Recent global developments have significantly heightened the importance of marine insurance and war-risk coverage, placing new pressures on the insurance sector in Oman. This shift was highlighted during the Oman Insurance Summit and Awards 2026, where Maali bint Salim al Majarfi, Acting Director of the Issues and Financial Instruments Department at the Financial Services Authority (FSA), addressed the evolving challenges and opportunities facing the industry.
Before recent conflicts, an average of 120 to 140 vessels passed daily through the Strait of Hormuz, a critical maritime route. However, that number has plummeted by approximately 95 percent, with just five ships currently transiting the area. This dramatic decline has underscored the growing risks in marine insurance, particularly war-risk coverage, which until now had been priced at minimal levels. Al Majarfi noted that this new reality is reshaping the insurance landscape for the long term, emphasizing that the sector may not return to previous norms for decades.
The summit, themed around enhancing insurance penetration, contributing to GDP, and promoting Omanisation, also explored broader issues including challenges in Takaful insurance and the expanding role of digital transformation within the sector. Oman’s insurance penetration rate remains relatively low, averaging between 1.2 and 1.4 percent over the past three to four years, a figure well below GCC and global averages. This indicates considerable room for growth across both individual and business markets.
Key challenges identified include limited public awareness, concerns over the relevance and affordability of existing insurance products, and trust issues affecting the perceived value of coverage. Al Majarfi pointed out that many products currently do not meet the real needs of customers, with cost being a major barrier. She emphasized that improving digital accessibility and convenience could foster greater awareness and strengthen the local insurance culture.
In response to these challenges, efforts are underway to build market capacity and resilience, reducing reliance on international insurers—a factor made more urgent by recent geopolitical tensions. The government’s role is evolving from that of a regulator to a market enabler, demonstrated by initiatives such as the Dhamani insurance platform, updated regulatory frameworks, and programs to enhance actuarial expertise within Oman.
Innovation in product offerings is also a focus, with new policies being introduced to address emerging risks. These include motor natural catastrophe coverage, enhancements to third-party motor insurance, and proposed defect liability insurance expected to launch by early 2027. Coverage expansions are also being pursued in sectors like agriculture, livestock, artisanal fishing, and domestic worker protection. Additionally, specialized insurance for adventure tourism is being developed in partnership with the Ministry of Heritage and Tourism, while collaborations with the Ministry of Culture, Sports and Youth aim to align insurance solutions with evolving economic sectors.
Al Majarfi concluded by stressing that improving the sector is a shared responsibility. She underscored that regulation alone is insufficient and called on the market to innovate proactively, anticipate risks, and develop solutions before challenges arise rather than responding afterward.