Oman insurance market has ample room for long-term growth: CBO
Oman’s insurance market has ample space to grow in coming years as the sultanate still has much lower insurance penetration compared to global average, according to the Central Bank of Oman (CBO).
In its financial stability report for 2018 the CBO said, ‘The metrics for the insurance sector show that Oman is relatively under-insured and as such there is ample space for the growth of the sector. Insurance penetration – the ratio of insurance premiums to the GDP – was about 1.6 per cent, which is comparable to that of GCC countries but remains much lower than the global average of 6.5 per cent.”
Oman’s insurance density, which is measured as insurance premium per head, is just RO100, which is significantly lower than the GCC average of RO141 and less than half of the global average of RO252 per head, the CBO report said.
‘These indicators are suggestive of the potential available to cater to the under-served and unserved market segments. The upside potential suggests that despite some slowdown in economic activity, the long-term growth prospects for the insurance sector remain optimistic as the growth can pick up with an increase in product awareness’, the CBO said.
The CBO noted that the launch of agriculture insurance was a significant development in the sector in 2018.
As per data published in the CBO report, total premiums collected by insurance companies registered a small increase during 2017 to reach RO455mn.
General (non-life) insurance segment continued to be the dominant segment in Oman’s insurance sector with a share of around 86 per cent in gross premiums. Within general insurance segment, motor insurance leads the premium collection with a share of about 34 per cent, followed by medical insurance with a 30 per cent share.