CMA Instructs Insurance Companies to Include Coronavirus in the Insurance Cover of the Insured
HE Sheikh Abdullah Salim Al Salmi, Executive President of the Capital Market Authority has commended the role insurance companies plays and their quick response with tangible and earnest steps of solidarity with the community and the economy in the light of the exceptional circumstances in Oman and worldwide to confront the coronavirus epidemic such as the national initiative of insurance companies to take part in the confrontation of the epidemic, curb its spread and to mitigate the consequence as part of the procedures taken by the Supreme Committee tasked with dealing with developments of the coronavirus (COVID-19).
The Executive President of the CMA said that a number of insurance companies have contributed to the fund for support of the health services (Waqf Fund) which aims to provide healthcare in the current circumstances. HE praised the initiative of the insurance companies to cover the costs of medical tests and treatment of the insured individuals who are infected with the coronavirus as additional initiative to the efforts of the Supreme Committee which is highly responsible and professional response in line with the instructions of the CMA within the cooperation of all the institutions of the community adding that such initiative would reflect positively in mitigating the pressure on the government health institutions and the financial burden on the Government to face the epidemic.
Al Salmi said in statement to the media that the role insurance companies playing represents the real goals of the insurance sector in taking the required measures to protect the community from the risks and the consequent financial damage. Furthermore, such role and presence of the insurance sector reflects the readiness and compliance of the sector to accommodate the changes and events the Omani community and economy is witnessing to lessen the resultant consequences which could results from such unexpected developments which is one of the key goals of the both the conventional and Takaful insurance sector.
Al Salmi said that despite the stance of the insurance in the current event of epidemic and in the events of exceptional weather conditions in the past years and recurrence of such events highlights the need to create means of mitigation of the impact of such events on the economy, the community and the Government, In this regard CMA is considering establishing a fund for “Calamities” to compensate the risks which are not covered by normal insurance such as epidemics (COVID-19) or compensation of those who have no insurance coverage resulting from such calamities which is a custom procedure in many countries.
HE continued his talk about the role of the insurance sector in confronting the coronavirus breakout pointing out that the CMA has taken a number of precautionary measures since the beginning of the crisis including measures to curb the spread of the disease and other relating to mitigating the consequences of the precautionary measures on investment activities. He said insurance companies were instructed to pay all the financial dues to the providers of health services in the hospitals, polyclinics and clinics to support the continuation of their services so as not to impact their cash flows due to the epidemic and precautionary measures which led to closure of a number of private health institutions and specialized clinics further to precautionary measures such as reducing the number of visitors to the institutions to continue providing the service. CMA and the Ministry of Health have taken measures to ensure cash flows for such institutions to continue providing the service through continued coordination.
Al Salmi expressed his pleasure with the constructive cooperation of the insurance companies in the provision of the services remotely and employing the technology to provide the insurance service . He added the sector succeeded in providing the service remotely via various electronic means to ensure continuation of the service for the people, the economy and the community in general which enabled the customers to obtain the insurance service regardless of their places and locations which contributed to avoiding many risks resulting from unavailability of insurance for expired policies during the breakout such as motor insurance , health insurance and properties insurance etc.
With regard to the endeavors to upgrade the insurance services Al Sami pointed out that the CMA’s decision issued in September 2016 approving the guide for improving the quality of the insurance services rendered by insurers had an excellent impact and contributed to enhancing the competition between insurance companies to provide quality services and upgrade them to better levels through focusing on enhancing customer service culture and coping with state of the art customer service technology which resulted in the companies’ readiness in dealing with the coronavirus outbreak and the sector was a model example in dealing with the crisis.
On the financial position of the insurance companies Al Sami said the audited financial statements shows, with continued follow up, that they enjoy good financial solvency enabling them to deal with such crisis and discharge their obligations toward policyholders which add great confidence in the financial efficiency of the Omani financial sector generally as the insurance sector is one of the key financial sectors in the times of crisis.
Al Salmi added that the insurance sector is not isolated from the other financial sectors as regards the adverse impact of the coronavirus breakout in addition to the economic consequences resulted from the sharp drop in oil prices which their impact is obvious on all economic activities as new offerings are expected to decrease as well as delays in receiving and dues from the customers which would impact their liquidity if the situation continue.
HE the Executive President confirmed the importance of insurance companies working urgently on setting appropriate strategies for the requirements and challenges of the current phase through reducing expenses and improving the quality of the services they render employing technology and practical policies and measures for risk management and redrawing their investment policies and underwriting policies in their insurance portfolios. He added there are continued follow up with all the constituents of the sector to achieve stabilization and enhanced competition for the benefit of stakeholders especially policyholders.
It is noteworthy that the audited financial statements of the insurance sector in 2019 show gross direct premiums have increased by 5% to RO 486.5 at the end of 2019 compared to RO 463.5 at the end of 2018. The sector data shows that the average growth in gross premiums in the past five years was 4%. The number of insurance companies licensed to operate was 20 in addition to Oman Reinsurance Company. There was more than 35 insurance brokers at the end of 2019 beside 145 insurance agents.
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