25 August 2014
Muscat: As many as eight locally incorporated insurance companies, including a reinsurance firm, will offer shares to investing public within three years to comply with the recent amendments in insurance law.
Oman government has asked national insurance firms to float shares on the Muscat Securities Market (MSM) within three years, besides raising the minimum capital of insurance firms to OMR10 million from OMR5 million.
A Royal Decree was recently issued to amend certain clauses of the Insurance Companies Law related to listing and minimum capital requirement.
The national insurance firms that are expected to float shares on the local bourse are Al Ahlia Insurance Company, Muscat Insurance, Muscat Life Insurance, National Life Insurance, Oman & Qatar Insurance, Falcon Insurance and Vision Insurance. Further, the Sultanate's only reinsurance firm -- Oman Reinsurance Company (OMAN Re) -- will issue shares to investing public, Ahmed Ali Al Mamari, acting director general of insurance supervision at the Capital Market Authority (CMA), told Times of Oman.
The insurance companies will have to comply with all listing requirements and the promoters will have to divest 40 per cent in favour of investors.
16 firms to raise capital
Although the Sultanate has 22 insurance companies (11 locally incorporated and 11 branch operations of foreign firms), only four companies -- Dhofar Insurance, Oman United Insurance, Al Madina Takaful and Takaful Oman -- are listed. Of this Al Madina Takaful and Takaful Oman are Islamic insurance firms.
Of the 22 companies, 16 firms do not have the stipulated OMR10 million minimum capital and six firms have either OMR10 million or more paid up capital.
Grace period given
The existing companies have been given a grace period of three years to raise their minimum capital to OMR10 million.
Currently, only new companies are required to have a minimum capital of OMR10 million and need to go public when listing shares on the local bourse.
Citing reasons for raising minimum capital base of insurance firms, Al Mamari said it will make these institutions large enough to underwrite more risks and retain the premium within the country.
"The average annual growth in insurance sector in the last seven years was 14 per cent. So, it is the right time for the companies to raise capital, human resources and internal systems to enhance underwriting and retain more business within the country," he explained.
The new regulations will mark a new chapter in insurance sector in Oman since local companies will be able to withstand competition by strengthening their financial, technical and human resources.
"We need strong and capable insurance companies to withstand competition," noted Al Mamari.
Oman's insurance firms have achieved a gross premium of OMR114.60 million in the first quarter of this year.
Similarly, gross premium for the full year of 2013 grew by 10.44 per cent to OMR364.05 million, from OMR329.6 million posted for the previous year.
Muscat: As many as eight locally incorporated insurance companies, including a reinsurance firm, will offer shares to investing public within three years to comply with the recent amendments in insurance law.
Oman government has asked national insurance firms to float shares on the Muscat Securities Market (MSM) within three years, besides raising the minimum capital of insurance firms to OMR10 million from OMR5 million.
A Royal Decree was recently issued to amend certain clauses of the Insurance Companies Law related to listing and minimum capital requirement.
The national insurance firms that are expected to float shares on the local bourse are Al Ahlia Insurance Company, Muscat Insurance, Muscat Life Insurance, National Life Insurance, Oman & Qatar Insurance, Falcon Insurance and Vision Insurance. Further, the Sultanate's only reinsurance firm -- Oman Reinsurance Company (OMAN Re) -- will issue shares to investing public, Ahmed Ali Al Mamari, acting director general of insurance supervision at the Capital Market Authority (CMA), told Times of Oman.
The insurance companies will have to comply with all listing requirements and the promoters will have to divest 40 per cent in favour of investors.
16 firms to raise capital
Although the Sultanate has 22 insurance companies (11 locally incorporated and 11 branch operations of foreign firms), only four companies -- Dhofar Insurance, Oman United Insurance, Al Madina Takaful and Takaful Oman -- are listed. Of this Al Madina Takaful and Takaful Oman are Islamic insurance firms.
Of the 22 companies, 16 firms do not have the stipulated OMR10 million minimum capital and six firms have either OMR10 million or more paid up capital.
Grace period given
The existing companies have been given a grace period of three years to raise their minimum capital to OMR10 million.
Currently, only new companies are required to have a minimum capital of OMR10 million and need to go public when listing shares on the local bourse.
Citing reasons for raising minimum capital base of insurance firms, Al Mamari said it will make these institutions large enough to underwrite more risks and retain the premium within the country.
"The average annual growth in insurance sector in the last seven years was 14 per cent. So, it is the right time for the companies to raise capital, human resources and internal systems to enhance underwriting and retain more business within the country," he explained.
The new regulations will mark a new chapter in insurance sector in Oman since local companies will be able to withstand competition by strengthening their financial, technical and human resources.
"We need strong and capable insurance companies to withstand competition," noted Al Mamari.
Oman's insurance firms have achieved a gross premium of OMR114.60 million in the first quarter of this year.
Similarly, gross premium for the full year of 2013 grew by 10.44 per cent to OMR364.05 million, from OMR329.6 million posted for the previous year.
© Times of Oman 2014
