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'Consistent growth' in Jordan

March - April 2006
Hindawi praises the positive results of the insurance sector and its development in 2005

Dr Basel Hindawi, General Manager of the Insurance Commission, has praised the performance of the insurance sector and the positive results it has achieved in 2005. Total insurance premium rose to JD219.3 million by the end of 2005 compared to JD191.4 million in 2004, a increase of 14.6 per cent. The rise was mainly in general insurance premiums, which amounted to JD195.2 million compared to JD169.9 last year with a growth rate of 14.9 per cent. Meanwhile, life insurance premiums reached JD24.1 million in 2005 in comparison to JD21.5 million last year representing a growth rate of 12.1 per cent.

Dr Hindawi explained that the total premiums rose to JD127.7 million in 2005 in comparison to JD123.9 million in 2004 with a growth rate of 3.1 per cent.

By comparing the subscription results and their growth rate with the compensation portfolio, it is clear that the Jordanian insurance market has witnessed consistent growth in the volume of its insurance portfolio, where in the last 3 years the total subscribed premiums of general and life insurances rose from JD171.5 million in 2003 to JD191.4 million in 2004 and JD219.3 million in 2005.

Dr Hindawi added that the growth in the Jordanian insurance market was not limited to growing subscription and compensation operations of insurance companies, but rather combined with quantitative and qualitative growth in the supportive insurance services where the total licenses granted to insurance service providers reached up to 469 in 2005; an increase of 33.2 per cent compared to the same period in 2004. This increase was mainly in the number of licenses granted to agents, which total 392 licenses. This came in the light of the instructions issued by the commission in early 2005 in order to organize the agents' operations in accordance with the commission requirements to obtain or renew a license, and other instructions for insurance brokers, followed by instructions for insurance consultants, re-insurance brokers, and medical cost management and insurance services companies.

These organizational rules are reflected in the operations of 36 insurance brokers, 33 loss adjusters, and 6 licensed actuaries. The commission has also licensed one re-insurance broker and one consultant in addition to 9 medical cost management and insurance services companies.

Dr Hindawi also shed light on the commission's continuous efforts to protect the rights of the insured and insurance beneficiaries by ensuring payments are made on time and in a professional and efficient manner. This is done mainly by two of the commission's public channels: the Settlement and Information Directorate and the Insurance Dispute Settlement Committee.

The number of claims in various insurance issues submitted to the specialized directorate in the commission totaled 609 claims last year, of which 602 were vehicle claims. The commission successfully settled 590 of these claims.

The Insurance Dispute Settlement Committee received 21 cases last year in which complainants had tried all possible friendly methods to settle their claims. The committee issued 8 bills and was able to settle 13 claims, and 5 other claims were settled amicably, while the rest are still under study and awaiting settlement.

As per the Vehicle Accident Injured Compensation Fund's instructions, Dr Hindawi made it clear the Fund Management Committee continued to receive incoming claims through 2005. The Committee received 12 claims and decided on 3 of them, while the rest of claims are pending on completion of documents.

The General Manager of the Insurance Committee emphasized that the Committee's strong intention to increase the insurance awareness among citizens, drives a special attention to the Individual's share of insurance premiums its annual growth. In this regards, the current statistics show that the Individual's share of insurance premiums reached JD40 in 2005 compared to JD36 in 2004, with a growth rate of %11,1.

In his final statement to the press, Dr Hindawi emphasized the commission's interest to increase the contribution of the insurance sector in Gross Domestic Product (GDP) as the insurance premiums, particularly long-termed, represent solid support to the national developmental projects. Statistics at hand show an increased contribution during the past years from 1.9 per cent in 2001 to 2.52 per cent in mid 2005. While, the insurance sector stocks index moved up in January 2005 to hit 7382.4 points while it was 3726.9 points for the same period in 2004, with a growth rate of 98.1 per cent.

© POLICY 2006