Uptake of health insurance coverage declines 47% in 2020

June 21, 2021

Pandemic impacts: General, life, motor, marine, property and engineering insurance segments report fewer policies last year

The uptake of insurance coverage in the Sultanate fell in most of the key segments of the sector during 2020 as the protracted global economic downturn, compounded by the coronavirus pandemic, took its toll, a new report by the Capital Market Authority (CMA) — the sector regulator — has revealed.

Motor insurance policies issued in 2020 slumped 9.3 percent to 1.402 million policies, down from 1.546 million a year earlier, the Authority disclosed in its newly published Insurance Market Index 2019 – 2021. The decline was fuelled by, among other factors, a 13 percent drop in third-party motor insurance policies, the report said.

Life insurance policies tumbled by a steep 41.2 percent to 131,676 policies last year, down from 224,115 policies in 2019.

The biggest drop was seen in coverage for groups, plunging by as much as 81.7 percent to 19,071 policies in 2020, down from 104,229 policies a year earlier.

However, life coverage for individuals (for more than one year) posted a marginal dip of 6.1 percent to 112,605 policies in 2020.

Property insurance policies issued last year declined 13.6 percent to 15,042 policies, down from 17,413 in 2019.

Other segments reporting weakened demand are marine insurance (-8.7 percent), engineering insurance (-21.1 percent), and other types of insurance (-44.4 percent). The sole bright spot was Liability Insurance which jumped 24.2 percent last year.

A big surprise was health insurance — by far the fastest-growing sector in terms of premiums — which registered a sharp 47 percent decline (12,234 policies) in policies issued last year, down from 23,099 policies in 2019.

Despite the downtrend in insurance uptake, the industry performed relatively well overall given the circumstances.

Total direct written premiums of insurance companies declined by about 4.3 percent to RO 465.895 million in 2020, compared to RO 486.582 million in 2019. Gross direct premiums from general insurance dipped 3.2 percent to RO 412.143 in 2020 (RO 425.880 million in 2019). Gross direct premiums for life insurance fell 11.4 percent to RO 53.752 million in 2020 (RO 60.702 million in 2019).

As anticipated, the burgeoning health insurance segment was the biggest contributor to gross direct premiums with a roughly 33 percent share (RO 155.193 million) last year, followed by motor insurance (RO 113.364 million), and property insurance (RO 71,376 million).

Despite the challenging economic conditions last year, insurance companies posted total net profits of RO 48.539 million in 2020, compared to RO 35.921 million in 2019, a jump of 35 percent. National insurance companies accounted for the lion’s share of RO 33.601 million in 2020 (23 percent increase over a corresponding net profit of 2019), while foreign insurance companies saw their net plunged 73 percent to RO 14.938 million).

Commenting on the results, the Authority stated: “Based on the results of the reports issued by the CMA related to the analysis of the performance of the insurance companies in the light of the coronavirus pandemic, we can say there was a slight adverse impact on the insurance sector but didn’t cause a remarkable increase in the costs of insurance claims while there were positive aspects for the pandemic in that the sector relied on modern technology and media in marketing, underwriting, opening files and payment of indemnities.”


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