Alpen Capital forecasts 4.5% annual growth for Oman’s insurance market by 2028

Alpen Capital forecasts 4.5% annual growth for Oman’s insurance market by 2028

OMAN—Alpen Capital, a leading investment banking consultancy, has forecasted a significant growth in Oman’s insurance market, projecting an increase from approximately US$1.4 billion in 2022 to US$1.8 billion by 2028, representing an annualized growth rate of 4.5%.  

This projection is attributed to various macroeconomic factors, including anticipated GDP growth at an average CAGR of 3.1% and population growth at an average CAGR of 3.2% between 2023 and 2028. 

Despite Oman’s insurance market ranking 76th globally in 2022 based on Gross Written Premiums (GWP), it remains the lowest in the GCC. 

However, the market is steadily expanding, driven by factors such as population increase, economic growth, infrastructural development, and the introduction of mandatory health insurance. 

Health insurance comprises the largest segment, representing 35.4% of GWP in 2022, followed by vehicle insurance at 19.7%. 

This growth is supported by Oman’s economic diversification goals, stringent regulatory enforcement, and growing public awareness of insurance products. 

However, challenges such as reliance on oil, price competition limiting product innovation, and exposure to global economic fluctuations hindered growth. 

Notably, the non-life insurance category experienced a CAGR of 4.0%, reaching US$1.2 billion between 2017 and 2022, with health insurance being the primary driver. 

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The mandatory national health insurance program and the Dhamani electronic platform deployment further boosted growth. 

In 2022, health insurance saw a CAGR of 4.7%, driven by phased mandatory health insurance implementation covering over 5 million people. 

Conversely, motor insurance’s market share decreased despite mandatory coverage. Property insurance increased due to heightened awareness following significant natural catastrophe losses. 

Life insurance accounted for 12.4% of GWP in 2022, with moderate growth at a 1.9% CAGR from 2017. 

The expansion of non-life commercial lines is expected to align with infrastructure projects under the government’s Public-Private Partnership program. 

Looking ahead, Oman aims to progress major projects in 2024, stimulating the need for a wider range of insurance products. Consumer awareness and economic diversification efforts will drive demand for insurance products in the medium to long term. 

Meanwhile, Saudi Arabia still dominates Gulf insurance market with record US$14.2 billion premiums. 

This achievement underscores the kingdom’s pivotal role in the GCC’s economic structure and its rapidly evolving insurance sector. 

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