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2.2% Decrease in Insurance Premiums in First Quarter



Muscat, May 12 (ONA) —- Unaudited financial statements for the first quarter show slight decrease in direct insurance premiums at 2.2%. Gross direct premiums were RO 149.2 million during the first quarter of 2020 decreasing compared to the past year which was RO 152 million. 


       Insurance companies’ performance report during the first quarter of 2020 shows that total operational results of the sector witnessed an increase in net claims paid by insurance companies by 11% compared to the same period in the past year to RO 48.8 million  from RO 43.8 million in the first quarter of 2019. Earned premiums recorded increase to RO 76 million from RO 75 million in the same period in the past year. 


      Net commissions were RO 909,000.9  increasing by more than 100%. Administrative and general expenses increased to 6% compared to the past year.


       The performance of the insurance products in the first three months of the current year was mixed. Transport insurance products increased by 35%. Properties insurance increased by 20%. Such insurance covers loss and damage risks and differ from marine, aviation, transport and motor insurance. Liability insurance  witnessed an increase in gross premiums by 9%. This insurance provides coverage for legal liability for claims by third parties for compensation and damage for loss incurred in properties accidents or bodily injuries or death related to a third party.



        The first quarter of the current year witnessed a considerable  decrease in insurance products. The key is life insurance by 10% as well as motor insurance which decreased by the same percentage compared to the same term in the previous year. Other insurance products decreased by 21%. Engineering insurance decreased by 4.4% and health insurance decreased by 1%.


      With regard to distribution of direct premiums of insurance products, it was noted that health insurance tops the insurance products by 41% of the market share followed by motor insurance at 22% then properties by 12% of the total insurance portfolio in the first quarter of the current year. The remaining share was distributed among the other insurance products at 5% for engineering, 4% for transport, 2% for liability and 4% for other products. The share of life insurance was 10% of the total insurance portfolio.



      The unaudited statements of the insurance companies in the first quarter show a decrease in the net gross direct premiums which are the premiums retained by insurance companies after deduction of reinsurance by 4% compared to the same period in the previous year due to a decrease in direct premiums. 


    The data shows that the decrease in the gross insurance premiums has affected the decrease in motor insurance premium specifically the comprehensive insurance which decreased by 20% followed by liability at 13% then life (group) insurance by 9%, properties by 8%. 


     Health insurance products maintained slight growth levels at 1% for net insurance premiums and 8% for transport which enabled insurers to increase retention ratios after reinsurance of the risks of such products.



      It is noteworthy that the Omani insurance market closed the year 2019 with positive growth indicators to reach RO 486.5 million compared to RO 463.5 at the end of 2018. 


    The sector’s indicators show that the average growth of insurance premiums during the past five years was 4%. Gross direct premiums increased by 5% to RO 425.8 million in 2019 compared by RO 403.9 million in 2018.  The share of general insurance was 87.5% of the total insurance portfolio with an increase in life insurance by 2% to RO 60.7 million in 2019 compared to RO 59.6 million in 2018 where the share of the life insurance was 12.5% of the total insurance portfolio.

—- Ends/AH