New Market Research Report: Oman Insurance Report Q2 2015

The Omani insurance sector will post steady growth over the forecast period. Premium growth will remain largely driven by compulsory, basic lines, which in turn will be fuelled by sustained economic growth. Structural issues such as low retention ratios will suppress optimal growth across most sub-sectors.

We remain of the view that solid economic growth will drive sustained year-on-year growth over the forecast period. However, the market will continue to operate at sub-optimal levels due to ingrained structural impediments. These barriers are largely caused by intense price competition in basic lines, such as motor and health. These sub-sectors make up the majority of non-life premiums, which in turn is the dominant of the two segments. Price competition along dominant lines suppresses the development of the market by limiting profitability. As such the sector is characterised by sub-scale operators, who are unable to internally absorb risk and thus are heavy users of outwards reinsurance. The absence of market opportunities besides a general increase in demand for basic lines will continue to decrease the sector's upside potential.

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Over 2015 we do not envisage any substantial market opportunities besides the continued growth of demand for policies, in line with the increase in economic output. The local population continues to display little appetite for non-compulsory lines. Recently, large foreign players in the Omani market such as AXA have announced steps to combat the local population's lack of awareness of the benefits of insurance solutions. These measures include diversifying their channels of distribution by developing partnerships with local banks, known as bancassurance. In addition, AXA has announced plans to increase its physical presence in Oman by opening more kiosks and shops. Although this strategy may have some success in promoting non-compulsory lines, it is unlikely to boost demand significantly among Omanis who can rely on an...

The Oman Insurance Report has been researched at source and features Business Monitor International (BMI)'s independent assessment and forecasts for the insurance sector. It examines industry developments, key growth drivers and risk management projections, including the macroeconomic situation, government policy, regulatory environment and the level of development and potential for growth, broken down by line. Leading insurers are profiled, covering premiums, products and services and competitive positioning.

BMI's Oman Insurance Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Omani insurance industry.

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