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Q3
R E P O R T N O9 1 - B
OMANI LISTED
INSURANCE
COMPANIES
PERFORMANCE
ANALYSIS FOR
NINE MONTH
PERIOD OF 2020
7 DECEMBER 2020th
Badri Management Consultancy is proud to have won the Strategic Partner of the
Industry at the 7th Middle East Insurance Industry Awards 2020 conducted by
Middle East Insurance Review.
The award is a reflection of the trust and loyalty of our esteemed clients, and the
hard work and dedication of all our people at Badri.
Apart from excellence in core actuarial services, Badri has raised the bar in providing
industry insights with market specific reports, trainings, newsletters, and data
analytics with an aim to benefit the insurance industry at large.
Thank you Middle East Insurance Review and the judges for acknowledging all
the efforts put in behind the scenes.
GLADTIDINGS
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ABOUTBADRI
MANAGEMENTCONSULTANCYBadri Management Consultancy is the
fastest growing Actuarial ConsultingFirm in the Middle East, recognized forits collaborative approach to workingwith its clients as Profit OptimizingPartners. We are serving as AppointedActuary for over 20 companies in theGCC. In addition, we are providingother services including IFRS17Implementations, Development of ERMFramework, Specialized services forMedical Insurance and TPAs, BusinessIntelligence solutions and End ofService Benefits Valuations.
01
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Articles
We help our clients be the best version ofthemselves by fostering partnerships, challengingnorms and providing cutting edge solutions. Weinspire our people to constantly evolve and chaseexcellence with integrity in a diverse, exciting andgrowth-oriented culture.
VISIONS o l u t i o n a r c h i t e c t s s t r e n g t h e n i n g o u r
p a r t n e r s t o o p t i m i z e p e r f o r m a n c e
MISSION
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
WWW.BADRICONSULTANCY.COM
6 Summary of 2020-Q3
7 A Look At 2019-Q3
8 Gross Written Premiums
10 Conventional Vs Takaful
11 Retention Ratio
12 Profit Before Tax
14Profit as a Percentage of Net Earned Premium
15 Premiums and Profit analysis
16 Net Technical Provisions
17 Loss and Combined Ratio
19 Loss and Expense Ratio
20 Expense Ratio
23 Return on Equity
24 Cash To Invested Assets
25 Insurance Receivables
26 Asset Mix
27 Total Comprehensive Income
28 Conclusion
29 Disclaimer
30 Companies Included in the Analysis
31 About our team
32 Contact us
con
ten
t
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
Business
Written
RO 309mn
By Listed
Companies
Listed
Companies
Exhibited
52%Profit Growth
Industry
Combined
Ratio
87%
Insurance
Receivables
to GWP
35%Listed
Companies
Recorded
Profit
RO35mn
Highest GWP
Growth
6%By
DICS
Highest ROE
33%By
NLIF
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Summary of 2020-Q3
37%
12%9%
8%
8%
26%
Market Share
NLIF DICS AMAT OQIC OUIS Others
77%73%
67%63%
55%51% 49% 47%
39% 38%
0%
20%
40%
60%
80%
100%
120%
MC
TI
VIS
N
NL
IF
DIC
S
TA
OI
AM
AT
OU
IS
OQ
IC
AIN
S
AF
IC
Business Segment wise Loss Ratio
General Life Total
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
A Look At 2019-Q3
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`
`
`
Gross Written
Premium of
Listed Companies
RO
319mn
Net Technical
Reserves booked
by Companies
RO
217.7mn
Highest Gross
Written Premium
NLIF Contributes
to 37% of the
business share for
Q3-2019.Profits
Recorded in
Q3-2019
RO
22.7mn
RO
113mn
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
The insurance companies in the Sultanateobserved a drop in business with total Grosswritten premium of about RO 309 million,depicting a decline of 3% from YTD 2019-Q3.DICS, OQIC and AFIC observed a growth inpremiums when compared to last year.
The TOP 5 insurers in terms of GWP amountedto RO 229 million, hence contributing 74% ofoverall market.
NLIF being the market leader in Health and LifeInsurance secures top rank and contributed 37%share in insurance sector for the nine monthsended 2020. NLIF's premium of RO 113 millionincludes RO 59 million from overseas subsidiarieswhich is about 52% of their total business.However, as the consolidated numbers arereported, we have used the consolidatedfinancials statements.
DICS exhibited the highest GWP growth rate of6%, while AINS observed the largest decline of18%.
Gross Written Premiums
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-2%-5%
-18% -3%
2%
0
5
10
15
20
25
TA
OI
VIS
N
AIN
S
MC
TI
AF
IC
RO
Mil
lio
ns
OTHERS
GWP 2019-Q3 GWP 2020-Q3
-4%
6%
-5% 2% -3%
0
20
40
60
80
100
120
140
NLI
F
DIC
S
AM
AT
OQ
IC
OU
IS
RO
M
illi
on
s TOP 5
GWP 2019-Q3 GWP 2020-Q3
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
Gross Written Premiums
The business for NLIF is concentrated in Health and Life Insurance which comprises 87% of the total grosspremiums of the Company for nine months ended 2020.
Excluding NLIF, the companies operating in Oman concentrate predominantly in Non-Life InsuranceBusiness. 84% of the GWP excluding NLIF is attributable to Non-Life Insurance, while as a percentage of theoverall market including NLIF, this works out to 58% for nine months ended 2020. The ratios have remainedconsistent with the previous period.
For AINS, segmental information was not available and thus all amounts have been allotted to Non-Lifeinsurance business only. Furthermore, for OUIS, the segmental information was only available on net basisand hence historical retention ratios were used to estimate the gross amounts.
Non-Life and Life segments each have exhibited a decline of 3% in GWP as compared to the correspondingperiod of 2019, resulting in an overall drop of 3% in written business of Oman Insurance Industry.
The above graph is sorted with respect to gross written premium in descending order.
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11% 13%
87% 88%94% 94%
88%
71%77%
83%80%
68%74%
90%
100% 100%
79%75%
79%83%
89% 87%
13% 12%6% 6%
12%
29%23%
17% 20%
32%26%
10%
21%25% 21%
17%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20
19
-Q3
20
20
-Q3
20
19
-Q3
20
20
-Q3
20
19
-Q3
20
20
-Q3
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19
-Q3
20
20
-Q3
20
19
-Q3
20
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-Q3
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19
-Q3
20
20
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20
19
-Q3
20
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-Q3
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-Q3
20
20
-Q3
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20
-Q3
20
19
-Q3
20
20
-Q3
NLIF DICS AMAT OQIC OUIS TAOI VISN AINS MCTI AFIC
LINE OF BUSINESS WISE WRITTEN PREMIUM BREAKUP
General Insurance Health and Life Insurance
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
In the Sultanate of Oman, out of 10 listed insurancecompanies, only 2 operate as Takaful Insurers,contributing 15% of the total written business in2020-Q3 which is consistent with 2019-Q3.
When comparing premiums with the correspondingperiod of 2019, Takaful insurers exhibited a declineof 4% whereas the Conventional insurers observed adecline of 3% in 2020-Q3.
The profit growth of Conventional insurers isinfluenced by NLIF, which recorded a growth of 91%in profits whereas on the Takaful front, both TAOIand AMAT exhibited a high profit growth of 132%and 47% respectively.
Conventional Vs Takaful
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85% 85%
15% 15%
0
50
100
150
200
250
300
350
GWP 2019-Q3 GWP 2020-Q3
RO
Mil
lio
ns
TAKAFUL & CONVENTIONAL BUSINESS
DISTRIBUTION
Conventional Takaful
-3% -4%
51%
67%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Conventional Takaful
BUSINESS GROWTH FOR
CONVENTIONAL & TAKAFUL INSURERS
Premium Growth Profit Growth
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
Retention Ratio
The retention ratios have been calculated as a ratio of net written premiums to gross written premiums.
The weighted average retention ratio for YTD 2020-Q3 stood at 57% for the companies in the Sultanate with NLIF reflecting highest retention of 83% while OQIC depicting the lowest retention of 23%.
Although there may be exceptions, retention ratios are generally reflective of lines of business being underwritten; Motor and Medical generally tend to have high retention ratios while commercial lines such as Aviation, Engineering and Fire tend to have lower retention.
Life business shows higher retention levels than Non-Life business.
The weighted Average Retention ratio for Non-Life stood at 47% for 2020-Q3 in contrast with Life business retention ratio which is computed as 70%.
A further segmented analysis on a line of business is not performed due to limited information being available.
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0%
20%
40%
60%
80%
100%
NL
IF
AIN
S
OU
IS
TA
OI
AF
IC
AM
AT
DIC
S
MC
TI
VIS
N
OQ
IC
RETENTION RATIO
Retention Ratio 2020-Q3 Weighted Average Retention Ratio
0%
20%
40%
60%
80%
100%
NL
IF
AIN
S
TA
OI
OU
IS
AM
AT
DIC
S
AF
IC
VIS
N
MC
TI
OQ
IC
RETENTION RATIO - NON–LIFE BUSINESS
Retention Ratio 2020-Q3 Weighted Average Retention Ratio
0%
20%
40%
60%
80%
100%
NL
IF
AF
IC
DIC
S
OQ
IC
OU
IS
MC
TI
AM
AT
TA
OI
VIS
N
RETENTION RATIO – LIFE BUSINESS
Retention Ratio 2020-Q3
Weighted Average Retention Ratio
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
Profit Before Tax
The Insurance companies in the Sultanate ofOman have shown a profit growth of 52%,where the total profit amounted to RO 35Million for 2020-Q3 (2019-Q3: RO 23 Million).It is worth mentioning that the profit growthdrops to 28% (from 52%) for 2020-Q3 if NLIF isexcluded from this analysis.
NLIF booked the highest profit amounting toRO 16.4 Million, which is an increase of 91%from 2019-Q3 (RO 8.6 Million). NLIF makes up47% of the total profit of the companies in theSultanate for 2020-Q3. Having said that, itshould also be noted that out of the RO 16.4Million, 84% (RO 13.7 Million) of the profits arefrom business within Oman.
The highest profit growth was recorded byTAOI of about 132% while the largest declineof 61% for the period was recorded by MCTI.Nevertheless, MCTI has managed to record aprofit in 2020-Q3 after incurring losses sinceyear-end 2019 up to 2020-H1 as shown in ourpast performance analysis reports.
For Takaful companies, net profits before taxon policyholder and shareholder accounts areconsolidated for comparative purpose.
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91%
77% 4% 36%
47%
0
2
4
6
8
10
12
14
16
18
NLIF OUIS AINS DICS AMAT
RO
Mil
lio
ns
TOP 5 COMPANIES BY PROFIT
Profit 2019-Q3 Profit 2020-Q3
1%-9%
46%
132%
-61%
0
0
0
1
1
1
1
1
2
2
VISN OQIC AFIC TAOI MCTI
RO
Mil
lio
ns
OTHERS
Profit 2019-Q3 Profit 2020-Q3
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
Investment Income has contributed in generatingprofits for all the listed Companies performing inOman.
MCTI and AFIC recorded a loss on underwritingactivities which was offset by the investmentincome.
Overall, four companies have investment incomewhich is higher than the underwriting profits. Thisshows the importance of investment income in theindustry when the primary profit source of insurancecompanies is expected to be from underwriting.
The analysis presented here is sorted by Profitbefore investment income.
Profit Before Tax
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-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
NL
IF
OU
IS
VIS
N
AIN
S
OQ
IC
DIC
S
TA
OI
AM
AT
AF
IC
MC
TI
PROFIT COMPOSITION -
UNDERWRITING & INVESTMENT
INCOME
Investment Income 2020-Q3 Profit Before Investment 2020-Q3
-2
0
2
4
6
8
10
12
14
16
18
NLI
F
OU
IS
AIN
S
DIC
S
VIS
N
OQ
IC
AM
AT
TA
OI
AF
IC
MC
TI
RO
Mil
lio
ns
UNDERWRITING & INVESTMENT
INCOME
Profit Before Investment 2020-Q3 Investment Income 2020-Q3
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
Profit as a Percentage of Net Earned Premium
The above graph illustrates the Profit Margin [bottom line profit/(deficit) as a proportion of net earnedpremium] for the insurance companies in the Sultanate for YTD 2020-Q3.
The Profit Margin of the Oman Insurance Industry stands at around 21% for 2020-Q3.
As depicted, OUIS has the highest profit margin, followed by AINS.
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-5%
0%
5%
10%
15%
20%
25%
30%
35%
OUIS AINS VISN OQIC AFIC DICS NLIF AMAT TAOI MCTI
PROFIT AS % OF NET EARNED PREMIUM
Profit Margin 2020-Q3 Weighted Average 2020-Q3
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
Premiums and Profit Analysis
A summary of premium and profitability growth in 2020-Q3 from the corresponding period of 2019 ispresented. Companies exhibiting premium and profitability growth rate outside of the +-20% and +-100%range are capped, respectively.
15
CompanyRanking
Indic.Gross Premium Profit
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NLIF
DICS
AMAT
OQIC
OUIS
TAOI
VISNAINS
MCTI
AFIC
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
-20% -15% -10% -5% 0% 5% 10% 15% 20%
GW
P G
row
th
Profit Growth
NLIF 1 1 -
DICS 2 4 (2)
AMAT 3 5 (2)
OQIC 4 7 (3)
OUIS 5 2 3
TAOI 6 9 (3)
VISN 7 6 1
AINS 8 3 5
MCTI 9 10 (1)
AFIC 10 8 2
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
Total Net reserves as at the end of September 2020dropped by 3% when compared with thecorresponding period of 2019.
NLIF has the highest technical provisions ascompared to the other companies, which iscommensurate to the size and nature of itsoperations. However, since almost 52% of thebusiness for NLIF is written outside Oman, it is safeto assume that a similar proportion of reserveswould also be booked overseas.
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Net Technical Provisions
5%
-1% -7%-24%
-9%
0
2
4
6
8
10
12
14
16
AFIC MCTI OQIC TAOI VISN
RO
Mil
lio
ns
REMAINING COMPANIES BY
NET TECHNICAL PROVISION
Claims Reserves 2019-Q3 Claims Reserves 2020-Q3
1%
-2% 1%-8%
-1%
0
10
20
30
40
50
60
70
80
NLIF DICS OUIS AINS AMAT
RO
Mil
lio
ns
TOP 5 COMPANIES BY NET
TECHNICAL PROVISIONS
Claims Reserves 2019-Q3 Claims Reserves 2020-Q3
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
Loss and Combined Ratio
The weighted average loss and combined ratio of the insurance companies in the Sultanate of Oman iscomputed to be 60% and 87% respectively, with MCTI bearing the highest loss ratio and combined ratio of77% and 107% respectively, whereas the lowest combined ratio of about 79% is depicted by OUIS.
For Takaful companies we have consolidated the policyholders and shareholders P&L for comparativepurposes. A company is deemed to be profitable from an underwriting perspective if the combined ratio isbelow 100%.
Loss Ratio is computed as Net Incurred Claims over Net Earned Premium.
Combined Ratio is calculated as ratio of Net Incurred Claims along with Expenses and Net Commissionsover Net Earned Premiums.
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0%
20%
40%
60%
80%
100%
120%
MC
TI
AF
IC
TA
OI
AM
AT
DIC
S
OQ
IC
NLI
F
VIS
N
AIN
S
OU
IS
LOSS & COMBINED RATIO
Loss Ratio Combined Ratio
Weighted Average Loss Ratio Weighted Average Combined Ratio
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
Since the Life and Non-Life business segment wise information was available, Loss Ratio analysis on the breakup is also presented. However, for AINS, segmented information was not available, hence all the information is allotted to General business.
For MCTI, information for losses incurred was not available on the segmental level; therefore loss ratios provided in financial statement have been used as given. For OUIS, only loss ratios for Non-Life segment was provided and the same was used to estimate the loss ratio for Life segment.
Due to limited information, the graph shows reported loss ratios for Life and Non-life segments.
The weighted average loss ratio for Non-Life business worked out to be 53% whereas Life business had a weighted average of 67%.
The weighted average loss ratios for takaful insurers are lower than those of their conventional insurance counterparts. However, due to significantly higher expense and net commission ratios exhibited by the takaful operators, the overall combined ratio for takaful companies is higher than that of conventional insurance companies.
Loss and Combined Ratio
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53%61%
32%22%
13%4%
95%
86%
0%
20%
40%
60%
80%
100%
120%
Takaful Conventional
Loss and Combined ratio
performance - Insurer Type
Loss Ratio Expenses
Net Commission Combined Ratio
77%73%
67%63%
55%51% 49% 47%
39% 38%
0%
20%
40%
60%
80%
100%
120%
MC
TI
VIS
N
NL
IF
DIC
S
TA
OI
AM
AT
OU
IS
OQ
IC
AIN
S
AF
IC
Business Segment wise Loss Ratio
General Life Total
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
Loss and Expense Ratio
The above is sorted with respect to the loss ratios of all the companies.
MCTI displays the highest loss ratio while AFIC has the lowest loss ratio. The expense ratios for AFIC andAINS are higher than their respective loss ratios. The highest expense ratio is depicted by AFIC, so whiletheir loss ratios are low, the high expense ratio has pushed the combined ratio slightly above 100%. Thelowest expense ratio observed is 10% for VISN.
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77% 73%67% 63%
55% 51% 49% 47%39% 38%
30%
10%18% 27% 41% 44%
30% 38%45%
63%
0%
20%
40%
60%
80%
100%
120%
MCTI VISN NLIF DICS TAOI AMAT OUIS OQIC AINS AFIC
LOSS AND EXPENSE RATIO
Loss Ratio Expense Ratio
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
Expense Ratio
It is commonly believed that G&A expense ratio should be analyzed on the basis of gross written premiumsfor the company, hence, the same is included in our analysis.
The weighted average G&A expense ratio as proportion of GWP works out to be 12%. AINS has the highestexpense ratio (33%) for the nine months ended September 2020, whereas the lowest expenses areobserved by OQIC (6%).
Larger companies generally tend to have lower expense ratios, as they have sufficient business to absorbthe fixed cost base.
For Takaful companies, Wakala fees is ignored, as Wakala fees is a positive in one account and a negative inthe other.
Expense Ratio = General and Administrative expense as a percentage of Gross Written Premium
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0%
5%
10%
15%
20%
25%
30%
35%
AINS AFIC OUIS MCTI VISN DICS AMAT TAOI NLIF OQIC
G&A EXPENSE AS A RATIO OF GROSS WRITTEN PREMIUM
G&A Expenses Ratio Weighted Average Ratio
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
Expense Ratio
Considering G&A Expense as a proportion of Net Earned Premiums, AFIC bears the highest expense ratio of50% followed by VISN and MCTI with both having expense ratios of 48%.
NLIF recorded the lowest expense ratio in the industry at 10%.
The weighted average G&A expense ratio as a proportion of net earned premium for the Listed Insurancecompanies stands at 22%.
The expense ratio is worked out as:Expense Ratio = General and Administrative Expense as a percentage of Net Earned Premium
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0%
10%
20%
30%
40%
50%
60%
AFIC VISN MCTI AINS AMAT DICS OQIC OUIS TAOI NLIF
G&A EXPENSE AS A RATIO OF NET EARNED PREMIUM
G&A Expenses Ratio Weighted Average Ratio
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
Expense Ratio
The highest commission expense ratio recorded as of 2020-Q3 is for TAOI at 18% while VISN experiencedthe lowest ratio of -32%. The average net commission ratio for the Omani Insurance Industry stood at 5%.
The commission expense considered is the net commission (commissions paid less commissions earned); anegative ratio signifies that the commissions earned outweigh the commissions paid. It is common practicefor companies to cede out large proportion of commercial lines business and benefit from the reinsurancecommissions, which is also evidenced by the low net commission ratio.
It is felt that there is an inherent need to optimize reinsurance arrangements so that companies can benefitfrom underwriting profitable business without passing the risk and reward to re-insurers and just acting asfronting partners; while at the same time not effecting their solvency position.
Commission ratios are calculated as a Net Commissions upon Net Earned Premium.
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-30%
-20%
-10%
0%
10%
20%
30%
TAOI AFIC AMAT AINS OQIC NLIF OUIS DICS MCTI VISN
COMMISSION EXPENSE RATIO
Net Commission Expense Ratio Weighted Average Ratio
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
Return On Equity
The weighted average Return on Equity (ROE) for the Insurance companies in Oman recorded to be 16%. NLIF has the highest return on equity of about 33% whereas MCTI has recorded the lowest return of -6%.
The Return on Equity is calculated as a ratio of net profit (before tax) recorded over the last 12 months to total of shareholder's equity at the beginning of the period 2020.
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-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
NLIF OUIS DICS AINS VISN OQIC AFIC AMAT TAOI MCTI
RETURN ON EQUITY
ROE Weighted Average Ratio
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
Cash To Invested Assets
The Cash ratio of the industry works out to 66%. AINS has the highest level of 91% maintained as Cash,while the lowest ratio of 44% is produced by MCTI.
The Cash Ratio indicates very high liquidity for the market as a whole.
The Cash Ratio has been taken as the ratio of Cash and Bank Deposits to Total Invested Assets.
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0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
AINS OUIS VISN TAOI OQIC AFIC AMAT DICS NLIF MCTI
CASH RATIO
Cash to Invested Assets Ratio Weighted Average
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
Insurance Receivables
The insurance receivables are computed as a ratio of Insurance receivables of the company to gross writtenpremium recorded over the last 12 months.
NLIF and AMAT are observed to have the highest receivable ratio of about 40%, while TAOI and DICSrecorded the lowest ratio of 27%. The weighted average insurance receivables ratio for the Omani industrystood at 35% as at September 30, 2020.
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0%
10%
20%
30%
40%
50%
60%
NLIF AMAT AINS AFIC MCTI VISN OQIC OUIS TAOI DICS
INSURANCE RECEIVABLES
Insurance Receivable Weighted Average
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
Asset Mix
The Asset Mix compares the proportion of invested assets and non invested assets of the companies inOman insurance industry as at September 30, 2020. OUIS has the highest proportion (59%) of investedassets, followed by AFIC, MCTI and AINS; each having 54% of their assets invested. Whereas AMAT has thelowest proportion of asset mix at 36%.
The above chart is sorted in descending order of the proportion of invested assets of the companies.
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59%54% 54% 54% 50% 47%
37% 37% 37% 36%
41%46% 46% 46% 50% 53%
63% 63% 63% 64%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
OUIS AFIC MCTI AINS NLIF DICS VISN OQIC TAOI AMAT
Asset Mix
Invested Assets Non-Invested Assets
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
Total Comprehensive Income
The Indices of general market performance in the Stock Exchange exhibited a declining trend post theoutbreak of COVID 19. The realization of the decline is reflected through either profit & loss accounts orOther Comprehensive Income statements of the Companies.
The Total Comprehensive Income (Profit after Tax plus Other Comprehensive Income) for the first ninemonths of 2020 has exhibited an increase of 32%. This increase is mainly due to exceptional growth inprofits after tax displayed by NLIF, and ironically NLIF have also recorded the highest deterioration in Othercomprehensive income when compared with the corresponding period of 2019. Nonetheless, the growthpercentage of Total Comprehensive Income drops to 13% (from 32%) if NLIF is excluded.
Only 7 (out of 10) companies segregated their OCI in their financial statements, 6 out of those 7 recordedlosses in the fair value of their investments for 2020. It is observed that OCI for companies on an aggregatelevel has declined by 374% in the first nine months of 2020 when compared with the corresponding periodof 2019.
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(5)
(3)
(1)
1
3
5
7
9
NLIF OUIS AINS DICS AMAT OQIC VISN TAOI AFIC MCTI
RO
Mil
lio
ns
TOTAL COMPREHENSIVE INCOME – 2019-Q3
Profit After Tax - 2019-Q3 OCI - 2019-Q3 Total Comprehensive Income - 2019-Q3
(4)
(2)
-
2
4
6
8
10
12
14
16
NLIF OUIS AINS DICS AMAT OQIC VISN TAOI AFIC MCTI
RO
Mil
lio
ns
TOTAL COMPREHENSIVE INCOME – 2020-Q3
Profit After Tax - 2020-Q3 OCI - 2020-Q3
Total Comprehensive Income - 2020-Q3
Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
Conclusion
• The aftershock of the pandemic resulted in the 3% decline in topline for the listed insurance companies inOman for the nine months of 2020 when compared to the corresponding period of 2019. The totalpremiums written in this period amounted to be RO 309 million as compared to RO 319 million ofpremiums written in the corresponding period of 2019.
• The average premium retention ratio stood at 57% for year-to-date 2020-Q3.(Life business retention ratio: 70% and Non-Life business: 47%).
• The average loss ratio for the listed companies analyzed in the report stood at 60% and average combinedratio was at 87%. The average combined ratio for Takaful and Conventional insurers was evaluated to be95% and 86% respectively, despite Takaful companies on average having lower loss ratios; their highexpense ratios elevates the combined ratio near 100%.
• The profits recorded for first nine months of 2020 observed a growth of 52% when compared with thecorresponding period of 2019. Total Profit by the listed insurance companies for the period amountedto almost RO 35 Million compared to RO 23 Million recorded in the corresponding period of the previousyear. The profit growth of 52% drops to 28% if the exceptional growth of NLIF is excluded. For Takafulcompanies, policyholders and shareholders P&L was considered for comparative purposes.
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Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
Disclaimer
❖ The data represented in our report was gathered from publicly available information, and the financialstatements released by the companies.
❖ We have undertaken an analysis of the Key Performance Indicators (KPIs) of the listed insurance for thenine months ended September 30, 2020. The data has been extracted from financial statements of thosecompanies which were publicly listed.
❖ While we have tried to ensure accuracy in the data input and evaluation process, in view of the naturalscope for human and/or mechanical error, either at input or during analysis, we accept no liabilitywhatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part ofthis publication. If you come across an error or have a query, do write to us.
❖ Due to Limited information we were unable to segregate further into class of business. Once allcompanies start publishing financial statements with uniform level of segregation, this can be done.
❖ The Group & Individual Credit Life, Family Takaful and Term & Whole Life Plans are considered as LifeInsurance while Other General Insurance are taken as Non-Life Insurance due to the availablesegmentation in the published financials. For NLIF and MCTI, Medical is not segregated from Life in thepublished financial statement therefore, due to limitation it is presented under Life Business segment.
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Badri Management Consultancy
2020-Q3 Omani Listed Insurance Companies
Companies Included in the Analysis
Company Name Ticker Name
Al Madina Takaful AMAT
Al-Ahlia Insurance Company AINS
Arabia Falcon Insurnace Company AFIC
Dhofar Insurance Company DICS
Muscat Insurance MCTI
National Life & General Insurance NLIF
Oman United Insurance Company OUIS
Oman Qatar Insurance Company OQIC
Takaful Oman Insurance TAOI
Vision Insurance Company VISN
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