Oman Insurance Report Q3 2015 - New Market Report

Oman's insurance sector will r ecord strong single- digit growth over 2015 and across the forecast period, reflecting its status as a significant market opportunity, albeit from a low base. Strong macroeconomic performance as well as a growing expatriate community will help fuel demand, particularly for the ever dominant basic compulsory lines such as motor and health. Structural issues such as a fragmented market and low retention ratios will, however, continue to undermine the sector's upside potential.

Over 2015, we anticipate that Oman's insurance sector as a whole will achieve steady single-digit growth, though significantly below the highs of recent years. This will be largely driven by the non-life segment, and in particular basic lines such as motor, which accounts for the majority of total premiums. Looking ahead, 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.

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One of the main barriers to optimal growth is the fact that the sector's market landscape is dominated by sub-scale operators. They lack scale and are forced to forgo a large portion of gross premiums in outward reinsurance. We do not anticipate any significant re-structuring of the overall sector in terms of each insurer's market share, at least over the short-to-medium term. As a result, retention ratios (net premiums as a percentage of gross premiums) are, and will remain, low for the foreseeable future. Given that many insurers across the sector will continue to rely heavily on outwards reinsurance, net premiums will grow broadly in line with gross premiums in both the life and the non-life segments. Therefore, the driving force behind net premiums will be expansion in the overall economy.

Another barrier to higher growth rates has been the fact that claims have historically been relatively high as a portion of total gross...

The Oman Insurance Report has been researched at source and features BMI Research'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.

Key Benefits

* Benchmark BMI's independent insurance industry forecasts for Oman to test other views - a key input for successful budgeting and strategic business planning in Oman's insurance market.

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