Monday 20 / October / 2025
Many customers know that insurance companies have a conflict of interest between paying out claims to policy holders and satisfy the shareholders.
It is a battle the insured customers can never win. The insurance companies always find loopholes not to pay half of the time insurers make a claim. While at the same time, while you are insuring yourself, they invest your money to increase their business portfolios.
Most of the time, they lead customers into buying policies they do not need. Take a look at your own insurance policy. It is so complex and very hard to read. There are also fine prints which are hard to understand, too. This makes it even harder to understand what you are covered for.
It is a ploy to deny some claims or pay out as little as possible. Normally, this leads for insured people with a significant financial burden instead of having a peace of mind that they are covered in time of need.
The total deposits of insurance companies in Oman reached OMR670 million in 2024. With that money stashed away in banks on annual basis for the owners, customers still find themselves struggling to make most of their coverage.
It got worse when insurance companies started trading in the Muscat Securities Exchange. Shareholders, demanding bigger dividends every year, are ‘tricking out’ the community and companies to insure more but paying them less and less for their claims.
It is common for companies to insure their properties against fire but when it comes to a claim, they get much less than what they signed for. Five years ago, a logistics company that was insured for three million rials, got back less than half of that after a fire destroyed everything.
This happens when insurance companies use clever claim clauses which do not cover the loss of income and wages of staff even though the policy holders were convinced everything was covered. This example raises the question whether insurance companies really are a financial protector or just a headache when things go wrong.
However, insurance companies will continue to thrive no matter how many complaints are raised. These companies are backed by the legislation. We cannot drive a car, hire anyone or start a business without being covered by an insurance policy.
However, we also know that insurance companies stay clear from coverage that may “drain” money from them and legislators are not willing to intervene. I used the word “drain” for a reason. These insurance companies are not willing to insure private properties or businesses that are close to the wadi channels.
These low lying areas are vulnerable to flooding after heavy rains and they have no adequate drain systems for water to flow out naturally. That is the reason insurance companies stay clear from those areas.
In a recent financial media conference, one of the speakers said in his speech that “insurance companies have the license to mint money.” He also claimed that, their shareholders get the “biggest dividends” from all corporate companies registered in the country. I cannot vouch for the accuracy of his claims but I am convinced that he is not far away from the truth.
