What role does FIC play, and how has the company positioned itself in the Omani market?
There are over 20 companies in the Omani market, and FIC is relatively new. We entered Oman in 2005. Our current market share is around 4%, which is at the lower end of the middle seven or eight companies. In the last two to three years, we have been looking at moving into the top tier of companies. The government has issued a ruling concerning the raising of capital, and all insurance companies are now required to go public.
Considering the current economic situation, what can drive growth in the insurance sector, and what customer segment is available for insurance companies?
The market premium has grown substantially in the last few years in both motor and medical insurance, so this is where the bulk of growth is happening. Most growth is in the medical insurance segment, and we will continue to see growth in that area because medical insurance may soon be made mandatory for expatriates as well. On the other hand, an oversupply of insurance companies is bringing prices down, making it more difficult to make a profit on medical insurance.
Do you see a need to adjust the regulatory framework as the medical insurance sector expands?
Companies are allowed to self-regulate and reach a similar level of premium when underwriting. In the overall sector, regulators introduced new rules to encourage more consolidation in the insurance market. Mergers have not really happened in the insurance sector, although there have been some consolidations in the banking sector.
What are the adaptations you are making, and what effects are they having on your business and the sector?
One area where there is a lot of potential for growth, and where we want to expand into, is that of individual life insurance. It is still low, with the majority of insurance in the life segment being loan-based credit life. In the medium- to long-term, we expect to see a slow increase in the personal lines of life insurance.
How would you assess the overall state of the insurance sector in Oman?
The sector is still a bit delicate, because most of companies are still dependent on investment returns for final profits. In 2013 there were impressive investment results for all companies, which led to the highly competitive insurance segment we have now in Oman. Investment results were not nearly so positive in 2014. This market needs to understand this situation and make the necessary adjustments. We have a population of four million and $1 billion premium divided between 22 insurance companies. Oman is oversaturated.
In such a crowded market, how do you differentiate yourself from the other players?
We work on developing relationships with our clients. We are on the customer's side, and we want to be there for them at all times. This is reflected in the fact that many of our clients have been with us for many years. If any of our clients suffers a loss, we want to be with them and ensure that they are up and running as soon as possible.
What are your expectations for the year for FIC?
My main objective for this year is to expand our reach. We will of course have challenges in terms of manpower costs, various factors adversely affecting the overall sector and economy, and also the competitiveness and crowdedness of the sector. In the past four years, we have concentrated mainly on corporate and various commercial insurances. We are recruiting more quality people in line with our geographical expansion this year, and we want to concentrate more on retail insurance. We are looking at 15-20% growth.
What are some of the specific needs and demands in the retail and corporate sectors?
The insuring public has one demand from insurance companies: lower premiums. Price drives the majority of insurance decisions. Even if FIC was to settle a major claim, the client may choose to take a policy with a company offering slightly lower premiums.