Omani insurance companies achieve OMR135m premium income in the first quarter

Muscat: Oman's insurance companies have achieved a 3 per cent growth in gross direct premium at OMR134.7 million in the first quarter of 2017, against OMR131 million for the same period of last year.
The Omani insurance market continued recording reasonable growth rates compared to the economic situation despite the financial measures undertaken to mitigate the impact of the falling oil prices which had impact on the projects executed by the government and activities of the private sector, according to a press release from Capital Market Authority (CMA).
The increase in insurance premiums was spurred by positive turnout for individual life insurance products and health insurance and other insurance products, which increased by 15 per cent. Individual life insurance topped all insurance schemes with a 30 per cent growth in the first quarter, continuing a growth process started in 2016. This was due to option given to borrowers for insuring their bank loans.
Health insurance recorded good rates of growth in the first quarter up by 26 per cent compared to the same period of 2016, which is an indication of increased awareness of the benefits of health insurance and the endeavours of individuals and institutions to obtain better standards of health care.
On the other hand, engineering insurance products witnessed a 3 per cent growth in the first quarter of this year, over the previous year. This insurance is related to projects and the risks of contractors.
The unaudited statements of the first quarter shows fall in the transport and liability insurance, motor comprehensive insurance and life group insurance by 33 per cent, 31 per cent, 11 per cent, 9 per cent and 3 per cent, respectively. All such products were affected by the reduction in government expenditure.
Net insurance premiums
The ratios of gross direct insurance premiums for the first quarter of 2017 reflected positively on the net insurance premiums at 5 per cent compared to the same period in 2016.
Transport and engineering insurance recorded the highest ratios increasing by 98 per cent and 58 per cent respectively, compared to the same term in 2016. Group life, properties, motor comprehensive, other and liability recorded a fall of 28 per cent, 21.6 per cent, 11 per cent, 10.6 per cent and 2 per cent, respectively.
Retention
The retention ratio of the sector is about 57 per cent. Retention ratio for motor insurance (comprehensive and third party) was the highest at 87.7 per cent for third party and 84.8 per cent for comprehensive insurance.
Earned premiums during the first quarter of 2017 were 2 per cent compared to the same period in 2016 at OMR68.11 million compared to 2016. Total indemnities decreased to OMR47.43 million in the first quarter of 2017 compared to 2016.
Net commissions in the first quarter of 2017 and 2016 were almost the same at OMR6.69 million. Operating expenses in the first quarter of 2017 increased to OMR14.23 million in 2017 compared to OMR13.74 million in 2016.