Oman Insurance Company has been enjoying some of its greatest success as Shirish Nadkarni discovers

Visitors to the United Arab Emirates (UAE) - even those from the global insurance industry - are often thrown by the name of the country's largest and most profitable insurance outfit, inevitably associating Oman Insurance Company with the neighbouring Sultanate of Oman.

Nothing could be further from the truth. Oman Insurance is a totally home-grown UAE product, having been established as the insurance arm of the Bank of Oman in 1975, and thus logically being named after its parent.

It remains UAE-bound, with a head office in Dubai and 10 branches spread all over the emirates.

Ironically, parent Bank of Oman subsequently changed its name to Mashreq Bank while the insurance subsidiary continued to carry the old name, partly because of the brand equity it commanded. However, it seems to have finally decided that enough is enough and a new name should be announced later this year.

Now in its 30th year, Oman Insurance has gone through a purple patch in the course of the last two years, in both tangible and intangible terms, with profits hitting record figures.

Written premiums improved from Dh254.67m in 2002 to Dh374.49m in 2003; and are understood to be above Dh450m in 2004, accounts for which were in the process of finalisation. Net profits have shot up from Dh42.24m in 2002 to Dh106.64m in 2003, and are understood to have doubled again to Dh203m in 2004.

Successful year

Abdul Muttalib Mustafa Mohammad Al-Jaidi, the venerable general manager, who normally sports the traditional Arab attire and maintains a flowing white beard, says "Indeed, 2004 was a golden year for Oman Insurance Company in all aspects. "Our shareholders' equity market capitalisation has crossed Dh1bn, and our total assets are Dh1.67bn. Our net profit for 2004 was the highest among all companies in the market here.

"In February 2004, we won the Dubai quality award in the gold category. And that came barely a year after we won the Sheikh Khalifa Excellence Award in Abu Dhabi and also earned the distinction of being certified for the Investor in People - UK Standard, for focusing on the development of our human resources."

While Oman Insurance deals in both life and non-life insurance, the majority of its business is marine, motor and banking.

"Our portfolio is balanced and well diversified among all types of general insurance," says Mr Muttalib. The company is trying to further strengthen its life and medical insurance business, which is less than 15% of its total portfolio, and the belief is that there will be more personal lines business in future.

"We accept very little reinsurance; whatever we do is mainly facultative, and mainly from the Gulf Co-operation Council (GCC) countries," says Mr Muttalib.

"But it is not a very high percentage of our portfolio, mainly because we are very conservative in accepting reinsurance. We know that several companies in the market have had painful experiences in this arena, and we do not wish to be victims."

For reinsurance of its own lines, the company deals with several world-class reinsurers, including Swiss Re, Munich Re, Hannover Re and Alliance.

Foreign competition

For the future, the company is quite happy that the UAE is opening up the insurance sector again to overseas players. It will keep a sharp eye open for lucrative partnerships and attempt to leverage its intimate knowledge of the local market.

"People who are frightened of the opening of the market have no vision at all," scoffs Mr Muttalib. "First of all, the insurance business is not a local, but a global, business. We have connections with international reinsurance companies and if any newcomer comes to the UAE market, he is most welcome.

"It would be a good experience for both of us. For us, it would be a learning experience, and we have no objection to sharing our knowledge of the market. We believe that, if we worry about their size and their big pockets, we would be nowhere.

"As the ministry said, they have to come to the UAE with different products.

And when they come, we could learn about their products, services and practices. That would give us an edge over other local competition.

"However, one point that strikes me is that, if the foreign players want to compete merely on rate, they would be doomed to failure. They need to add something to the market."

In the ongoing financial year, Oman Insurance is trying to improve its regional infrastructure in all respects, whether it be systems, staff or products.

"Our mission statement has it that we will be crossing the border, and going to other GCC markets," says Mr Muttalib. "Serious action has been initiated in this regard. We have products being sold by our associates in Saudi Arabia, Qatar and Oman as well. We want to formalise these sales as from our own branches, and have a presence all over the region."