Oman Insurance Report Q1 2012

Oman’s insurance sector does not compare favourably 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 ALCIO. 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.
Meanwhile, the results for H111 and the first nine months of 2011 that have been published by companies that are listed on the Muscat Securities Market continue to make rather depressing reading. Good growth in premiums written by Oman United Insurance and National Life & General Insurance (a subsidiary of ONIC Holdings) has been offset by a contraction in premiums at Dhofar Insurance, the leading company in the non-life segment with a market share of about 31%. Profitability has been curtailed by low retention ratios – a feature of much of the Middle East and North Africa – surging motor-related claims and unfavourable investment markets. There are no signs of catalysts for growth in non-life penetration or life density.

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Executive Summary 5
Table: Oman’s Total Premiums 2008-2016 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$mn) 10
Oman Life Sector Update 12
Life Insurance Industry Forecast Scenario 13
Table: Oman’s Total Life Premiums 2008-2016 13
Growth Drivers And Risk Management Projections 14
Population 14
Table: Insurance Key Drivers, Demographics 2008-2016 14
Non-Life Sector 16
Middle East Non-Life Sector Overview 16
Table: Middle East And Africa Non-Life Premiums, 2008-2016 (US$mn) 16
Oman Non-Life Sector Update 19
Non-Life Insurance Industry Forecast Scenario 20
Table: Total Non-Life Premiums 2008-2016 20
Growth Drivers And Risk Management Projections 21
Macroeconomic Outlook 21
Table: Oman Economic Activity, 2006-2015 23
Political Stability Outlook 24
Healthcare Sector 26
Table: Number Of Health Centres In Oman, By Region 26
Table: Healthcare Reform Targets 27
Table: Number And Type Of Health Institutions In Oman 28
Healthcare Insurance 29
Epidemiology 29
Table: Oman, Insurance Key Drivers, DALY’s 2008-2016 30
Islamic Finance 31
Insurance Risk/Reward Ratings 33
Table: Middle East And Africa Insurance Risk/Reward Ratings 33
Competitive Landscape 34
Competitive Landscape Analysis 34
Major Players In Oman’s Insurance Sector 34
Table: Breakdown Of Gross Written Premiums By Line, 2008-2010 (OMRmn) 36
Table: Breakdown Of Net Written Premiums By Line, 2008-2010 (OMRmn) 36
Table: Breakdown Of Apparent Retention Ratios, 2008-2010 36
Table: Companies Ranked By Written Premiums, 2008-2009 (OMRmn) 37
Company Profiles 38
Local Company Profiles 38
Al-Ahlia Insurance Company/RSA Oman 38
Dhofar Insurance Company 39
National Life & General Insurance Company 40
Oman United Insurance Company 41
Regional Company Profiles 42
Allianz 42
Arab Insurance Group (ARIG) 44
Aviva 46
AXA 47
Chartis 48
Generali 50
HSBC Insurance 51
MAPFRE 52
MetLife ALICO 54
RSA 56
Zurich Financial Services 58
BMI Methodology 60
Insurance Risk/Reward Ratings 62
Table: Insurance Risk/Reward Indicators And Rationale 63
Table: Weighting Of Indicators 64
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