By Shamsa al Riyamia -
MUSCAT — The number of insurance companies operating in Sultanate are on the rise and the volume of premiums collected by the companies is also on the rise, which reflected negatively on the performance and operational cost.
Sayyid Nasser Salim al Busaidy, head of an Omani insurance company, called upon the capital market to urge insurance companies to integrate and develop regulations for licensing new companies so that the need of the emerging market is taken care of.
Al Busaidy hoped that opportunity is to be given to national companies to obtain a licence to practise Takaful insurance in the light of experience, and if necessary to allow foreign companies to enter this segment later, pointing out that the size of the domestic insurance market is relatively small compared to that in neighbouring countries.
Speaking to Oman, Arabic sister daily of the Observer, al Busaidy said that there are many challenges facing the sector including losses in vehicles insurance, which represents a fundamental threat to companies, especially as the vehicle insurance accounts for about 60 per cent of the portfolio of general insurance for most companies.
The absence of special department for insurance studies at colleges of commerce and economy at local universities is another challenge in addition to lack of insurance awareness among many dealers.
He added that overcoming these challenges will support the sector, which is very promising given in the light of its association with the ambitious five-year development plans adopted by the government.
The insurance sector in the Sultanate is a promising one and we expect that it will register a rapid growth as is associated with the development plans adopted by the government.
It was noticed that the volume of expenses in the Eighth Five-Year Plan is the largest ever. The Sultanate raised the volume of expenditure in this year's budget to more than RO 10 billion.
The eighth plan is the fourth link of the long-term development strategy (future vision for Oman’s economy — Oman 2020) and its objectives and policies follow the main axes in the balance of investment, continued growth, human development, economic diversification and the growth of private sector.
The eighth plan seeks to promote opportunities for economic growth and to achieve growth rates of not less than 3 per cent, as well as to continue to adopt policies to raise the oil and gas production and expansion of exploration to increase reserves. This is in addition to the emphasis on continuing to give priority to government allocation for the provision of social health services, public education, water supply, sanitation services, alongside the development of the sectors of oil and gas, tourism and industry.
The challenges and difficulties facing the insurance can be divided into general challenges that require all the workers at this sector to face them, and the other challenges are related to problems faced by insurance companies, which can affect its continuity.
It should be noted that the Omani Association of Insurance is in touch with the Capital Market Authority represented in Chief Executive of the Authority and workers on the insurance sector who are sparing no effort in helping the Society to overcome these obstacles.
The challenges facing the insurance sector in general are represented at the lack of awareness of insurance to a large segment of customers, and the increase at the frequency of traffic accidents in the Sultanate as well as the introduction of simple traffic accidents system that prevented the intervention of the Royal Oman Police in the investigation of those incidents which gave the opportunity for some people to manipulate and dupe on the insurance companies.