhere in the Middle East) take a similar view. Aside from Saudi Arabia’s Tawuniya, there are not really any indigenous insurance companies in the Arab countries of the Middle East that would rate as large organisations elsewhere.
Business Conducted For Expatriates
For a small country that does not clearly aspire to evolve as the financial services centre of the Middle East, Oman’s insurance market is remarkably open to foreign participation. Foreign groups that are active include the local subsidiaries of New India, Life Insurance Company (of India) and Bimeh Iran. We presume that these companies are mainly serving expatriates from Iran and India. Their businesses should, therefore, be leveraged to an overall expansion of Oman’s economy.
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