Sayyida Dr Rawan Ahmed Al Said, CEO of Takaful Oman shares her thoughts on building a robust Islamic Insurance company over the last seven years and its future roadmap. Mayank Singh reports

-An OERLive Exclusive

Takaful Oman Insurance Company is the Sultanate’s first fully-fledged Islamic insurance provider. How has the company grown in the Islamic Insurance market since its inception?

We are the youngest insurance company in Oman, having seven years of operations in Oman. Over this period we have gained good market share and Customer confidence from, amongst 20 insurance companies operating in the Sultanate including conventional and Takaful Islamic insurance companies. In terms, of gross premium, we are among the top six companies. This is far more commendable as building something new creating a market while ensuring that the topline keeps growing.

We are pleased with our performance to date and are endeavouring to diversify our portfolio with a view to enhance our profitability and give good returns to our shareholders. Takaful Oman Insurance Company’s main objective was to cater to the Islamic financing needs of the institution which have to choose Takaful. Hence we have been a Takaful insurance company from day one, and not one which has converted from conventional to Takaful.

Our operational experience over the last seven years has given us insights regarding the needs of various institutions that we cater to – Islamic and conventional businesses with whom we deal in a Takaful way. As a service provider, we have to make sure that we are amongst the best in providing customer service. I am proud to say that we work with the biggest financial institutions across different businesses like medical insurance, Bank assurance etc. These reputed institutions work with us because we constantly innovate to serve the needs of these companies. From a performance perspective and given the prevailing market conditions we to be prudent and are making sure that we are well provisioned. We are working closely with our regulators, Sharia Board and shareholders to expand the areas where we can invest our policyholder funds. Islamic insurance in Oman has a market share of 14 per cent and given the fact that there are only two Islamic Insurance companies out of the total 20, is a commendable achievement.

The financial year 2020 and the first half of 2021 have been challenging from an economic and business point of view, how has Takaful OmanInsurance negotiated these challenges and yet grown its business?

During 2020 the insurance market in Oman degrew by around four percent, compared to this Takaful Oman Insurance Company recorded a flat performance over 2019. The financial year 2020 was also a year of transition for Takaful Oman as our strategy was to focus on growing the business in the life segment. Our life insurance business in 2020 grew by 37 per cent, while the motor business declined due to a conscious Strategy to focus on the segments within the motor business. The board and management were prudent and have taken higher reserves leading the company to post a net loss.

Our gross premiums have gone over RO25mn and our business mix has changed and we cater to a variety of needs in the insurance market. We have grown well in life and medical and it is heartening to see the top corporates place their trust in Takaful Oman. We also have a portfolio that boasts of some of the biggest corporate and government institutions in the market. I am pleased to share that most of our customers have been with us since inception and it underscores the quality and customer service that we bring to the table. Given the challenging macroeconomic environment, liquidity and receivables are an issue. Customers are asking for a reduction in contributions and extended payment terms which put a strain on liquidity. We have seen some cases where customers, agents and brokers are under liquidation and as a result we are being very prudent before extending credit terms.

You spoke about increasing the profitability of the company. How do you plan to achieve this goal?

We are looking at various strategies to increase profitability. We have created a good database which would help us differentiate between potentially more profitable business for others. For instance, when we look at our motor insurance portfolio, there are segments that are more remunerative compared to others and we try to manage the ones with a problem differently. Given the fact that we have been in the market for seven years also gives us better insights into market trends allowing us to take more risks compared to what we used to do before and this will strengthen our bottom line.

We now have the significant volume to be able to make a meaningful analysis of our portfolio. We segment our portfolio based on performance and price it accordingly. We have also strengthened our claims team and at the same time taken steps to optimize our expenses. We are working on introducing new products and services which will help
to differentiate ourselves from our competitors. We know our strengths and are pragmatic in pursuing business segments where our competitor is not focusing for the time being.

The Capital Market Authority is rolling out compulsory health insurance for private-sector employees under the Dhamaniprogramme. Is this an opportunity area for Takaful Oman Insurance?

It is a big opportunity as it will help to expand the health insurance market
and we are looking forward to it. At Takaful Oman, we have already
insured more than 50,000 lives from SME to the most reputed names in the industry. We are currently working on a few initiatives in this area so that we can offer our customers tailor-made solutions for their employees. We are hoping to be
among the companies to be granted a license to underwrite health insurance and are awaiting the CMA’s final decision.

Takaful Oman recently announced the first perpetual Sukuk by an Islamic Insurance company? How has the response been to the offering? 

We are very proud of the Sukukoffering as it the first of its kind perpetual Sukuk not just in Oman or the region but globally. Despite tough market conditions, the response to the Sukuk has been overwhelming and we successfully raised RO6.2mn. I would like to thank our regulators and all our stakeholders for the confidence that they have placed in Takaful

Oman. We will deploy the funds raised in two ways. One will be to grow our business and this is one of the main drivers of this Sukuk. Secondly, a part of the proceeds will be utilised to shore up our capital adequacy in line with the regulatory norms.

How did Takaful Oman Insurance manage its business with minimal disruption in the face of the Covid-19 pandemic?

We ensured business continuity by making sure that our digital footprint is robust enough to continue serving all our customers. Takaful Oman created facilities for its staff to work from home without any interruption of business. Customers could access us from anywhere and buy or renew their insurance at the click of a button. We were available for customers who wanted to speak to us and expanded the working hours of our call from8.00am to 8.00 pm with people working in shifts over six days a week. Thus we made sure that neither the
business nor our customers suffer. The Covid-19 pandemic has been a challenge but it is also an opportunity as it has shown the need for being more digitalised and how business can be done working remotely.

How did Takaful Oman Insurance help the country and community during the pandemic?

Takaful by its name means solidarity and working together. CSR is a part of
our culture. Though Covid-19 related medical expenses were not covered in our medical insurance policy we made room for it to be covered. This exception was introduced for ongoing medical policies. Our new medical policy covers Covid-19 without much of an extra premium. For our employees, we have provided a safe and healthy working environment. We supported the country by not just donating money but also contributed by giving time and participating in various CSR activities across the sultanate. Even In these difficult times we are employing and training Omanis as we believe that they are Oman’s biggest strength and as the economy grows, everyone will benefit.

How is the company supporting SMEs against the backdrop of a tough macroeconomic situation?

We realise that SMEs are struggling and need help. Keeping this in focus
we are working with them closely. We are helping new SMEs by supporting and encouraging a number of agencies run by SMEs to expand and grow their business with Takaful Oman. Takaful Oman provides them with opportunities, systems, training etc. to ensure that they serve themselves by working with insurance companies like us. We have special products catering for SMEs and our staff works closely with them to understand their requirement and offer them the best solutions with attractive payment options. We still feel that the SME segment is largely underserved by insurance and we see that as an area of priority for Takaful Oman.

Given the difficult market have your margins been under pressure due to price undercutting?

Pricing is sensitive in the insurance industry and one has to strike a balance between risk and return. At the end of the day, we have to grow profitably. We measure our risks carefully and are not driven by growing our top line. We are not the cheapest but we focus on additional benefits and superior customers service to differentiate ourselves from
our competitors.

What have been your biggest learnings from the last year and a half?

The biggest learning has been that an ability to adapt swiftly to changing circumstances is of paramount importance. In such an environment you have to adapt and turn ongoing challenges into opportunities. As a service provider, one has to find ways and means for serving customers in the best possible way and that is what made us go in for digitalisation. Similarly, we looked after our employees as a family. From a personal perspective, I got to know my family better as we spent more time together.

Looking ahead, what are going to be Takaful Oman Insurance’s key growth drivers?

As mentioned, we are looking into profitability as we have grown well and have built a strong reputation in the market. We continue to focus on our people and to be an employer of choice for all those working with us. Our key drivers are now innovation, improved customer service, strong claims control, and growth both in the physical and digital channels. Weare trying to grow more in non-motor businesses such as life, medical etc. and these are going to be our future growth drivers while we will still have a strong foothold in the motor. Overall, we are looking at the best segments that we should be in.