Oman Insurance Report Q4 2012
Business Monitor International, October 2012, Pages: 71
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 And Key Risks:
The Oman Insurance Report considers the prospects for both life and non-life insurers in the country. As of August 2012, it is clear that conditions have been mixed for the major players in both segments. In the non-life segment, it appears that al-Ahlia, the local subsidiary of RSA, has been gaining market share at the expense of the other companies. In the life segment, National Life & General Insurance, the main subsidiary of ONIC Holding has achieved substantial growth in Q112 relative to Q111: this has been thanks to greater sales of health insurance products, both in Oman and the UAE. Other companies have reported declining premiums – in some instances as a result of a deliberate policy to focus on profitability rather than growth. Meanwhile, earnings from investments – for most companies at least – appear to have improved dramatically in comparison with the very difficult period that was Q111.
Overall, though, nothing has happened to change BMI’s view that Oman will likely remain home to an insurance sector that is small, fragmented and highly competitive. Over recent years, premiums in both segments have been growing at low double-digit rates. Retention rates are low (often well below 50%).
Over the last year or so, motor-related claims have been unacceptably high. The insurers remain vulnerable to volatility in the underdeveloped financial markets of Oman and other countries in the region.
Taking the longer-term view, we do not see obvious catalysts for an increase in either non-life penetration or life density. Meanwhile, Oman’s insurance sector continues to compare unfavourably with its peers in other Gulf Cooperation Council (GCC) countries. Twenty-one companies, including 10 local groups, are competing for total premiums that are still less than US$700mn per annum. As is the case in the rest of the region, none of the local companies have the benefits of economies of scale, nor, with the clear exception of al-Ahlia which is an affiliate of global non-life major RSA Insurance, are any owned by major shareholders that have a clear competence in insurance. In most countries in the Middle East and North Africa (MENA), small local groups tend to focus exclusively on non-life lines (particularly the
‘basic’ areas such as motor and home/contents insurance). Oman is unusual in that most of the local groups are composite insurers. Even al-Ahlia offers group life products. The regulatory regime dates back only to 2004. To date, Oman’s insurance sector has not participated in the growth of takaful – a key factor in the expansion of the much larger industries in the UAE and Saudi Arabia: nevertheless, the Capital Markets Authority (CMA) has given an in-principle approval to the establishment of the Sultanate’s first shari’a-compliant insurance company.
A strength is that the market is clearly open to foreign players. Majors that are present include AXA Gulf,
Chartis and, since October last year (through its purchase of Compagnie Libanaise d’Assurance),
Zurich, as well as MetLife ALICO. LIC and New India are serving Indians who live and work in Oman. There are also offshoots of much smaller firms based in the UAE and Lebanon. For the time being, though, the exclusive distribution agreement signed in April 2012 between HSBC Middle East and Zurich does not extend to Oman.
Over the last quarter, BMI has made the following changes:
- The analysis incorporates BMI’s latest forecasts for Oman’s economy, including details in relation to auto sales and trends in the healthcare sector.
-The analysis incorporates comments on developments in H112, most of which were published by the various insurance companies in May and August 2012.
Executive Summary 5
Table: Total Premiums, 2009-2016 5
Key Insights And Key Risks 5
SWOT Analysis 7
Oman Insurance Industry SWOT 7
Oman Political SWOT 8
Oman Economic SWOT 8
Oman Business Environment SWOT 9
Life Sector 10
Middle East Life Sector Overview 10
Table: Middle East And Africa Life Premiums, 2008-2016 (US$mn) 10
Oman Life Sector Update 12
Life Insurance Industry Forecast Scenario 13
Table: Life Premiums, 2009-2016 13
Growth Drivers And Risk Management Projections 14
Population 14
Table: Insurance Key Drivers, Demographics, 2009-2016 14
Non-Life Sector 16
Middle East Non-Life Sector Overview 16
Table: Middle East And Africa Non-Life Premiums, 2008-2016 (US$mn) 16
Oman Non-Life Sector Update 18
Non-Life Insurance Industry Forecast Scenario 19
Table: Non-Life Premiums, 2009-2016 19
Growth Drivers And Risk Management Projections 20
Macroeconomic Outlook 20
Table: Key Infrastructure Projects 22
Table: Oman Economic Activity, 2011-2016 23
Political Stability Outlook 23
Healthcare 26
Table: Number Of Health Centres In Oman By Region 27
Table: Number And Type Of Health Institutions In Oman 27
Healthcare Insurance 28
Epidemiology 28
Table: Oman’s Mortality Indicators, 2006 29
Table: Insurance Key Drivers, Disability-Adjusted Life Years, 2009-2016 30
Islamic Finance 31
Insurance Risk/Reward Ratings 32
Table: Oman’s Insurance Risk/Reward Ratings 32
Table: Middle East And Africa Insurance Risk/Reward Ratings 33
Competitive Landscape 34
Competitive Landscape Analysis 34
Major Players In Oman’s Insurance Sector 35
Table: Breakdown Of Gross Written Premiums By Line, 2008-2010 (OMRmn) 36
Oman Insurance Report Q4 2012
© Business Monitor International Ltd
Page 4
Table: Breakdown Of Net Written Premiums By Line, 2008-2010 (OMRmn) 36
Table: Breakdown Of Apparent Retention Ratios, 2008-2010 36
Company Profiles 37
AIG 37
Allianz 41
AXA 44
Dhofar Insurance Company 47
Life Insurance Corporation of India 49
MetLife ALICO 51
National Life & General Insurance Company 54
Oman United Insurance Company 56
RSA 58
The New India Assurance Company 60
Demographic Outlook 63
Table: Oman’s Population By Age Group, 1990-2020 (‘000) 64
Table: Oman’s Population By Age Group, 1990-2020 (% of total) 65
Table: Oman’s Key Population Ratios, 1990-2020 66
Table: Oman’s Rural And Urban Population, 1990-2020 66
BMI Methodology 67
Insurance Risk/Reward Ratings 68
Table: Insurance Risk/Reward Indicators And Rationale 69
Table: Weighting Of Indicators 70
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