MUSCAT: Islamic insurance, which is popularly known as takaful insurance, is gaining popularity in Oman with the players achieving a robust growth of 64 per cent in gross direct premium at OMR39 million last year, which constitutes around 9 per cent of insurance industry’s OMR442 million direct premium income and 5 per cent of total paid claims.
The success of takaful insurance firms, despite an economic slowdown in viewof a slump in oil prices, was mainly due to the ability of takaful players to gain people’s trust, ability to offer affordable and competitive premium and quality service. The Sultanate’s two takaful insurance firms – Al Madina Takaful and Takaful Oman Insurance– are taking efforts to create awareness among the public on the importance of Sharia-compliance insurance schemes.
According to the CMA’s insurance review, the direct gross premiums of the insurance industry grew by 11 per cent to OMR442 million in 2015, from OMR396.2 million in the previous year. Also, the average annual growth in insurance sector in the last five years was 12 per cent, which shows the popularity of both conventional insurance products and Sharia-compliant takaful insurance schemes in the country.
All these achievements are made in spite of an unusual growth in compensation claims, mainly from construction firms and vehicle insurers, in the aftermath of a series of damages caused by unusual rains last year. The total paid claims surged ahead by 25 per cent to touch OMR290.72 million last year, from OMR232.21 million in 2014. As far as the foreign insurance companies are concerned, the gross paid claims were OMR58.77 million, a growth of 11 per cent in 2015 from the previous year’s level. Motor insurance witnessed the highest percentage in claims paid by national and foreign insurers last year at 36 per cent and 53 per cent, respectively.
Motor insurance comprised 37 per cent of the entireinsurance sector’s premiums, while health insurance constituted 23 per centof the gross written premiums.Also, the contribution of insurance sector to the gross domestic product of the Sultanate was 1.4 per cent last year.
The total assets of the Sultanate’s insurance companies have edged up by 2 per cent to OMR777.98 million last year compared to the previous year’s level of OMR761.40 million. The growth was due to an increase in the assets of the foreign insurance companies by 6 per cent in 2015 to reach OMR242.73 million compared to OMR228.43 million in the previous year.
The Sultanate has 36 insurance brokerage firms and 22 insurance companies, which are a mix of locally incorporated firms and foreign firms. National companies represent the largest portion of the insurance market in the Sultanate. The net profit of insurance companies was OMR15.57 million, dropping by 40 per cent from OMR26.13 million.
