Muscat: Takaful Oman Insurance, the Sultanate's second Islamic insurance firm, plans to commence operation today.
The company, which offered 40 per cent of its shares to investing public towards the end of last year, has faced a delay in completing certain procedures and getting the final licence from the insurance regulator for carrying out Islamic insurance business.
"We have received the licence on April 15 for underwriting business. We have already started underwriting a few small businesses," said an official source, who did not want to be named.
The company has already established its branch office at Shatti Al Qurum, which is also the head office.
"We will have a soft opening tomorrow and the formal launch will be sometime by mid-May," the official said, adding; "Re-insurance arrangements have already been made. We will offer both general insurance and family takaful."
Takaful Oman is planning to have a 30 member team in the first year, which will be strengthened to 70 by the end of the fifth year.
The company officials earlier said that it aims to follow a two-pronged approach to reach customers.
First, through an agency network and secondly, through bancatakaful — marketing insurance products in arrangement with banks. This will help reduce the fixed cost for the company.
Takaful Oman aims at being competitively placed in the marketplace, by creating a market for takaful products by bringing in a new audience into the insurance segment. This apart, it will also draw a market share from the conventional insurance space as this is one of the first companies to offer Takaful, an insurance based on the principles of Sharia.
Takaful Oman will be focused on developing and creating the insurance market while being a profitable company and not function as an investment company. Further, the company will focus on writing quality business and will not focus on only growing its top line.
Oman's insurance companies have posted a 10.4 per cent growth in total direct premiums at OMR364 million in 2013, from OMR329.6 million for the previous year.
This rapid growth is expected to continue in Oman because of the government initiative in the insurance sector, including the introduction of compulsory insurance. With the young demographic of Oman, surge in consumer spending and consumer financing, and the availability now of takaful products in a large untapped market, the insurance sector is poised for considerable growth.
Takaful Oman Insurance, which floated an initial public offering of OMR4 million in October-November, expects to break-even by the end of the first year of operation and plans to distribute dividend from fourth year onwards.
The company offered 40 million shares at 102 baisas per share, which include a nominal value of 100 baisas and two baisas as issue expenses.
Takaful Oman is promoted by leading groups namely, Oman National Investment Corporation Holding, National Investment Funds Company, Oman Investment Corporation, National Bank of Oman, Bank Muscat, t'azur Takaful Insurance Company and Blue Door Investment Services LLC. The promoters have 60 per cent stake in the company.
To get in touch with the reporter: firstname.lastname@example.org